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2026 INTERNATIONAL CONFERENCE — Transcript

by 금융감독원(Financial Supervisory Service) · 16,413 words · 2,778 segments · language en · Watch on YouTube

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7:56and performed by students from Ewa
7:59Women's University's Department of
8:01Dance. For more information, please
8:04refer to the program guide provided to
8:06you. Now, please join me in giving the
8:10performance a round round of applause.
8:32Heat.
8:56[music]
9:01Heat. Heat. Heat.
9:04[music]
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9:20[music]
9:22Heat. Heat.
9:30[music]
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9:39[music]
9:46>> [music]
9:54[music]
9:59[music]
10:02>> Heat.
10:03Heat. [music]
10:10>> [music]
10:15[music]
10:27>> We built more.
10:32We moved faster.
10:36We consumed more.
10:41And every choice left a trace.
10:48In the air,
10:51in the ocean
10:54and in our earth,
10:58every change leaves a trace.
11:04Heat. Heat.
11:09[music]
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11:53>> Heat. Heat. [music]
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12:18Heat. Heat. N.
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12:40Heat [music]
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12:55up [music]
13:09here. Heat. Heat.
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13:49>> Heat. Heat.
13:54Heat.
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14:09Heat.
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14:26>> Heat.
14:30Heat.
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14:53Heat.
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15:02Heat [music]
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15:13[music]
15:17>> [music]
16:21>> Heat. Heat.
16:27>> [music]
16:32[music]
16:45>> Good morning, distinguished guests. It
16:47is my great honor and pleasure to extend
16:50a very warm welcome to all of you to the
16:522026 international conference future
16:55climate finance in the era of green
16:58transition. I am Mong Hun from the
17:01financial supervisory service and I will
17:03be the MC for today's conference.
17:11Before we begin, I would like to briefly
17:13go over today's program. In part one,
17:16leading experts from major economies
17:19will speak about their country's
17:21policies and market developments with
17:23regard to transition finance and
17:25sustainable finance. In in part two,
17:28global financial firms will present
17:30their strategies to address climate risk
17:33and the financial supervisory service of
17:35Korea will discuss the current status
17:38and future plans for climate stress
17:40testing. Each part will feature four
17:43presentations followed by a panel
17:45discussion with the speakers. Throughout
17:48the conference, you can access real-time
17:51translation on your mobile devices by
17:53scanning the QR code at the entrance.
17:56The transi translation will be displayed
17:58on the screen on the right hand side of
18:00the stage as well. For our VIP guest,
18:04the transition the translation is also
18:06available on the tablets provided.
18:09And now to officially mark the opening
18:11of this conference, we will invite Mr.
18:14Ianzin, Governor of the Financial
18:16Supervisory Service to the stage. Please
18:19welcome him with a big round of
18:20applause.
18:34[music]
18:41You're
18:54speech.
19:24Philip,
19:50okay.
20:32system.
20:36Global system
21:10for
21:36global
21:59Fore
22:08speech.
22:18Foreign
22:26speech. Foreign speech. Foreign speech.
23:36foreignch.
24:16Thank you, Governor.
24:20Next, President Yhangsuk of Uimma
24:23Women's University, the co-host of
24:26today's conference, will grace the stage
24:27for her welcome remarks. Let us welcome
24:30her with a warm round of applause.
24:33[music] Conference
24:54feature climate finance in the era of
24:57green transition.
25:08conference
25:13conference.
25:52Fore!
26:11Fore! Fore!
26:46Good on
27:00You guyschech.
27:36Fore
27:55speech.
28:00Fore
28:23speech.
28:29>> [music]
28:32>> Thank you, President.
28:36Ladies and gentlemen, we are honored to
28:38have distinguished guests who have taken
28:40time to join us in celebrating this
28:43conference. First, I would like to
28:45introduce an honorable guest who has
28:47kindly shared her congratulations with
28:50us in video messages. Let us welcome
28:53Prime Minister Hanongu.
28:55Fore!
29:16Foreign! Foreign!
30:10Fore
30:33speech.
30:43We thank the prime minister for her
30:45heartfelt message. Moving on, we are
30:48honored to have distinguished guests
30:49with us today who have taken time out of
30:52their busy schedules to deliver their
30:54congratulatory remarks. First, we have
30:56Mr. Yudong Su, chair of the National
30:59Policy Committee of the National
31:01Assembly. Let us welcome him to the
31:03stage with a big round of applause.
31:24There.
31:31[snorts]
31:43Compass.
31:54for
32:15Philips.
32:36for
33:03speech.
33:14forchech.
33:44Fore!
33:47Foreign! Foreign!
33:57forchech.
34:37Fore! Foreign! Foreign!
34:48Fore!
35:07Foreign! Foreign!
35:49Thank you very much.
35:53The next congratulatory remarks will be
35:55delivered by the honorable Mijiima
35:58Kuichi, ambassador of Japan to Korea.
36:01Please welcome him with a big round of
36:03applause.
36:15[music]
36:32Um, first I would like to thank Governor
36:35Lee Chanzing and President of the EA
36:38Women's University, Dr. Lee Hansuk for
36:43inviting me to 2026 international
36:46conference today which brings together
36:49so many key figures from the financial
36:53sector.
36:54Japan and Korea are important neighbors
36:58and partners who must work together to
37:02address various challenges in the
37:05international community. The theme of
37:08today's conference,
37:10the financing
37:12in green tradition is definitely one of
37:15them.
37:17Over these decades, cooperation and
37:20exchanges between Japan and Korea have
37:24steadily grown in all areas and recent
37:28developments are spec especially
37:31remarkable
37:33on the economic front. More than 3,000
37:37Japanese companies are currently
37:40operating in Korea.
37:42Some of these, including financial
37:44institutions, were established here soon
37:48after the normalization of diplomatic
37:50relations.
37:52People-to-people exchanges between Japan
37:54and Korea continue to thrive. Last year,
37:59the number of visitors between our two
38:02countries exceeded 13 million,
38:07surpassing the previous record of 12
38:10million the year before.
38:13In the economic sphere as well, business
38:16ties continues to expand. Japan remained
38:20the second invest largest investor in
38:23Korea last year making significant
38:27investment in the fields such as green
38:30field projects that Korea highly values
38:33as well as manufacturing industries that
38:37enhances Korea's competitiveness and
38:40strengthen the Japan Korea supply chain.
38:45As you are all aware, the current
38:47international environment surrounding
38:50Japan and Korea is extremely
38:52challenging.
38:54In these circumstances, the cooperation
38:56between Japan and Korea is more
38:59important than ever.
39:02Since the inauguration of President Lee
39:04Jimon last June, we have held six
39:08face-to-face summit meetings and talks.
39:12In May this year, Prime Minister Takichi
39:15received a warm welcome in Andong,
39:19the hometown President Lee, where the
39:22two leaders held frank and constructive
39:26discussions on the direction of
39:28cooperation in various fields between
39:31Japan and Korea.
39:34They shared a recognition of the
39:36strategic importance of Japan Korea
39:39relations and concurred to maintain and
39:44strengthen the positive atmosphere of
39:47the Japan Korea relations.
39:50This round of shuttle diplomacy served
39:53as an opportunity to further strengthen
39:56trust between the two leaders.
39:59As for cooperation between our financial
40:02authorities,
40:04the ninth regular Japan Korea financial
40:07shuttle meeting was jointly held by the
40:10Korean Financial Services Commission,
40:13the Korea Financial Supervisory Services
40:16and the Japan Financial Services Agency
40:20in Busousan. Last December, the heads of
40:23the three authorities confirm with each
40:27other the overall direction of key
40:29policy agenda items and high priority
40:33policy tasks that would deserve further
40:36cooperation among the three authorities.
40:40Thanks to such commitment, timely and
40:42close communications continues between
40:45our financial authorities. Thank you,
40:48the governor.
40:50In terms of sustainable finance as well,
40:55the three authorities signed a revision
40:58of the memorandum of cooperation
41:01concerning assistance and mutual
41:03cooperation in the area of financial
41:05supervision in 2023
41:08to expand the scope of supervisory
41:11cooperation to cover this area. As
41:15illustrated above, I believe it is vital
41:18for both countries to share experiences
41:22and learn from each other as we address
41:25common challenges.
41:28In closing, let me mention that to
41:30further solidify this positive momentum
41:34and advance Japan Korea relations in all
41:38areas including politics, economy,
41:42finance, people-to-people exchanges
41:46and the area of green uh financing. The
41:52support of every one of you gathered
41:54here today is indispensable.
41:58I sincerely hope for your continued
42:00support as well. I hope the discussions
42:03to be held today will contribute to
42:06further development of our cooperation
42:08and wish you all good health. Thank you
42:11very much.
42:19>> [music]
42:24>> Thank you, Mr. Ambassador.
42:27Now, last but not least, let us welcome
42:30the Honorable Colin Krooks, British
42:32Ambassador to Korea, to the stage with a
42:34warm round of applause.
42:41Forejerchee.
43:11foreign.
43:49for
44:08foreignch.
44:37forch.
45:07Forch!
45:37Fore
46:05speech. foreign.
46:38for
46:53Google.
47:15Google.ch.
47:38foreign.
48:18Thank you, [music] Mr. Ambassador.
48:20Once again, we sincerely thank the
48:22honorable guests for their kind words of
48:24congratulations.
48:26Ladies and gentlemen, this brings us to
48:28the end of the opening session for the
48:302026 International Conference. We would
48:33like to ask for your kind understanding
48:35as the VIP guests will now be making
48:38their way out. We will continue with the
48:40conference shortly. We kindly ask for
48:43your patience.
48:51[music]
49:12>> [music]
49:24[music]
49:28>> Heat. Heat.
49:50[music]
50:00>> [music]
50:06>> Heat. Heat.
