Frank Elderson: Responding to sustainability regulation

Keynote speech by Mr Frank Elderson, Executive Director of the Netherlands Bank, at the UBS - ECOFACT Conference "Exploring the Next Frontier in Banking and Insurance: Responding to Sustainability Regulation", London, 6 June 2017.

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

When Bank of England governor Mark Carney gave his famous speech on climate change almost two years ago, he mentioned 'the tragedy of the horizon'. He was referring to how the catastrophic impact of climate change will be felt beyond our traditional horizon - imposing a cost on future generations that the current generation has no incentive to fix.

The country where I'm from is a striking example of this phenomenon. One quarter of the Netherlands lies below sea level. This area is home to nearly one third of the population, and the heart of our economy. Although we are highly vulnerable to the effects of global warming, we still have one of the most carbon-intensive economies in Europe. As well as being heavy oil and gas consumers, we are also a major producer and exporter of it. So perhaps I'm not in the best position to preach to the world about the risks of climate change. But as a representative of an organization whose mission is to safeguard financial stability and contributing to sustainable prosperity in the Netherlands, climate change is a serious concern for me.