Margarita Delgado: Global cities - sustainable finance meeting

Opening address by Ms Margarita Delgado, Deputy Governor of the Bank of Spain, at the "Global cities - sustainable finance meeting", organised by Acciona and El País, 22 April 2022.

The views expressed in this speech are those of the speaker and not the view of the BIS.

Good morning everyone and thank you for inviting me to this sustainable finance meeting organised by Acciona and El País. This is not the first time that this key subject has been the main topic of debate at a round table. Just over a year ago we discussed the way forward to the decarbonisation of the economy at a similar forum also organised by El País. Since then, we have gained further knowledge of environmental risks, particularly climate-related ones, and work has continued, albeit at a slower pace, on social and governance matters.

It's clear that this entire process of decarbonisation, of fighting against climate change and of transitioning to a more sustainable economic model will require a huge amount of resources to be invested. These resources must be channelled through the financial system and in order for them to be channelled effectively, financial intermediaries must identify, measure, manage and report on the risks associated with climate-related risks and incorporate them properly into their investment decisions.

The existence of robust datasets is crucial to making financing decisions that are aligned with the goals of transitioning to more sustainable models. The mainstay, and also the biggest challenge facing us – the supervisors, financial institutions and firms in general – all, is data compilation. The data should be reliable, comparable and have sufficient historical depth. To such end, they must be constructed on the basis of clear and common standards and definitions. Only when we reach this consensus on common definitions and we have granular data will it be possible ascertain the full extent of this risk and manage it completely. We, the regulators and supervisors, continue to work on improving this facet and on assessing the tools to comprehensively analyse the financial risks posed by climate change. Scenario analyses and stress tests are fundamental in this context.