50:22>> [music]
50:59>> Welcome back ladies and gentlemen. It is
51:01now time to begin the first part of
51:03today's conference. Part one will be
51:05moderated by Professor Hansoc from Jon
51:08University with insightful presentations
51:11by Deputy Chief Sustainable Finance
51:14Officer Tomunano from Japan's Financial
51:17Services Agency, head of sustainable
51:20banking development Ronald Yang from the
51:23Hong Kong Monetary Authority, Director
51:26Camille Blackburn from the UK Financial
51:28Conduct Authority, and Group General
51:31Manager Hal Gam from the Australia and
51:34Newal. banking group. The presentations
51:37will be followed by a panel discussion
51:40to facilitate understanding for all
51:42participants. Real-time translation will
51:44be provided. Now, without further ado,
51:47let us welcome our moderator, Professor
51:49Hansuk, and the speakers to the stage
51:52with a big round of applause.
53:05So for this part the first speaker will
53:08be Mr. Tomumi Yano, deputy chief
53:10sustainable finance officer at Japan's
53:13financial services agency. is going to
53:16deliver a presentation about Japan's
53:19transition finance policy and market
53:21development.
53:33[clears throat]
53:35>> Good morning everyone. Um my name is is
53:38that Tommo Humiano from the JFSA and
53:42served as a deputy chief sustainable
53:44finance officer and thank you for
53:47inviting us JFSA today. I'm honored to
53:51the present Japan's policy framework and
53:54recent developments in transionial
53:56finance a key component in our journey
53:59to other carbon neutrality. [snorts]
54:02Sorry one please. [clears throat]
54:10Japan has the consistently to pursue the
54:13concept of the green transformation
54:15since the 2022 aiming to the achieve the
54:19three goals simultaneously ensuring a
54:21stable energy supply promoting economic
54:24growth and achieving a decarbonation
54:27all while maintaining this persistence
54:30even amid the recent global development.
54:33To realize around the 150 trillion yen,
54:37$1.1 trillion dollars in GX investments
54:40over the next decades, Japan established
54:43a regulatory and support framework that
54:46calls the growth oriented carbon pricing
54:48throughout the GX promotion act and the
54:51GX strategy in 2023.
54:54We have also taken concrete step such as
54:57formulating the sector specific
55:00investment strategies. the issuing the
55:02climate transion bonds and the launching
55:05the GX acceleration agency.
55:12One key finance method that supporting
55:14the GX investments is the transition
55:17finance for industry that emits the
55:20large amount of the greenhouse gases due
55:23to their characteristics achieving the
55:25full decarbonation in one leap is
55:28unrealistics.
55:30Therefore, Japan has worked to the
55:32created environment that enabled the
55:35this industry to the secure funings for
55:38the measure such as energy efficiency
55:40and the fuel switching. [snorts]
55:46This slide show that Japan's overall
55:48framework for the promoting the
55:50transition finance. In 2021, we is we
55:55issue the basic guideline on climate
55:57transition finance for marrying
55:59fundraisers.
56:01Since then we have developed the sector
56:03specific technology road map follow-up
56:05guidance for the financial institution
56:08and investors and provided the support
56:11for the project project formulation
56:13throughout the model projects and
56:15subsidies all under the cross
56:18collaboration between the government and
56:20private sectors. The guidelines are
56:23regularly updated to the reflect the
56:26changes in the international standards
56:28and market development including the
56:30guidance issued by the organizations
56:33such as Ekuma. [snorts]
56:38Internationally our [clears throat]
56:39effort the focus on the Asian which
56:42account for the about half of the global
56:45the GG emissions and will play a crucial
56:48role in the global decarbonation
56:51to promote the transfer of finance in
56:53the regions. The ministry of the economy
56:55trend and indust economy trade and
56:58industry in Japan expert working group
57:01that published the interimm report in
57:04July 2025. The report recognizes Asian
57:08unique circumstances including the
57:11global energy demands, the manu
57:14manufacturing based economies and
57:16financing structures differ from those
57:19in developed markets. To mobilize the
57:22massive investments needed for the
57:24decarbonation, the reports propose the
57:27two layered approach. the labor trans
57:30finance based on the existing the
57:32international principle and the broaden
57:35category of the transion finance that
57:37support activities that contribute to
57:40the national climate goals. Looking
57:42ahead the fostering the shared
57:45understanding of transion finance beyond
57:47the labor product will be the key role
57:50key to the sca scaling scaling
57:52investment and accelerating the
57:54decarbonation across Asia.
57:58>> [snorts]
58:00>> and move on to the our sustainability
58:03disclosure framework. um regarding the
58:06timeline for applying applying it um and
58:10under the you know SSBJ framework based
58:13on the ISSB standards. The so far the
58:16JFSA is considering as a basic road map.
58:20The company with a market capitalization
58:23of the three trillion yen or more fiscal
58:26year ending March 2027.
58:29The company with the between the one to
58:33the three trillion yen fiscal year
58:35ending March 2028. The company with a
58:39five 500 billion to the 1 trillion yen
58:42fiscal year ending March 2029. I like to
58:46stress the key factor of the
58:48sustainability disclosure standard in
58:50the context of the promoting financial
58:52finance. Once this disclosure
58:54requirement take effect, the company
58:57subject to the standards will need to
58:59disclose their transition plan if they
59:02have one. This is expected to accelerate
59:05the development of the transion plan
59:08among the prime market research
59:10companies.
59:11For financial institutions, when
59:14formulating their own transition
59:15strategies, it is essential to assess
59:18the client transition and the fiscal
59:21risk and consider their transition plan.
59:24Therefore, a progress in the corporate
59:26transition planning will also drive the
59:28finance institutions efforts. [snorts]
59:33[clears throat]
59:36We have also been working to the
59:38strengthen the market infrastructure for
59:40transition finance. The effective the
59:42functioning of the mark market based
59:45mechanism and the price signal provided
59:47strong incentive for the both the
59:50financial institutions and the corporate
59:52to decarbonize and served as a important
59:55foundation for the sustainable
59:57transition. So as a as a result of these
1:00:00efforts we have seen the steady progress
1:00:03in the Japan capital market the use of
1:00:06the the transition labor loan and bond
1:00:09has expanded and cumulative transition
1:00:11finance issuance by Japanese private
1:00:13sector entities exceed the JPY 3
1:00:17trillion 3.7 trillion as of the end of
1:00:21the July 2026.
1:00:23So the Japan is widely recognized as a
1:00:26you know global leader in transition
1:00:28finance the ranking among the largest
1:00:30markets in terms of the both issuance
1:00:33volume and the number of the issues. At
1:00:36the same time the carbon credit markets
1:00:38that which underpin the broader
1:00:40transition finance ecosystem remain at a
1:00:42relatively early stage of developments.
1:00:45In 2023, the Tokyo exchange, Tokyo Stock
1:00:49Exchange launched carbon credit market
1:00:52for tra for the trading the government
1:00:54certified J credits. While the annual
1:00:57trading volume remain the modest
1:01:00compared with those in the Europe, the
1:01:02United States and China, the market
1:01:05represents the important step toward the
1:01:07established domestic carbon pricing
1:01:09ecosystem.
1:01:18Looking ahead, the significant growth is
1:01:20expected in this markets. In April 2026,
1:01:25Japan launched the GX emission trading
1:01:28system, the GXES, under which the
1:01:31company with annual shu the emission
1:01:34exceeding the 100,000
1:01:38tons are subjected to the allocation and
1:01:40the surrender of the emission as a
1:01:43system development as a system developed
1:01:46the demand for the trading and the
1:01:48credit to manage the servers and the
1:01:51deficit position.
1:01:52is the expected to increase the further
1:01:55supporting the growth and the liquidity
1:01:57of the Japan's carbon market [snorts]
1:02:01[clears throat]
1:02:02as the carbon credit trading is expected
1:02:04to expand with the launch launch of the
1:02:07GXES ensuring the market integrity and
1:02:11transparency will become increasing the
1:02:14importance against this backdrop the
1:02:16JFSA that convened a working group to
1:02:19examine the measure to the support the
1:02:22sound developments of the carbon credit
1:02:24market. This reports identified by key
1:02:28the issues including the disclosure, the
1:02:31governance, the market infrastructure
1:02:33and risk management with the aim of the
1:02:36enhancing market credibility and
1:02:38investor confidence. the subsequent
1:02:41slides that provided further the detail
1:02:44on these findings and the recommendation
1:02:46but I will skip them today um due to the
1:02:50time constraint.
1:02:54So as I mentioned earlier the Japanese
1:02:56government's fundamental commitment to
1:02:58the decarbonation and the trenchion
1:03:00finance remain unchanged.
1:03:03The we continue to the steady steadily
1:03:06promoted the development of the tanchion
1:03:08finance that thereby contribute to the
1:03:10decarbonation in Asia and globally while
1:03:14supporting the growth of the investment
1:03:16opportunity needed to the achieve the
1:03:18transition. Japan remain open to the
1:03:22working with our countries, institutions
1:03:24and market participant that share our
1:03:27interest in the advancing the these
1:03:29objectives. Throughout the forum such as
1:03:32at today's seminar, we hope to the
1:03:35exchange experience and the practical
1:03:37knowledge, the deep mering and explore
1:03:40the coming and programmatic approach to
1:03:43the trans finance that can support the
1:03:46decarbonation across the different
1:03:47regions and economies. That concludes my
1:03:50presentation. Thank you for your
1:03:51attention.
1:04:03Now, u Mr. Robert Young, head of
1:04:06sustainable banking development at the
1:04:08Hong Kong Monetary Authority, will
1:04:10deliver a video presentation on policy
1:04:12initiatives to support Hong Kong's
1:04:14sustainable finance ecosystem.
1:04:23Hello, good morning everyone. I'm Ronald
1:04:26Young, head of sustainable banking
1:04:28development at the Hong Kong Monetary
1:04:30Authority.
