1 Welcome

Ladies and Gentlemen, 

Good afternoon, and thank you for the kind introduction. It is a great honour to be here with you today to discuss the way forward on the road to Belém. 

First of all, let me thank the German Embassy for organising this event and for bringing together such a distinguished and diverse group of leaders and experts. Events like this are so important, especially in the current context of numerous economic and geopolitical challenges that (threaten to) overshadow climate change. 

It is essential to have spaces and forums where stakeholders from the public and private sectors, academia and civil society come together to exchange ideas on how to move ahead. The strong attendance here today is testament to our dedication and reflects our shared recognition that the serious risks arising from climate change have to be taken seriously. 

2 The Role of the NGFS

I am proud to represent not only the Deutsche Bundesbank but also the Network for Greening the Financial System (NGFS), which I have the honour to chair.

The NGFS is a global coalition of central banks and supervisors committed to addressing climate and nature-related risks in the financial system. Since its foundation in 2017 the NGFS has grown significantly, today boasting 145 members and observers. Our global and growing membership underscores the increasing international recognition of climate and nature risks.

Climate change is unfolding rapidly, right in front of our eyes, and poses profound risks to our economies and financial systems. It is more important than ever to continue our independent, data-driven and science-based work. 

I am very glad to see colleagues from the Bank of England and my fellow Deputy Governor Paulo Picchetti from the Banco Central do Brasil in the audience today. Your institutions have contributed a lot to the work of the NGFS. 

3 Climate inaction has high economic costs

The urgency of ambitious climate action cannot be overstated. 

Work by the NGFS shows economic and financial risks arising due to climate change and nature loss. 

Last November we released the latest update of our long-term climate scenarios. The scenarios show very clearly that climate inaction has high economic costs. 

If we stick to current policies, global GDP could be 15 % lower by 2050, compared to a world without climate change.[1] This does not include sea level rises, migration or nature loss.

I know that 2050 is, in practice, beyond the planning horizon of many corporates and political decision makers. That is why the NGFS has developed short-term climate scenarios with a time horizon of three to five years to help bridge this gap. 

These scenarios also show that a delayed transition is expensive. Our stress scenarios assume extreme weather events. Our scenarios show that delaying the transition by just three years could reduce global GDP by almost 1 % by 2030.[2]

The NGFS scenarios are a public good, designed to help financial institutions and the real economy assess the potential impacts of climate change. I encourage you to make use of them to manage climate-related risks. 

4 Scaling up global climate finance

Ladies and Gentlemen, addressing climate risks requires a collective effort to align global financial flows with climate goals. 

To meet the goals of the Paris Agreement, global climate finance needs to be significantly scaled up from current levels. 

The Baku to Belém Roadmap to 1.3 Trillion is a key initiative in achieving that goal.[3] The roadmap provides a pathway for mobilising the capital needed for the transition to a low-carbon economy. I am particularly excited to hear more about this roadmap from André Corrêa do Lago in a moment.

The public and the private sector must work hand in hand to scale up climate finance. But the biggest share has to come from the private sector, as public money has its limits and more and more challenges for public money are arising. 

And I look forward to hearing from other participants here about how the financial sector can help to mobilise climate finance.

5 The role of the corporate sector

At the same time, climate finance is only one side of the coin. The other side is the low-carbon transition of industries and businesses. It is important to bring the corporate sector on board.

They are the ones who will innovate, invest, and implement the changes needed to achieve climate goals. The renewable energy transition is key to addressing climate change. So, the energy sector plays a pivotal role in moving away from fossil fuels.

I am very happy that Greg Jackson from Octopus Energy will join our discussions and share his insights with us. 

6 Conclusion

Ladies and gentlemen, let me conclude. As we move towards COP30, the stakes could not be higher. Last month was the second-warmest May on record globally, just slightly cooler than May 2024.[4]

Climate change is not a distant threat; it is a present reality. The decisions today will shape the world for generations to come. And let us remember that while the challenges are great, so too are the opportunities.

Footnotes:

1. See: NGFS Climate Scenarios for central banks and supervisors – Phase V | Network for Greening the Financial System
2. NGFS short-term climate scenarios, see: NGFS Short-term Climate Scenarios for central banks and supervisors | Network for Greening the Financial System
3. For an overview, see: Baku to Belém Roadmap to 1.3T | UNFCCC
4.  Second-warmest May globally, dry/wet contrast across Europe in spring | Copernicus