October 16, 2020

As delivered

Thank you very much, and let me congratulate theInternational Platform on Sustainable Finance (IPSF) for the celebration of its first birthday. We hosted this together with Valdis [Dombrovskis, Executive Vice President of the European Commission] together last year at the Annual Meetings in our building at the IMF. And today, we are hosting it in the biggest room in the world—in the virtual room. 

This Platform is about finance, but ultimately it is about improving the lives of the people.

They may not know this Platform exists. But they know the problems climate change and environmental degradation cause. A farmer knows when the rains don’t come, the crop will fail.A mother knows when there are more oppressively hot days, when the haze of pollution hangs thick in her city’s air—her daughter will have more asthma attacks on those days.

But we can bend the course of development toward sustainability. We can buildphysical infrastructurethat islow carbon andclimate-resilient. To do so, we need organizations like the Platform to provide thefinancial infrastructure so we can build it.

When we add COVID-19, the task becomes even more pressing, for two reasons: the pandemic reminds us of our human vulnerability to nature. But also, we are going to pour in a massive fiscal response that can accelerate the transition to a more sustainable global economy.

In the first year,the Platform has grown into a global organization spanning six continents.

It has identified areas of focus where it is uniquely suited to add value: taxonomies, disclosures, standards, labels. There, global coordination is much more effective than fragmented actions.

And I want to welcome the launch of the working group on taxonomy—a foundational element for expanding private sector investment.

At the IMF, we closely study what drives cross-border investment.

For decades,reliable, comparable, consistent financial informationhas given investors the confidence to buy stocks and bonds, creating incredible wealth. Investors need similar information about thesustainability of companies and investments so they can direct the trillions of dollars coming to fight the pandemic the right way.

And how is the IMF helping? Let me first say we are proud to join the IPSF as an official observer--not just as a host, but to link to you durably. What we offer is our knowledgeof the global economy, and the work we do in support of green and sustainable growth.Just last week, we launched a major climate report in our World Economic Outlook—how to support a job-rich response to the pandemic that is also addressing our climate risks. And also we have presented how we can incentivize private investment in green infrastructure.

In our Global Financial Stability Report [last October], we explored the link between sustainable finance and financial stability. We want to show how climate-related financial stability risks can be identified and how they can be handled.

So let me close with two actions regulators worldwide can take:

First,standardization and transparencyfor sustainable investment.The EU’s new taxonomy is an important step forward, and now the Platform is poised to move it even further, working with China.

Second:stronger disclosure standards. Disclosure requirements go hand-in-hand with taxonomies to provide the reliable, comparable, consistent information investors need and investors love. 

We are in a time today of exceptionally high uncertainty, but one thing is certain: prevention is better than cure.We must build resilient societies for a more shock-prone world, and finance has a major, major role to play.

Thank you.