1:04:33Special thanks to FSS for having me here
1:04:37and I'd like to start with an apologies.
1:04:40So I apologize for not being able to be
1:04:43there in so to share this with you due
1:04:47to some last minute business emergency.
1:04:50I'm hoping that I can make it next year
1:04:53and I was at the uh 2024 version of this
1:04:56conference and I had very good
1:04:58experience. So hopefully next year will
1:05:01be even better and I'm going to be there
1:05:03to to be with you and interact more
1:05:06closely with you.
1:05:09So for those of you who are not very
1:05:11familiar with the HMA, the Hong Kong
1:05:13Monetary Authority, I would like to
1:05:16start with explaining what HGMA does.
1:05:20HMA is at the same time a policy maker
1:05:24and a regulator for the banking sector,
1:05:26but at the same time is also a market
1:05:29developer, an ecosystem builder,
1:05:32capacity builder and an investor.
1:05:36So in terms of being a policy maker and
1:05:39regulator, we regulate the banking
1:05:42sector. So we formulate uh policies such
1:05:45as capital requirements for banks and
1:05:47then we supervise the banks, make sure
1:05:49they are operating on a safe and sound
1:05:52basis.
1:05:53And as a market developer, we help
1:05:56develop uh the bond market for Hong Kong
1:06:00as well as the use of offshore remn. So
1:06:03these are just a number of things we do.
1:06:05And then uh in terms of being an
1:06:07ecosystem creator, we are very uh much
1:06:11appreciative of the value that fintech
1:06:14would bring and the risk that fintech
1:06:17would at the same time bring. So we
1:06:20actually uh are working a lot on
1:06:22creating an ecosystem for fintech but
1:06:24the ecosystem has to be healthy and we
1:06:27are doing a lot of things to make sure
1:06:29of that. And then uh in terms of
1:06:31capacity building uh we are working with
1:06:34a lot of training providers to help
1:06:37build capacity for not only people at
1:06:39HMA but also people in the financial
1:06:43sector to acquire skills and knowledge
1:06:46on a variety of things including
1:06:48sustainable finance. And then uh also we
1:06:52invest the Hong Kong people's money. We
1:06:54manage the reserve for Hong Kong. So we
1:06:57have an exchange fund where we invest in
1:07:00fixed income equity investments as well
1:07:02as like private capital.
1:07:06My role as HMA
1:07:08I is uh I'm the head of sustainable
1:07:11banking development. So it's about
1:07:13sustainable finance and banking and in
1:07:16what I do uh it encompasses uh all these
1:07:20roles for HMA. So for example uh
1:07:24I'm responsible for uh formulating
1:07:26policy to uh facilitate the management
1:07:29of climate risk and I'm also responsible
1:07:32for scale up sustainable capital flow
1:07:34developing uh enabling tools to do that
1:07:38and then I'm also responsible for
1:07:41promoting green fintech and at the same
1:07:44time I'm working closely with our
1:07:46exchange funds colleagues and work with
1:07:48them to support them on their
1:07:50sustainable investing. efforts.
1:07:53So um today I'll quickly go through what
1:07:56HMA does in terms of sustainable finance
1:07:59and banking and then uh we can actually
1:08:02have a more interactive discussions
1:08:04during the Q&A and moderator section.
1:08:11Okay. So slide two
1:08:16back in 2024 the end of the year we have
1:08:20uh created and published what is what we
1:08:23call an HMA sustainable finance action
1:08:26agenda. So in the agenda we set out
1:08:30eight goals
1:08:32spanning banking investing financing and
1:08:37inclusiveness.
1:08:38So let me highlight a few of these
1:08:40items. So as for banking, we set out an
1:08:44aspirational goal for the banking sector
1:08:46to achieve net zero in their own
1:08:49emissions in their own operations by
1:08:522030 and their finance emissions by
1:08:552050.
1:08:56And at the same time, we would like to
1:08:58enhance the transparency of the banking
1:09:01system. So Hong Kong is implementing an
1:09:03ISSB road map and we are responsible for
1:09:06the banking sector implementation.
1:09:09And as for financing, Hong Kong has been
1:09:13playing a role as the regional
1:09:15sustainable finance hub. And then we
1:09:17would like to further develop that role
1:09:21for Hong Kong to uh to be the go-to
1:09:24sustainable financing platform of the
1:09:27region and beyond.
1:09:29And then uh in terms of like uh being a
1:09:32sustainable finance platform, we not
1:09:34only want to grow the volume but at the
1:09:36same time we want healthy development
1:09:39and we also want to catalyze innovation
1:09:41in sustainable finance. So uh this not
1:09:45only includes people uh developing new
1:09:47financial products for their clients to
1:09:50use but at the same time uh it would
1:09:52include like enhancing a fintech
1:09:54ecosystem so people can do sustainable
1:09:57finance in a more transparent and more
1:09:59efficient way.
1:10:03Next slide.
1:10:07Uh at HMA uh we don't stop at the agenda
1:10:11setting phrase. So the agenda include uh
1:10:14uh eight goals but then uh for each of
1:10:16these goals we have been implementing
1:10:19policies to fulfill those. So uh there
1:10:22are many goals and then each goals are
1:10:24quite uh there are many initiatives and
1:10:26each initiatives are quite detailed. So
1:10:29I won't have time to go into everything
1:10:31but let me highlight a few key things.
1:10:34So um for example uh in terms of setting
1:10:37standard and facilitating readiness uh
1:10:41we are developing the Hong Kong
1:10:42taxonomy. So we are developing uh
1:10:45taxonomy with the purpose of scaling up
1:10:48sustainable finance capital flow and by
1:10:51providing uh clear and transparent
1:10:54definitions for people to make uh
1:10:56informed decisions.
1:10:58So um phase one of the tonami was
1:11:01published back in 2024 and phase 2 A we
1:11:06published in in January 2026 and we are
1:11:09progressing on phase 2B and beyond. So
1:11:12and we'll publish it uh shortly over the
1:11:15next uh two weeks or so next week or so
1:11:18in fact. Yeah. And then um the taxonomy
1:11:21currently have six sectors and 25
1:11:24economic activities. And as for
1:11:26criteria, it includes green and
1:11:30transition. And as for climate change
1:11:33objective, we have climate change
1:11:36mitigation and climate change
1:11:38adaptation.
1:11:40So um as we speak, uh we are finalizing
1:11:43the prototype of phase 2B. So phase 2B
1:11:46undergone significant expansion on both
1:11:49the adaptation taxonomy and the
1:11:51mitigation taxonomy.
1:11:54And besides taxonomy uh we have always
1:11:57been working on uh transition planning
1:11:59for banks. So uh at least for the past
1:12:02couple of years. So uh a few years ago
1:12:05we issue a set of high level principles
1:12:08to assist banks in terms of maintaining
1:12:10safety and soundless in the real economy
1:12:13transition. So we issue a set of
1:12:17guidelines and then we did a survey uh
1:12:19with the banks and then we issue uh some
1:12:22high level uh best practice or good
1:12:24practices from what we have seen from
1:12:27the survey and then what we are working
1:12:29on in is the guidelines. So in the
1:12:32guidelines uh we have gone through uh
1:12:36two rounds of consultation. solicit
1:12:38feedback uh from the industry and then
1:12:41uh we are actually in the process of
1:12:43finalizing the guidelines which will be
1:12:45published uh within uh this month
1:12:49and then uh in terms of sustainability
1:12:51disclosure so I've briefly mentioned uh
1:12:54Hong Kong has an ISSB road map and then
1:12:57we are responsible for the banking
1:12:58sector implementation so um Hong Kong
1:13:02has a target to fully adopt to ISSB by
1:13:05no later than 2028 A so we are actually
1:13:09uh actively formulating uh the policy
1:13:11requirements. So we expect to uh come to
1:13:14the market for consultation uh by the
1:13:17end of this year or early next year.
1:13:20[snorts] And then uh before we come up
1:13:22with the requirements actually we spend
1:13:25a bulk of uh earlier part of this year
1:13:28to uh conduct a survey with banks and
1:13:30analyze the current sustainability
1:13:33disclosure landscape of the banks. And
1:13:36then uh as a result of the studies we
1:13:38were able to understand the pain points
1:13:40and the key challenges for banks to
1:13:42implement this kind of standards. So uh
1:13:45in our policy requirements we'll take
1:13:47that into account.
1:13:50And then uh moving down to uh
1:13:53maintaining climate resilience. So uh
1:13:55Hong Kong actually has issue a guidance
1:13:59GS1 on climate risk management back in
1:14:022021. So these uh guidance is in active
1:14:06uh implementation and then we have
1:14:08conduct uh a number of uh thematic
1:14:11examinations on selected aspects on
1:14:14blanks climates climate risk management
1:14:16before and then uh we'll continue to um
1:14:20implement this module and then from time
1:14:22to time we will uh have discussions with
1:14:25bank on how best to uh improve the
1:14:27climate risk management and then uh also
1:14:31we have implement two rounds of climate
1:14:33climate risk stress test and then uh
1:14:35thanks to the bank's active
1:14:37participation uh it was very successful
1:14:39and then uh the outcome of the of the
1:14:43stress tests uh have told us that the
1:14:46Hong Kong banking sector is resilient to
1:14:49uh severe climate related shocks under
1:14:52various scenarios.
1:14:55Moving on to the next slide. Um on the
1:14:58side of market development, uh we have a
1:15:01green and sustainable finance grant
1:15:03scheme. So uh this scheme is to
1:15:06subsidize partially the transaction cost
1:15:09for raising sustainable debt in Hong
1:15:11Kong. So um since the launch of the
1:15:15scheme back in 2021, we have subsidized
1:15:19more than 710
1:15:21green and sustainable finance debt
1:15:23instruments issued in Hong Kong with a
1:15:26total like underlying issuance size of
1:15:28over 200 billion equivalent as of July
1:15:322026.
