Statement of Glenn Stuart Hodes Climate Policy Expert Monetary policy tools can also be reformed to incorporate climate risks aimed at limiting systemic financial risk, or specific financial risks, as well as to promote low-carbon transitions. For example, Bangladesh Bank uses the instruments of ‘mandatory credit quotas’ and ‘targeted refinancing lines’ to incentivize green lending. As of 2016 every financial institution is obliged to allocate at least 5% of its loan portfolio to green finance. And BDT2 billion (US$25 million) was made available in concessionary lending on a refinancing basis to local banks under the category of green finance in 47 asset classes.17 Other regulatory instruments and regulatory reviews are mainly being pursed in Europe.18 5) Elaborating financial regulations that promote clearer climate-friendly standards for corporate citizenship and governance. Financial regulatory authorities across the globe are increasingly elaborating legislation or other requirements for companies to conduct carbon foot-printing and climate risk and investment analysis as a pre-requisite for listings on stock exchanges or to engage in business operations. Mandatory filings could include provisions or guidelines for certain businesses to assess the risk of stranded assets when planning new brownfield investment or promoting integrated risk reporting. In this way, climate change may become mainstreamed in disclosures and shareholder communication as germane to many aspects of business risk beyond environmental, including political, market, supply chain, continuity, reputational, and liability risk.19 Bangladesh Bank has issues guidelines for environmental and social risk management, with checklists and three risk rankings; as of 2018 compliance in their application will be enforceable under the Bank Company Act, 1991 and Financial Institutions Act, 1993.20 Guidelines and regulations are also being developed for Government Owned and Controlled Corporations in the region. For example, corporate governance guidelines elaborated by the Royal Thai Ministry of Finance, State Enterprise Policy Office (SEPO) recommends that Boards have clear policies on environmental and social issues in place. In France and Sweden, institutional investors must disclose the carbon footprint of their lending and investment portfolios. The London Stock Exchange is moving toward requiring all listed companies by 2019 to have undertaken a carbon footprint analysis. The Johannesburg Stock Exchange has for many years required listed companies to include sustainability reports or integrated annual reports that incorporate environmental and social governance. South Africa’s King Code of Corporate Governance, oft cited as good practice in emerging markets, stipulates that Boards have a duty of care to identify and adequately assess all direct and indirect environment, social, and governance risks. 17Monetary Policy and Sustainability: Case of Bangladesh. Inquiry into the Design of a Sustainable Financial System Working Paper 15/02. UNEP: August 2015. 18 Emanuele Campiglio et al. UW. Finance and climate change: what role for central banks and financial regulators? Manuscript. 19 For example, see reporting framework guidelines as promoted by the International Integrated Reporting Council at: http://integratedreporting.org/wp-content/uploads/2015/03/13-12-08-THE-INTERNATIONAL-IR-FRAMEWORK-2-1.pdf 20 Bangladesh Bank Sustainable Finance Department. Guidelines on Environmental & Social Risk Management (ESRM) for Banks and Financial Institutions in Bangladesh. February 2017. 5