Monday, Dec 02, 2019
Opening Remarks at Coping with Climate Change and Other Environmental Risks
CEO Babak Abbaszadeh's welcoming remarks at the opening ceremonies of Coping with Climate Change and Other Environmental Risks in Basseterre, St. Kitts and Nevis on December 2, 2019.
WELCOME REMARKS
Welcome to Coping with Climate Change and Other Environmental Risks
Remarks by Babak Abbaszadeh, President and CEO, Toronto Centre
Event: Opening Ceremony of Toronto Centre and the Eastern Caribbean Central
Bank’s (ECCB) workshop “Coping with Climate Change and Other
Environmental Risks”
Basseterre, St. Kitts and Nevis
December 2, 2019
Good morning Governor Antoine, executives, participants, and observers.
Welcome to “Coping with Climate Change and Other Environmental Risks.” We are
thrilled to be here in beautiful Basseterre and thank you to the Eastern Caribbean
Central Bank for hosting Toronto Centre’s program, the first of its kind.
Canada and its Caribbean partners share a deep history of cooperation, political
traditions, long-standing special trade and commercial linkages, and cultural values.
Canada acts as a champion for sustainable socio-economic development, enabling
prosperity and poverty reduction, resilience-building, and strengthening democratic
institutions throughout the region and for small states in general. 1
Toronto Centre’s contribution to this valued relationship is the enhancement of the
capacity of the Caribbean financial sector supervisors and regulators, who play a key
role in sustainable economic growth and poverty reduction. Since our inception in
1998, Toronto Centre has trained globally more than 12,000 supervisors and
regulators from 190 jurisdictions. Caribbean participants have always been amongst
the most engaged in our programs.
The challenge
The Eastern Caribbean region is in the trenches, so to speak, of climate change, as it
is situated in a hurricane belt and is a seismically active area—12 times as exposed to
natural disasters as the world average. These circumstances result in massive
damages, loss of life, are a significant draw on public finances, and undermine
private sector capacity to sustain investment and growth.
The ECCB’s response
Therefore, Toronto Centre is inspired by the ECCB’s dedication to take action and
reach their targets set in the Paris Climate Accord. I am encouraged by the pledge
made by Governor Antoine that the ECCB has set a target to become climate neutral
by 2022.
Governor Antoine articulated the ECCB’s dedication to this commitment when he
said, “we want to have the moral authority and to make the argument globally that
we are small, we are the least contributors to climate change, but here is what we are
doing.” Let’s take a moment to acknowledge and applaud Governor Antoine for his
championing this initiative and hosting this pivotal program.
Toronto Centre and climate risk
Integrating climate risk and the need to transform their response has become a
priority for financial policy makers, regulators and supervisors, and market
practitioners everywhere.
For many years, the insurance sector and supervisors have acknowledged that
climate risk results in acute events of greater frequency and severity such as floods
and droughts, rising sea levels, and risks related to the transition to a lower-carbon
economy such as stranded assets.
While insurance helps, as the severity and frequency of natural disasters grow, even
re-insurance cannot be counted on as a fool-proof counter-risk measure when it
comes to climate risk. Because it is clear that climate risk impacts the safety,
soundness, and stability of financial institutions and markets, particularly less wellregulated
financial systems, it is essential that both supervisors and regulators for all
financial sectors are aware of the risks posed by climate change and are equipped to
take appropriate actions.
In addition to incorporating the topic into our publications, podcasts, and webinars,
Toronto Centre has covered climate risk in the context for change portion of its
insurance supervisory courses for many years. However, since 2016 when we held an
international panel on climate change and financial stability at the World Bank and
IMF meetings, we have broadened our climate risk focus across all sectors of
financial services.
Our work is aligned with broader global initiatives. For example, addressing climate
change is an important pillar of Canada’s international development assistance. And
in 2017, the Central Banks and Supervisors’ Network for Greening the Financial
System was established with 36 members from all continents. Their mission is to
strengthen the global response to meet the goals of the Paris Agreement, and to
enhance the role of the financial system to manage risks and mobilize capital for
low-carbon investments to support sustainable development.
In 2018, the International Capital Market Association published the Green Bond
Principles (GBP) which promote integrity in the development of the green bond
market. The GBP recommend a clear disclosure process for issuers, which investors,
banks, underwriters, placement agents and others may use to understand the
characteristics of green bonds.
It is also worth mentioning that the IMF’s Global Financial Stability Report, 2019
prominently highlights climate risk as a risk to financial stability.
A cross-sectoral challenge
As indicated earlier, Toronto Centre understands that the risks posed by climate
change are relevant to all parts of the financial sector. We have accordingly
expanded our programs and developed other resources to provide information on
how all entities operating in the financial sector might respond to these risks through
their governance, strategies, risk management, metrics, targets, and disclosures and,
in turn, how supervisors might promote these approaches.
By building the capacity of supervisors to incorporate climate risk into their own
supervisory systems, Toronto Centre helps them identify the impact of climate risk to
financial institutions, economies, and consumers, and develop implementable action
plans to address these risks.
Today’s program
Our objective here today is to deepen the ECCB officials’ understanding of climate
risk, the effect it has on the financial system, and steps that can be taken by
supervisors to manage these risks. You will walk away with a knowledge of how to
systematically address individual challenges with action planning and ensure critical
success with key stakeholders.
Toronto Centre’s mission, which touches directly and indirectly on 11 out of the 17
UN 2030 Sustainable Development Goals including SDG 13, Climate Action,
is sponsored by our key funders, Global Affairs Canada, Swedish Sida, and the IMF.
These organizations share our concern for promoting financial stability, fostering
financial inclusion, achieving sustainable development goals, and poverty reduction.
I hope you all enjoy the program.