1:15:34And then um in addition to incentivizing
1:15:38the market to issue more instruments uh
1:15:42we also like uh do it um set out an
1:15:45example and then uh we help run the Hong
1:15:49Kong government green and sustainable
1:15:51bond program and the bond program has
1:15:55successfully issue US dollar equivalent
1:15:5833 billion worth of green bonds in
1:16:01international retail and tokenized
1:16:03format.
1:16:05So this actually set up a demonstrative
1:16:07effect for the market to follow. And uh
1:16:11in terms of sector development, you
1:16:12know, I mentioned uh green fintech uh a
1:16:15number of time. So we actually organized
1:16:18a global green fintech competitions last
1:16:20year uh to promote the use of technology
1:16:23and encourage innovations. So we were
1:16:26able to attract uh more than 140 entries
1:16:29to the uh competitions from 26
1:16:32jurisdictions
1:16:34and the participants uh spread out
1:16:37across the region. So uh with Europe as
1:16:40the largest share of participation but
1:16:43then like Asia uh is a close and then uh
1:16:46we have a lot of candidates from North
1:16:48America and a number of them from
1:16:50Australia and Africa as well. And then
1:16:54um so it's a truly global competition
1:16:57and then we were able to bring cutting
1:16:59edge solutions to Hong Kong to showcase
1:17:01to potential investors and users and for
1:17:04them to actually um understand where are
1:17:08the potentials and hopefully to
1:17:10incentivize them to use the the
1:17:12solutions.
1:17:14And next slide. Um I appreciate I'm
1:17:18running out of time. So maybe I'll just
1:17:20highlight uh data solutions. So um you
1:17:24know Hong Kong we have developed a
1:17:26physical risk assessment tools uh for
1:17:28the banking sector to use. So the
1:17:31banking sector told us like one of the
1:17:33key challenges for managing physical
1:17:36climate risk is the lack of uh data
1:17:38solutions.
1:17:40So we have developed a platform for them
1:17:43to assess the impact of physical risk on
1:17:45residential and commercial buildings in
1:17:47Hong Kong under different climate
1:17:49scenarios. And so far we have uh
1:17:52analyzed uh the banking sector have
1:17:54analyzed more than 1.9 million uh assets
1:17:58as of August 2026.
1:18:02So I appreciate I'm running out of time.
1:18:04So, uh, if you have any questions, so
1:18:06hopefully we can have a a more fruitful,
1:18:09uh, exchange during the Q&A section.
1:18:11Thank you.
1:18:14>> Thank you very much.
1:18:18Next, Director Camille Blackburn from
1:18:20the UK Financial Conduct Authority will
1:18:23discuss the outcomes of the UK's
1:18:25transition finance pilot program. Let us
1:18:29welcome her with a big round of
1:18:30applause.
1:18:36Thank you everyone for having me here
1:18:37this morning. It's a great pleasure to
1:18:39be here. Um, as we all know in this room
1:18:42because we're interested in this topic,
1:18:45the starting point for transition
1:18:48finance is to recognize a simple reality
1:18:51that getting to or even close to net
1:18:54zero is not just about financing green
1:18:57projects and activities.
1:19:00Assets that are currently high emitting
1:19:02also need to be financed and financed in
1:19:05a way that supports their
1:19:07decarbonization.
1:19:10Most of the emissions reduction in the
1:19:12global economy will come from sectors
1:19:16that are not considered green today.
1:19:19These include transport, steel, heavy
1:19:23industry and power generation
1:19:25in many countries. These are vital
1:19:28sectors to any economy and the challenge
1:19:31is not about merely financing them but
1:19:34financing them in a way that supports
1:19:36their credible pathway to
1:19:38decarbonization.
1:19:41That's why we applaud your new
1:19:43transition finance guidelines here in
1:19:46Korea.
1:19:48Financing the transition is important as
1:19:50economies around the world seek to
1:19:52reduce their emissions and prepare for
1:19:54the structural shifts in how their
1:19:58economies operate.
1:20:00The UK is no different, but we need to
1:20:04act cognizant of the UK's role in global
1:20:09markets.
1:20:10A recent financial index report
1:20:13confirmed that the UK is the second most
1:20:16international financial services center
1:20:18market after the US.
1:20:22The UK is already a hub for sustainable
1:20:24finance and the government has restated
1:20:27its intentions to enhance that.
1:20:32We will support global businesses to
1:20:34mobilize capital particularly towards
1:20:38emerging markets and developing
1:20:40economies.
1:20:43The FCA supports credible growth and the
1:20:47evolution of the transition finance
1:20:49market with the government. Although the
1:20:53government has chosen not to have a UK
1:20:56taxonomy,
1:20:58there are many initiatives supported by
1:21:01us and the market.
1:21:05Uh the Transition Finance Council has
1:21:08worked since February 2025 to leverage
1:21:10the UK's existing strength
1:21:13uh to credibly raise transition capital.
1:21:17And one significant output of the
1:21:19council was the development of its
1:21:22transition finance guidelines which are
1:21:25nowhere near as detailed as yours.
1:21:29Um it those guidelines identify credible
1:21:33transition finance opportunities for
1:21:35companies that are currently not yet
1:21:37green but can credibly be known as
1:21:42transition finance initiatives.
1:21:45We at the FCA have also supported the
1:21:49development of the market. Last year we
1:21:52undertook a review of sustainability
1:21:54linked loan markets including transition
1:21:58finance instruments.
1:22:01For this review, we worked with lenders
1:22:04to identify areas for improvement and
1:22:06raise standards within the market.
1:22:10We did a pilot
1:22:12where we examined end to end the
1:22:16financing of climate solutions and how
1:22:19effectively our financial system
1:22:22supported such projects and companies to
1:22:25grow and attract investment.
1:22:28Our work in this area continues.
1:22:33But capital flows are global, supply
1:22:36chains are global. The green transition
1:22:40is global. For that reason,
1:22:42international alignment is essential.
1:22:46Transition finance, the financing of
1:22:49activities and entities that are not yet
1:22:51green, but on a credible path, can be
1:22:54challenging and left open to
1:22:56greenwashing concerns.
1:22:58The Korean Financial Services
1:23:00Commission's publication of your
1:23:02transition finance guidelines is a very
1:23:05helpful addition to the ecosystem.
1:23:08Having guard rails where financing
1:23:11entities or activities is important to
1:23:14ensuring credibility.
1:23:17We see parallel in Korea's holistic
1:23:20approach to transition finance with that
1:23:23in the UK where we have guidelines
1:23:26supporting transition loans as well as
1:23:29guidelines for entity level transition
1:23:31finance.
1:23:34We will continue to observe the
1:23:36developments and implementation of this
1:23:38approach in Korea with keen interest
1:23:41not only as regulators of the capital
1:23:44market but also as regulators of buyside
1:23:49investors.
1:23:51Asian economies are very appealing to
1:23:54investors looking to finance the
1:23:56transition to net zero.
1:23:59Asia remains highly dependent on fossil
1:24:02fuels with many countries having fossil
1:24:04fuels that are more than 80% of their
1:24:07energy mix. The investable opportunity
1:24:11into the transition of Asian economies
1:24:14is very attractive for investors in the
1:24:17UK market given the large transition
1:24:21potential of this region.
1:24:24The UK market is fortunate to host
1:24:27investment offices of the largest number
1:24:30of global pension funds of any financial
1:24:33center. The Nordics, the Europeans,
1:24:36Asian, African, Canadians, Australian,
1:24:40all looking for investment opportunities
1:24:43in this area.
1:24:46The FCA is keen to explore how to
1:24:49enhance interoperability between the UK
1:24:52and Korean market participants as
1:24:54alignment is critical to getting flows
1:24:57of global capital allocated optimally to
1:25:01transition.
1:25:04As these global frameworks start being
1:25:06embedded, it is vital that conversations
1:25:09between jurisdictions take place to
1:25:11ensure greater alignment between
1:25:14approaches.
1:25:16The success of transition is dependent
1:25:19on international collaboration and on
1:25:22mutual learning. This is why continued
1:25:25dialogue between the UK, Korea, and our
1:25:28other international partners on the
1:25:30panel today is going to be important,
1:25:34particularly as we move into
1:25:35implementing these frameworks in the
1:25:38real economy. Thank you.
1:25:48Last but not least, group general
1:25:50manager Hal Gunke from the Australia and
1:25:52New Zealand Banking Group will present
1:25:54the role of sustainable finance in
1:25:56Australia's lowcarbon transition. Let us
1:25:59give him a warm round of applause.
1:26:05>> Yeah, good morning everyone. Uh
1:26:07absolutely fantastic to be here. I've
1:26:09been in soul many many times and I
1:26:11always enjoy coming back seeing a lot of
1:26:13familiar but also new faces. As the MC
1:26:16kindly said, I'm Helga. I work for ANZ.
1:26:19For those that are not so familiar, ANZ
1:26:21is an Australia headquartered bank
1:26:23operating across Asia and the Pacific
1:26:25including here uh in Korea and very very
1:26:28very nice to be back indeed.
1:26:31If we go to the first slide, I thought I
1:26:34start with a positive message
1:26:38and the positive message is that the
1:26:40transition is actually advancing.
1:26:44I speak to a lot of people around the
1:26:45world and I always hear Helga the world
1:26:49has changed.
1:26:52And I think what these people are trying
1:26:53to tell me is that yes, we live in
1:26:56troubled times, challenging context,
1:26:59geopolitics, conflicts, economic
1:27:02competitiveness, energy security.
1:27:06So sustainability is deprioritized. It's
1:27:08not happening anymore. I hear this
1:27:11everywhere.
1:27:12The world has changed.
1:27:16The world has changed ever since I was
1:27:18born. And I was really really lucky to
1:27:20look at data that actually demonstrates
1:27:22if we could kindly go to the
1:27:26first slide.
