Make big changes over the coming years and we need to make sure that everyone is on board the

European Union is firmly committed to working quickly and effectively towards climate neutrality as
is set out in the European Green Deal and we're firmly committed to global efforts towards this goal
to the Paris agreement and the broader cop process the financial system has a big part to play in this
transition to a sustainable climate neutral economy and society we want the financial system itself to
be sustainable just as we want every part of the economy to do its part in the transition and we also
want the financial system to direct money towards the transition to a net zero world and that is what
today's finance day at copper in Egypt is all about the European Union is committed to helping the
financial system contribute against climate change so I'm delighted to kick off this discussion on EU
environmental social and governance disclosures and European sustainability reporting standards
today I want to talk about the European union's corporate sustainability reporting active the role of
European sustainability reporting standards and how our work at the European level fits into the
global picture on sustainability standards we all know that much of the financial system relies on
information how much money companies are making whether they're meeting their targets for sales
and growth and what their share price is right now but we should also be asking for information
about sustainability but a company's carbon emissions are whether their board is gender balanced
our employees and their supply chain are treated in fact many investors civil society and citizens are
already asking those sorts of questions it's not just about the information itself we want companies
to reflect social and environmental considerations in their decision making by reporting the impact
they have companies can adopt A sustainability mindset at all levels and think more about the long
term as part of disclosure requirements companies will disclose their transition plans helping to
refocus and track their efforts towards sustainability and ultimately want to put sustainability
information on the very same footing as financial information and then we can measure the success
of companies not just in terms of their balance sheet but also their contribution to a sustainable
economy with this in mind the European Union is strengthening our corporate sustainability
reporting rules as part of a much broader sustainable finance agenda we recently reached
agreement on the corporate sustainability and reporting directive and this will strengthen the rules
about social and environmental information that companies have to report so how does this
directive approach the issue well first it covers large companies and listed companies second the
information reported will be made available in a digital format and that makes it easier and
accessible to everyone interested in seeing it third companies will have to get an assurance opinion
on their sustainability reporting and that will make the information more reliable and reduce the risk
of brainwashing we're aware of the cost that this measure implies for those preparing the reporting
and with that in mind we've taken a gradual approach in this area starting with the requirement for
limited assurance followed by reasonable assurance depending on certain conditions and force
companies will have to report according to European sustainability reporting standards these
standards were set out what information companies have to disclose and how they have to disclose
it it makes this information will be credible consistent and comparable and of course the standards
must be proportionate they shouldn't go beyond what's necessary to meet object.

The European financial reporting advisory group or affright is developing these standards it recently
consulted on the first set of draft European reporting standards covering environmental social and
governance issues and we are moving fast the European Commission will adopt the first set of
standards by the middle of next year and then the application of standards would be phased in it was
charged for the first companies in financial year 2024 for reports published the following year it is
important to note that U standards will of course take account of global standards and that includes
the standards currently being developed by the international sustainability Standards Board the ISB
fun don't dance dance Don't know Cortana mini turn on meeting carnival welcome yeah so basoga
stop Cortana list can you talk about compatibility we expect European stand it's to integrate the
content of these global standards to the extent that they are consistent with the EU law and the
goals of our European Green Deal we want European and global standards to be as aligned and
compatible as possible while also meeting our requirements in the European Union two way
cooperation between global and regional standard setters is essential and defrag the body
developing our standards is working closely with the ISB sustainability reporting can really help
companies manage their transition so we the movie but Cortana hello hey Cortana45 cortana
..

Mitigating climate transition risk in ship finance

As of 2017 banks have about $355 billion lent to shipping companies this matters because ships have
about 25 year lifespan so if you think about what do we have to achieve in 25 years we have to be
well on our way to decarbonization in 25 years this creates challenges for decarbonization as well as
risks for financiers climate transition risks are simple they are just the financial implications of
transitioning to a low carbon economy so for example in shipping what we've actually seen through
our cutting edge research with University College London is that if you're a ship owner and you're
unprepared for some mechanism like a carbon price first you'll see an impact on your cash flow so
you're less competitive versus your peers or your competitor companies so you make less money
then you'll see an impact on your asset value so your ships are worth less ultimately that impacts
your company your company will be less creditworthy and you'll be less able to pay back your loans
to the banks that lend you money in addition to this we also see that going into the next decade as
countries begin to successfully implement the Paris payment their demand for coal and oil will begin
to decrease the knock on effect of that is simply that the ships that move those goods like tankers
and bulkers will be in less demand meanwhile the UN's International Maritime organization as well
as the European Union are working incredibly hard to regulate greenhouse gas emissions from
international shipping what this all means is that if you're financier in the shipping industry today
and you finance a new build vessel while that vessel might be delivered in 2020 you'll have to pay
back your loan throughout the twenty 20s and into the early twenty 30s that creates some real
challenges for you as you consider making that investment it's not all about risk and bad news
decarbonization is a huge opportunity those who can best understand decarbonization will
ultimately position themselves to be the industry leaders over the coming decades as a ship financier
you need to make sure that the loans that you've already made that sit in your portfolio as well as
future loans that you might make are going to be competitive under a range of market as well as
decarbonization scenarios the way that you can do this is to work with your clients in a way that
works for you to make sure that you carbon stress test the vessels and the companies that you blend
to ultimately that will deliver win win so that your clients will be able to support decarbonization
while also repaying their loans successfully throughout the tenor of those loans.