1:27:30Not yet ready for the positive message,
1:27:32but in one second.
1:27:36Can we? Okay. Anyway, I I paraphrase it.
1:27:42I'm a big fan of data. 10 years ago, for
1:27:46every dollar the world has spent on
1:27:48fossil fuels, we spent 85 cents on clean
1:27:53technologies.
1:27:55Last year, for every dollar the world
1:27:57spent on fossil fuels,
1:28:00obviously it's me
1:28:03s the solutions can be so simple.
1:28:07Last year, for every dollar the world
1:28:10spent on fossil fuels, we spent $2 on
1:28:13clean technologies. There's a structural
1:28:16shift in capital.
1:28:20On the right hand side, you see, and
1:28:22we're all familiar with that, the strong
1:28:25growth of renewables in the power
1:28:28markets. Again, very often I hear, oh,
1:28:31renewables are growing, but they're just
1:28:33satisfying the increase in energy
1:28:35demand. That's about it. They're not
1:28:37replacing fossil fuels. Not correct.
1:28:40The growth rate in clean technologies is
1:28:43greater than the growth rate of end
1:28:45demand for energy services.
1:28:48And if we do this year after year after
1:28:50year after year,
1:28:52mathematical compounding, fossil fuels
1:28:55will be squeezed out of the system. Not
1:28:57by 2050. It will take longer, but it's
1:29:00going to it's going to happen. Now,
1:29:02admittedly, the transition is not
1:29:04linear. It's not happening everywhere in
1:29:06every country in every sector. The
1:29:09availability of commercially viable
1:29:11technologies is not the same in all the
1:29:12sectors. Very conscious about it that it
1:29:15will remain nonlinear. Differences and
1:29:18markets persist but it is actually
1:29:20happening.
1:29:24Australia is an interesting country in
1:29:26this transition because we cover all
1:29:28facets of the transition.
1:29:31Global leader in rooftop solar. If you
1:29:34fly to Sydney and the plane is about to
1:29:37land, you can see solar panels
1:29:40everywhere on rooftops.
1:29:43The last 12 months
1:29:46skyrocketing growth in batteries
1:29:49in private households. So in Australia
1:29:52the transition is happening via
1:29:54households in private residences.
1:29:58At the same time, one of the largest LG
1:30:01exporters, iron, ore, lithium, a lot of
1:30:05critical minerals.
1:30:07And as Camille just said, and I think
1:30:09also Ambassador Krooks, we cannot
1:30:11transition despite these sectors, but
1:30:13only with these sectors. We need to
1:30:15embrace them and help them on their
1:30:17journey.
1:30:20So, we talked a lot about transition
1:30:22finance, and that is indeed a critical
1:30:24point. The question for a bank is not
1:30:26anymore is this a green activity.
1:30:32The portion of our economy that is
1:30:34actually green is unbelievably small.
1:30:38Let me give you a number. Europe is
1:30:41always considered the global trailblazer
1:30:43in sustainability.
1:30:46European banks publish what they call a
1:30:48green asset ratio.
1:30:50In simple terms, what are the green
1:30:53assets on my book divided by my total
1:30:55book?
1:30:57And if I'm not wrong, the percentage is
1:30:59roughly 7% at the moment. My point
1:31:02being, the vast majority of economic
1:31:04activities is not green.
1:31:07And we need to finance green. We need to
1:31:09do more of it, but we need to actually
1:31:12finance all the other parts. Now,
1:31:14sustainable finance has played a
1:31:16critical role. The Australian market is
1:31:18actually quite huge, but the vast
1:31:20majority of these sustainable finance is
1:31:24channeled towards green assets and
1:31:26activities and we're going to change
1:31:28this.
1:31:30So ultimately, we're here to not grow
1:31:34the green portion of the economy. We
1:31:37need to green the entire economy. That's
1:31:39the key message.
1:31:43Now, a lot was talked about finance and
1:31:46finance being critical, finance being
1:31:48important, and I agree. Without finance,
1:31:51we're not going to do this.
1:31:55But even as a banker,
1:31:57I don't think finance is going to
1:31:59single-handedly drive this transition.
1:32:01It's not going to happen this way.
1:32:04We need systems solutions.
1:32:07We need policy makers, regulators from
1:32:09both the finance and the real economy
1:32:11and the private sector and finance
1:32:12sector to come together to accomplish
1:32:15this. Finance is just one element of a
1:32:18broader system level change that we
1:32:20need. Very often capital is actually not
1:32:23the constraint.
1:32:26I have lived in Asia for almost 20
1:32:28years. I've been in countries like
1:32:30Indonesia and India so many times in my
1:32:33life and people say, "Oh, there is no
1:32:34capital.
1:32:37There is enough capital to finance
1:32:38that." But very often we miss an
1:32:41enabling policy and regulatory framework
1:32:43not within finance in the real economy
1:32:46itself for certainty to persist and and
1:32:49money to flow. So the key message is
1:32:52everyone needs to chip in. This is not
1:32:55going to be financed.
1:32:58finance will be a critical partner.
1:33:04Another part where global finance has
1:33:07not really focused on too much as of
1:33:09late, it's a bit the forgotten stepchild
1:33:12is climate adaptation and resilience. So
1:33:15if you think about it, mitigation
1:33:19is a boy is about avoiding the
1:33:21unmanageable.
1:33:23Adaptation resilience is about managing
1:33:26the unavoidable. There are going to be
1:33:28implications from climate change and in
1:33:31Australia we see this many many things
1:33:33are happening not always because of
1:33:35climate by the way but we see a lot of
1:33:37damages um to physical infrastructure
1:33:40and economic activities and the world
1:33:42hasn't focused enough on adjusting on
1:33:45adapting and becoming more resilient.
1:33:48There are two numbers here. They come
1:33:49from Munich Re. In 2025, we had 73
1:33:52billion in losses from natural
1:33:54disasters. But the but the scary number
1:33:57is the other one. The vast majority was
1:34:00not insured. So for us as a bank, there
1:34:02are many channels um towards financial
1:34:05risks arising from all of this. One is
1:34:08the lack of availability or the lack of
1:34:10affordability of insurance. And this is
1:34:13already an issue for us today. not in 20
1:34:15years, not in 40 years, today. So, we're
1:34:17also going to have to channel money into
1:34:20adaptation uh and and resilience. For us
1:34:23as a bank, what this means, among
1:34:25others, is that we need to build
1:34:27capabilities and physical risk
1:34:28assessments. And we have, for example,
1:34:30built a tool that allows us in a very
1:34:33granular way to assess physical hazards
1:34:36uh for specific land plots across across
1:34:39the country. So, these are two areas
1:34:42where banks need to do more. transition
1:34:44finance, financing stuff that is not yet
1:34:47green and climate adaptation and
1:34:50resilience. And on transition finance,
1:34:54regulators like here in Korea and also
1:34:56in other countries help us by creating
1:34:59frameworks and taxonomies, but the
1:35:01reality is they're never going to cover
1:35:03everything.
1:35:04So as a bank, we actually also need to
1:35:06build capabilities inhouse to assess
1:35:09transition activities ourselves.
1:35:12The world has not yet come together and
1:35:14agreed on what a credible transition
1:35:16activity might look like. In certain
1:35:18countries yet, yes. In certain other
1:35:20countries, no. So, we need to have this
1:35:22capability. As a bank, we need to be
1:35:25okay that our financed emissions go up
1:35:28if we do more transition finance because
1:35:30financed emissions these are the
1:35:32emissions we are enabling with our
1:35:34lending and financing. So we give money
1:35:36to a company, company does something
1:35:39that something emits something and we
1:35:41are enabling that. So our finance
1:35:43emissions will go up if we do more
1:35:46transition finance and that should be
1:35:48okay under the condition that there is a
1:35:51credible transition plan behind what we
1:35:54actually financing.
1:35:58So last message coming back this is
1:36:00going to be a team effort. This
1:36:02transition is not going to be a sprint.
1:36:03It's an ultramarathon.
1:36:05But we have to run it bloody fast, but
1:36:08it's going to take a long time. It's not
1:36:10going to be linear and it's only going
1:36:12to happen if everyone chips in. And I
1:36:16was very delighted to hear today policy
1:36:18makers and regulators talking all about
1:36:21this because everyone has a role to
1:36:23play. Nobody can do it alone. Thank you.
1:36:36Uh thank you very much to all four
1:36:39speakers uh for those insightful
1:36:41presentation. I am Sakam from uh
1:36:45graduate school of environmental finance
1:36:48university. I'm very happy to uh to
1:36:51moderate the uh discussion sections.
1:36:55Uh we have a very limited time for our
1:36:58uh discussion. So I will ask one focus
1:37:01question to each of you and
1:37:06please keep your response to around one
1:37:09minute. I'm sorry about the time limit.
1:37:12Before turning to the question uh let me
1:37:14briefly bring together the main points
1:37:17from the four uh presentations.
1:37:20Uh Mr. So Yano showed how Japan is
1:37:22building a broad GX framework that
1:37:25brings together public and private
1:37:27investment, transition finance and
1:37:29sustainability disclosure and assurance
1:37:32and GX ETFs and more credible carbon
1:37:35market infrastructures.
1:37:37And importantly for Asia, Japan is also
1:37:41looking beyond labeled in instrument
1:37:45through the inclusive approach to
1:37:46transition finance. And second, Mr.
1:37:49Young showed how the Hong Kong monetary
1:37:51authorities moving from broad commitment
1:37:53to implementation through taxonomies and
1:37:57tension planning and climate risk
1:37:59supervision, market incentives, capacity
1:38:01building and and practical data tools.
1:38:05And Miss Blackburn remind us that the
1:38:08transition finance uh must support
1:38:10companies and sectors which are not yet
1:38:14green but have a credible
1:38:16decarbonization pathway. She also
1:38:19emphasized that the international
1:38:21alignment is very important because
1:38:24capital and supply chain move across
1:38:27borders. And finally Mr. Minkl uh
1:38:31brought us back to the Lear economies.
1:38:33His key point was that the capital is
1:38:35not always the main constraint. The grid
1:38:39as he mentioned that grid con uh
1:38:42connection approval infrastructure and
1:38:44policy certainties can be just as
1:38:46important in turning investment into
1:38:49actual emission deductions. With mind,
1:38:52let me begin with Mr. Yano.
1:38:55Uh, Japan has proposed a broader and
1:38:58more inclusive approach to transition
1:39:00finance that reflects Asian economy and
1:39:03financial structures. What minimum
1:39:06eligibility criteria and monitoring
1:39:08arrangement do you think are needed to
1:39:12scale up this financing while avoiding
1:39:15carbon rocket and greenwashing?
1:39:28Thank you. Thank you question. Yeah. And
1:39:31actually this is a you know one of the
1:39:33questions um we hear we most frequently
1:39:37hear from the you know the investors. So
1:39:39each time we discuss a transion finance
1:39:41with the investors and asking yeah scale
1:39:44how we do scale up tion finance while
1:39:47avoiding the green washing and carbon
1:39:49locking a very difficult question um
1:39:52actually the based on my experience and
1:39:56perspectives I will talk about it from
1:39:59the just three three perspective the the
1:40:02first one is you know the finance should
1:40:04be the anchor in the the cable
1:40:07transition the planning
1:40:09align with the you know long-term
1:40:11objectives and supported by the you know
1:40:13milestones. Um second that these should
1:40:17be grounded in the know science based
1:40:21and the spec sector specific the pathway
1:40:23the recognizing you know each industry
1:40:28start from the different points and the
1:40:30face the different challenges in context
1:40:33of the tanial finance and third is that
1:40:36this most important you know um
1:40:39accountability and the transparency is
1:40:43essential throughout
1:40:44you know this disclosure and third party
1:40:47opinions and you know the impact
1:40:51reporting if if these elements are in
1:40:55place know that we will be able to
1:40:57reduce the risk of the you know green
1:41:00washing and the cabin. Yeah.
1:41:09>> Yeah. Thank you. That's a very helpful
1:41:11way of balancing inclusiveness uh with
1:41:13the market credibility.
1:41:15Uh now I
1:41:19miss you online.
1:41:22So uh let me ask you one question. The
1:41:25Hong Kong monetary authorities has
1:41:27developed a comprehensive framework
1:41:29including taxonomy, transition planning
1:41:32and practical data tools. uh in your
1:41:34views what is the biggest obstacle to
1:41:38expanding transition finance formemes
1:41:40and non-listed companies?
1:41:44>> Hey uh thank you. So uh first of all
1:41:47like apologize for not being able to be
1:41:49there. So I hope to join you guys uh
1:41:51next year and um your question is
1:41:55actually very uh important. So basically
1:41:58uh we have been grappling with the same
1:42:00situation uh every day in Hong Kong.
1:42:03Yeah. So uhmeme are generally not as
1:42:06well resources as the um conglomerates
1:42:10or or big companies. So um more often
1:42:13than notmemes uh for example in Hong
1:42:15Kong they won't have a dedicated
1:42:18department to do ESG. So very often the
1:42:21finance department or the accounting
1:42:23department have to do everything. So I
1:42:26think um in that case I think one of the
1:42:29biggest obstacle is capacity. So um
1:42:33theme probably uh lack capacity in most
1:42:36cases but then uh we want them uh to to
1:42:40resolve this hurdle. I think they can
1:42:42acquire capacity
1:42:45but they don't need to build it from
1:42:46scratch. For example like uh banks in
1:42:49Hong Kong they have a lot of knowledge
1:42:51in ESG so they can work with their theme
1:42:54clients to help them build the capacity.
1:42:56Um and I mentioned like the data tools
1:42:59in my presentation. So we have uh SME
1:43:03non-list company questionnaire to help
1:43:05theme during disclosure and then uh we
1:43:08also have done um something we call uh
1:43:11GH missions uh estimator. Uh this can
1:43:15actually help theme to uh estimate their
1:43:18GH emissions based on the fuel
1:43:20consumptions or electricity
1:43:22consumptions. And then in Hong Kong uh
1:43:25fintech is a very important topic is
1:43:27high on the agenda. So we have been
1:43:30promoting the use of green fintech and
1:43:32then uh creating a ecosystem for people
1:43:36to understand where the cutting edge
1:43:38solutions are and then try to utilize it
1:43:41to make the ESG process more efficient
1:43:44and more transparent. So a and for the
1:43:47government and regulator we are also
1:43:49very well aware that uh transition is
1:43:52very important and um uh and helping um
1:43:57people to do transition plan will be
1:43:59very helpful. So uh we are working on
1:44:02what we call a transition plan pilot to
1:44:05set out some examples for good uh
1:44:07transition plan so that companies big
1:44:10and small they can follow.
1:44:14>> Okay. Yeah. Thank you very much for your
1:44:16uh insightful uh answers. Uh Miss
1:44:19Blackburn, let me bring in the
1:44:21international dimension. You highlighted
1:44:23the importance of international
1:44:25alignment while UK and Asian
1:44:28jurisdiction are taking somewhat
1:44:30different approaches. In your views,
1:44:32what common elements are most important
1:44:34for these different framework to work
1:44:36together and maintain investor
1:44:39competence? Thank you for the question
1:44:41and in a minute in a minute um uh there
1:44:45are different approaches globally uh but
1:44:48uh we will even from this discussion you
1:44:51can see that all of us have at the heart
1:44:52stronger capital markets greater
1:44:55investment pro investor protection and
1:44:58sustainable um long-term growth so
1:45:02careers guidelines I think uh exemplify
1:45:05how there will be convergence
1:45:07international convergence about these
1:45:08things careers guidelines. You can see
1:45:11references to the EU and European
1:45:13approaches. You can also see references
1:45:16uh to the Japanese approach. And this
1:45:19learning and watching and learning from
1:45:21each other is only going to get more and
1:45:23more important. Uh there are some uh
1:45:26important divergences. Voluntary
1:45:28mandatory compliant explain you know how
1:45:31how strict uh regulators are with these
1:45:34sorts of processes. verification
1:45:37processes, level of detail necessary to
1:45:39support financing, uh the role of carbon
1:45:42markets and innovation approaches are
1:45:45some of the divergences that we will see
1:45:47close over over the next few year. Um we
1:45:51have seen an enormous rise in
1:45:53international collaboration in the area
1:45:55of transition finance over the last few
1:45:57years fostered by bodies such as uh the
1:46:01international transition plan network
1:46:03that we saw referred to earlier and for
1:46:05regulators the FFSSB
1:46:08and IOSCO and as our ambassador
1:46:11mentioned uh earlier that the UK and
1:46:14Korea have an enormous opportunity right
1:46:17in front of us with the consecutive
1:46:19presidents ies of G20 where the UK uh
1:46:23takes over presidency next year and then
1:46:25Korea follows. So to the extent that we
1:46:28can get transition onto that agenda, we
1:46:30have an opportunity to carry something
1:46:33forward uh over that time frame as well.
1:46:36Thanks.
1:46:37>> Thank you. Finally, let me turn to the
1:46:40Mr. Winkl. You made the important point
1:46:43that the capital is not always the main
1:46:46constraint as grid connection approval
1:46:49and policy certainties also matters. In
1:46:52the situations should banks go beyond
1:46:55providing finance and take more active
1:46:57role in coordinating government industry
1:47:00and investors.
1:47:03>> Yes. So in in in short yes um we can do
1:47:06this and one advantage banks have is we
1:47:09have typically a very deep um network of
1:47:12relationships across sectors and across
1:47:14markets. Let me give you one specific
1:47:15example to bring this to life a little
1:47:18bit. Uh about a year ago or so um I
1:47:21teamed up with the IEA, International
1:47:23Energy Agency, um a Paris headquartered
1:47:26think tank and uh we went to Jakarta,
1:47:28Indonesia and the exam question was how
1:47:33do we scale battery energy storage
1:47:35systems, one critical part of clean
1:47:38technologies in Indonesia at scale. And
1:47:42we thought well the only way we can
1:47:44address this exam question is getting
1:47:46everyone in the room. So, we jointly
1:47:49brought the people in that have the
1:47:50checkbook, the ministry of finance, um
1:47:53regulators from the from the real
1:47:55economy, uh PLN, the state-owned
1:47:57utility, the entire ecosystem, uh
1:48:00private sector ecosystem on on bass
1:48:02battery energy storage systems, uh and
1:48:05select financial institutions like ADB,
1:48:07uh Southern Wealth Funds. And I
1:48:10mentioned this example for one reason
1:48:11only. That was powerful because we
1:48:15identified what are the roadblocks to us
1:48:19really scaling battery energy storage
1:48:21systems. And that's just one clean
1:48:22technology. You could replicate this
1:48:25with any other topic as well. Um and it
1:48:27was very clear that many of the
1:48:30roadblocks are not sitting in the
1:48:31finance sector. There was something
1:48:33around uh the regulatory framework uh
1:48:36the policy setting but having everyone
1:48:38in the room listening to each other was
1:48:41insanely powerful. So yes, banks can can
1:48:44do this uh typically as partners with
1:48:46others.
1:48:48>> Okay, thank you for all your uh
1:48:51insightful answers. We are almost out of
1:48:54time. Let me uh close with one common
1:48:57message from uh today's discussions. Uh
1:49:00transition finance is not simply about
1:49:02creating more financial products or
1:49:04attaching new label to existing finance.
1:49:07I think it's about helping companies and
1:49:10sectors make credible change in the LER
1:49:12economies that requires although
1:49:15flexibilities to reflect different
1:49:17national and sectoral circumstances but
1:49:20it also requires clear target and
1:49:23reliable data effective safeguard and
1:49:26close coordination among government
1:49:28finance and industries. The four
1:49:31presentation have shown us that no
1:49:33single policy or financial instrument
1:49:36can deliver the transition on its own.
1:49:40What matters is how these different
1:49:42elements work together to turn capital
1:49:44into clear and measurable progress. And
1:49:48thank you again for uh thank you again
1:49:50to all four speakers for sharing your
1:49:53valuable insight. And now I will hand
1:49:55the floor back to our MC.
1:50:01Ladies and gentlemen, please give a
1:50:03round of applause to Professor Han and
1:50:05the panelists for guiding us through
1:50:07part one.
1:50:13[music]
1:50:17We will now take a short 10-minut break
1:50:20and resume with part two. [music]
1:50:22Refreshments and beverages are available
1:50:25at the back of this room. So, please
1:50:27feel free to help [music] yourself. I
1:50:29look forward to welcoming you back
1:50:30shortly.
2:04:58International Conference will begin
2:05:00shortly. [music] We ask you to take your
2:05:02seats.
2:05:12Heat. Heat.
2:05:31[music]
2:05:55>> [music]
2:05:59>> Welcome back, ladies and gentlemen. We
2:06:01will now begin part two of the 2026
2:06:04International Conference, Future Climate
2:06:06Finance in the Era of Green Transition,
2:06:09co-hosted by the Financial Supervisory
2:06:11Service of Korea and Ewa Women's
2:06:13University. Part two will be moderated
2:06:17by professor Amjiong from KQAIST and
2:06:20feature presentations by principal
2:06:22economist Yuji Yamashita from the Asian
2:06:25Development Bank, fellow international
2:06:28initiatives Masa Nakamura from Tokyo
2:06:31Marine, Director Louise Keem from ING
2:06:34Korea and senior manager Kim Hanzhin
2:06:37from the financial supervisory service
2:06:39and the presentations will be followed
2:06:41by a panel discussion. Now, let us
2:06:44welcome Professor Um and the speakers to
2:06:46the stage with a big round of applause.
2:06:52[music]
2:07:07Okay. Uh let us begin our second session
2:07:10of today's event. Uh good morning uh
2:07:13everyone. Uh welcome to our session. Uh
2:07:16before we begin, I'd like to briefly
2:07:18acknowledge it the the devastating
2:07:20disaster occurred in Nepal over the last
2:07:24uh over the past week. Uh and then that
2:07:27catastrophic flood allegedly triggered
2:07:30by a a glacier uh collapse has caused
2:07:34enormous loss of lives and severe damage
2:07:37to communities and critical
2:07:39infrastructures.
2:07:41The tragedy is a a stark reminder that
2:07:44physical climate risk is no longer a
2:07:47distant abstract concern. It is already
2:07:51affecting lives uh infrastructure,
2:07:54businesses and financial institutions
2:07:56and ultimately uh the stability and
2:07:58resilience of of our economies.
2:08:02Then the qu key question is not simply
2:08:05how we measure these risks but how we
2:08:08prepare for them and finance resilience
2:08:11uh and transfer and manage those risks
2:08:14and incorporate those physical climate
2:08:16risk uh into financial decision making.
2:08:20So that's exactly what we are going to
2:08:22explore uh in today's session.
2:08:26Uh so here we have four uh in uh
2:08:29distinguished speakers uh uh uh Yugji
2:08:33Yamashita from ADB uh and then he will
2:08:36be talking about regional risk sharing
2:08:38mechanisms and Mas Mazaki Nagamura from
2:08:43Tokyo Marine uh he'll be talking about
2:08:46insurance and societal resilience and
2:08:49Luis Kim uh uh from she'll be talking
2:08:53about banks risk management adaptation
2:08:56uh adaptation finance and lastly Hanjing
2:09:00Kim from FSS will be talking about risk
2:09:03assessment and financial sector
2:09:05regulation issues. So uh so we will be
2:09:08having uh you know presentation from
2:09:10each of them uh and then you are uh
2:09:13given with uh 12 minutes as I announced
2:09:18and then preferably maybe it would be
2:09:20good better for you to limit your
2:09:22presentation within 10 minutes uh that
2:09:24would be much much better.
2:09:27So and then after having all
2:09:29presentations we'll be having uh panel
2:09:31discussions. Okay. So with that uh let's
2:09:35begin uh first presentation from Yugji
2:09:37Mashita from ADB.
2:09:46Thank you very much. Uh first of all uh
2:09:48I'd like to express my sincere
2:09:50appreciation for the great hospitality
2:09:53of uh FSS Korea and women's uh
2:09:56university. It is my great honor and
2:10:00pleasure to be here and being uh one of
2:10:02panelists of this great uh event. Okay.
2:10:06First uh let me explain to you what I do
2:10:11uh at Asian Development Bank. I joined
2:10:13ADB around one year ago. My role is
2:10:17basically to lead two initiative, two
2:10:20regional initiatives of ASEAN plus
2:10:23three. Plus three means Korea, Japan and
2:10:27China. Okay.
2:10:31First initiative is Asian bond market
2:10:35initiative. The origin of Asian bond
2:10:37market initiative uh uh goes back to
2:10:40early 2000 uh after the uh Asian
2:10:44financial crisis in 1997 which I think
2:10:47many Korean uh people remembered. We uh
2:10:52tried to develop a local currency bond
2:10:55markets in Asia in order to prevent
2:10:58Asian financial crisis from occurring
2:11:00again. That is my first role. The second
2:11:03role is recently I took the
2:11:06responsibility to lead disaster risk
2:11:08financial initiative in ASEN plus three.
2:11:12Let me uh start from uh our work about
2:11:15sustainability sustainability finance uh
2:11:18in Asian bond market initiative.
2:11:24Okay. Um we do a lot uh for sustainable
2:11:28finance but as ABMI is mainly about how
2:11:32to make bond markets in Asia. We do uh
2:11:38reach advisory support to make uh bond
2:11:42market ecosystem. It includes project
2:11:45selection. It includes uh also support
2:11:49for green and sustainable uh finance
2:11:52framework development. We also support
2:11:54external review. We also showcase the
2:11:57transaction in international discussion.
2:12:00What I want to uh highlight and
2:12:02emphasize here is uh we we do not do
2:12:07some advisory supports in uh each of
2:12:09them in isolation. Our aim is to develop
2:12:13uh sustainable finance as a ecosystem in
2:12:17Asia. Our focus is uh include how to
2:12:21develop local verifiers. We also try to
2:12:25support transition finance. As we
2:12:27discussed in uh already transition
2:12:30finance is especially important in Asian
2:12:32countries uh because some countries
2:12:35still uh uh their lives and industries
2:12:38heavily depend on uh fossil fuels uh
2:12:41such as co. You cannot divest tomorrow.
2:12:45Also we support regulatory development.
2:12:48We also support green taxonomy, capacity
2:12:51building and sustainability disclosures
2:12:54including uh ESG data.
2:13:00Uh not only ADB but also uh local uh
2:13:04governments and other organiza
2:13:06international organizations do a lot of
2:13:09efforts to make uh sustainable finance
2:13:11ecosystem in Asia. Thanks to these uh
2:13:15long-lasting efforts, uh good news is uh
2:13:18our uh sustainable finance uh especially
2:13:21sustainability bond markets is the sec
2:13:24second largest in the world uh next to
2:13:27European Union. I think uh that is uh
2:13:30that shows clearly our efforts uh
2:13:34bearing a fruit in Asia.
2:13:40Now I want to explain about our pilot is
2:13:44insurance programs uh to uh establish
2:13:46good precedents uh in Asia. For
2:13:49instance, we have already uh catalyzed
2:13:53uh sustainable uh bond issuances over 5
2:13:58billion USD. Also we support uh in total
2:14:03we supported more than 15 billion
2:14:05issuances of sustainability bonds. Uh we
2:14:10fortunately received uh in 12
2:14:13international uh awards for sustainable
2:14:16uh uh bond transactions. We also
2:14:18supported for local verifiers.
2:14:23uh what I want to mention is uh again uh
2:14:26also is under ABMI we have a dedicated
2:14:31uh specific forum called DBMF design um
2:14:35digital bond market uh forum.
2:14:38Fortunately, this uh forum is chaired by
2:14:41professor Hume and our you know ambition
2:14:44is to make a using latest technologies
2:14:48including blockchain uh we try to make a
2:14:51you know carbon uh transaction ecosystem
2:14:54in Asia hopefully connecting Korea and
2:14:57Japan.
2:14:59Now allow me to move on to my next role
2:15:03as a leader of ASEAN plus three DRFI
2:15:08disaster risk finance initiative. Of
2:15:10course sustainability finance and
2:15:12disaster risk finance are closely
2:15:15related but uh DRFI has its own specific
2:15:19focus.
2:15:21Okay.
2:15:24First uh I want to highlight how serious
2:15:28uh disasters are. I think everyone
2:15:30already understands uh you know
2:15:33frequency and severity of natural
2:15:35disasters such as floods, drought,
2:15:38uh typhoons are increasing.
2:15:41But uh this graph clearly shows the
2:15:44reality after 2000. uh if you count
2:15:48economic loss of disasters such as
2:15:52tropical cyclone it is already over two
2:15:56trillion US dollars
2:15:58uh climate rel change related disasters
2:16:02are not constrained to uh typhoon uh
2:16:04cyclones it also includes uh floating uh
2:16:09it is al the total amount of losses of
2:16:12floss is also close to two
2:16:17uh they are climate change related but
2:16:21uh we also have earthquakes that have
2:16:25have very little to do with uh climate
2:16:27change but in countries like uh Japan,
2:16:31Philippines, Indonesia they suffer a lot
2:16:34uh from earthquakes.
2:16:37So that is the uh unpleasant reality.
2:16:43So now let me uh explain uh what is the
2:16:46basic uh approach of Asian Development
2:16:50Bank to cope with these uh disasters.
2:16:54Now that is risk layer approach. The
2:16:57idea itself is quite uh straightforward.
2:17:00You uh uh categorize various disasters
2:17:05by two dimensions. One is frequency and
2:17:08the other is severity. Typically for
2:17:12high frequency well it happens uh many
2:17:15times in a year for high frequency uh
2:17:18events but with low civility typically
2:17:22the best prescription is government
2:17:25spare some money to cope with uh these
2:17:28disasters. However, uh when it comes to
2:17:32disasters with less uh frequency, but if
2:17:36it comes uh which causes huge disasters,
2:17:41uh government budget alone cannot cope
2:17:44with it with that in that case uh it
2:17:47makes sense before disaster occurs you
2:17:50transfer the risk to the market. That is
2:17:53risk transfer approach. That is the
2:17:56basic idea of risk layer approach.
2:18:01So now uh uh ADB especially my team is
2:18:05taking a very uh serious and important
2:18:09responsibility. We take up the
2:18:11secretariat role of assean plus three
2:18:15disaster risk finance initiative. Next
2:18:18year uh this year co-chairs uh
2:18:20Philippines and Japan. Next year
2:18:22co-chairs uh Korea and Singapore. So
2:18:25therefore uh we expect strong leadership
2:18:29of Korea in that respect as well.
2:18:34Okay. Finally uh I want to briefly
2:18:37explain uh ADB's activities that is
2:18:40catbond catastrophic bonds. Of course,
2:18:44ADB does a lot of initiatives about
2:18:46disasters, but um uh catastrophic bonds
2:18:51uh is one of the most uh interesting uh
2:18:56uh you know initiative which lays uh
2:18:58attention by uh many uh people and many
2:19:03market participants. The idea itself is
2:19:06quite simple. uh ADB on behalf of some
2:19:10developing countries in this case on
2:19:12behalf of uh Kiggiz Republic and
2:19:16Tajikistan ADB issues uh a bond uh
2:19:20specific feature bond called uh uh
2:19:24catastrophic bond. The essence of CAT
2:19:27bond is if suppose you issue uh ADB
2:19:31issues the bond uh with the amount of
2:19:34100. If disaster unfortunately disaster
2:19:38occurs in Kygystan or Tajikistan
2:19:42the principle of 100 is cut uh to zero
2:19:47or 30. It means investors will uh lose a
2:19:52lot of money. However, that money is uh
2:19:56transferred to vulnerable people and
2:19:59vulnerablememes
2:20:01who actually suffered a lot from these
2:20:04disasters. Uh this is uh this kind of
2:20:08idea is uh regarded as one of very
2:20:10promising uh uh approach to uh make risk
2:20:15transfer uh more feasible. However,
2:20:17still there are lots lots of uh uh
2:20:20challenges uh including as of now the
2:20:24price of this uh cat bond is very
2:20:26expensive. So but um maybe in the Q
2:20:30session we can discuss uh how how we can
2:20:34uh address these challenges. But uh
2:20:37again we expect strong leadership of
2:20:39Korea next year. So let's uh uh address
2:20:43disaster risk together. Let me stop
2:20:45here. Thank you very much.
2:20:48Thank you so much uh uh Mr. Yamashita.
2:20:50Uh thank you for uh touching upon the
2:20:52issue of uh regional level uh disaster
2:20:55risk management and finance issues. Now
2:20:59uh the floor is going to uh Mr. Nagabura
2:21:04uh from Tokyo Marine
2:21:09Ho.
2:21:11I'm
2:21:16Thank you very much to FSS for inviting
2:21:18me to this very prestigious and very
2:21:21relevant uh conference. My name is
2:21:23Masaki Nagamura and I'm coming from
2:21:26Tokyo Marine which is not an uh not a
2:21:31shipping company but it's an insurance
2:21:33company based in Tokyo, Japan. I have
2:21:36come to learn that many people uh
2:21:38confuse Tukarine as a as a shipping
2:21:40company. But the the fact is that we
2:21:43started as a marine cargo insurer. Uh so
2:21:46we're keeping that name. But these days
2:21:48we ensure almost everything that that
2:21:51has economic economic value. My role at
2:21:55Tokimarine is to interact with various
2:21:58international initiatives that has to do
2:22:00with climate change or disaster risks.
2:22:03Most prominently, I used to served at
2:22:06the TCFD underneath the FSB as a member
2:22:10representing representing Japan.
2:22:13In parallel, I have also been involved
2:22:15in the Apex Finance Ministers process
2:22:17where I serve as Sherpa to promote
2:22:20disaster risk financing in the region
2:22:23and I work very closely with Yamashita
2:22:26and his ADB colleagues.
2:22:29And from early this year I have become I
2:22:32assumed the role uh as a member of the
2:22:35govern govern governing board of the
2:22:37integrity council for the voluntary
2:22:39carbon market ICBCM in short.
2:22:43So um those are the topics that I cover
2:22:46uh in my daily u uh role.
2:22:52Today I'd like to uh give focus on
2:22:54adaptation and resilience. But allow me
2:22:57to touch very briefly on transition
2:22:59plans because that was the topic that I
2:23:02was fortunate enough to discuss two
2:23:05years ago at this same conference.
2:23:11So as an insurance company um we
2:23:16approach somewhat differently from banks
2:23:18or uh asset managers on on climate
2:23:22change.
2:23:24Um since [clears throat] we are an
2:23:26insurer, we don't have financial
2:23:29ownership over our policy holders. So
2:23:33we've been thinking about as a PNC
2:23:36insurer, how can we uh how can we be
2:23:39effective in
2:23:42urging our policyh holders to turn from
2:23:46fossilbased operation
2:23:48to to to green opportunity uh to green
2:23:51um management.
2:23:53Now
2:23:55simply stop underwriting fossil fuel
2:23:58business does not really work. Um
2:24:02it's rather important to continue
2:24:04working with fossil fuel industries and
2:24:07help them uh understand the importance
2:24:10of change and do whatever thing we can
2:24:13to help um uh accelerate that that
2:24:17shift.
2:24:19That's how we have come with the idea of
2:24:22uh engagement level one, two and three.
2:24:27Back in uh 2023, we uh introduced this
2:24:30idea
2:24:32and uh we declared that we would become
2:24:35we would be covering
2:24:37200 of the most highly emitting uh
2:24:40companies
2:24:43and that represents roughly 90% of the
2:24:46emissions of of of tokine and nichido
2:24:49our Japanese operating arm.
2:24:52Now level one starts with identifying
2:24:56issues. We we sit down with the c with
2:24:58our corporate customer and
2:25:02uh identify what is the problem and then
2:25:05we on level two we uh
2:25:10make proposals based on the findings and
2:25:13then le at level three we provide
2:25:16insurance solutions.
2:25:18So altogether we we're hopeful that with
2:25:21this kind of support our policyh holders
2:25:24will start making meaningful progress
2:25:27towards decarbonization.
2:25:30It's not just that we introduced this uh
2:25:33engagement uh system. We started to
2:25:37monitor the progress by implementing
2:25:40Bloomberg NES um data and start tracking
2:25:45the progress towards how the discussion
2:25:48how our engagement with our customers
2:25:50are progressing and the scorecard is is
2:25:54shown on the right hand side. Obviously
2:25:57you find that energy sectors,
2:26:03materials and infrastructures those
2:26:06industries are leading the way in terms
2:26:10of our our engagement efforts.
2:26:15So this is uh where we are at this point
2:26:17but we are continuing on this path.
2:26:22Now let me move on to the main topic of
2:26:25uh of my presentation which is
2:26:27adaptation and resilience.
2:26:30Now these days it is very difficult to
2:26:34find an international forum on on
2:26:37finance which does not discuss about
2:26:40adaptation and resilience
2:26:42and GF is one of them. Um as you may
2:26:45know Gance stands for glass globe
2:26:47financial alliance for net zero. The
2:26:50naming comes from its efforts to pursue
2:26:54net zero. But ironically, what they're
2:26:57giving focus these days is resilience,
2:27:00adaptation and resilience.
2:27:03And back in June, they published a
2:27:05report entitled investing in resilience
2:27:10and I was fortunate to be part of the u
2:27:13uh information provider on on this
2:27:16report.
2:27:18Now what and this is a collection of 20
2:27:22plus case studies uh that are uh
2:27:26exercised by by exercised by leading
2:27:29financial institutions uh around the
2:27:31globe
2:27:33that includes banks, asset managers and
2:27:36insurance companies. But what I like
2:27:39about this report is it it goes beyond
2:27:42merely showcasing what has been done. It
2:27:46gives uh tip it gives tips on what can h
2:27:51how the case can be replicated in other
2:27:54places and in that way uh it gives a
2:27:58scaling opportunity uh for others to
2:28:01follow.
2:28:04Now at Tokyo Marine as a property and
2:28:07casualty insurer
2:28:09we are taking this approach we're we we
2:28:14consider climate and nature as an
2:28:17intertwined topics. There's it's really
2:28:21difficult to separate the two. So we
2:28:24started to give a combined focus on
2:28:27nature and climate because climate
2:28:30change does a lot of harm to to nature.
2:28:34uh and and also the natural uh
2:28:37deterioration of forests and other um uh
2:28:40natural habitat can slow the u
2:28:46the effort towards uh decarbonization.
2:28:49So I think it we we think that it makes
2:28:51sense to uh take uh to keep a combined
2:28:55approach on climate and nature and
2:28:57together we think that it uh it enables
2:29:01us to give a more um meaningful uh uh
2:29:05contribution towards resilience.
2:29:10Now what I would like to stress today is
2:29:13that Tokyo Marine is going beyond the
2:29:16mere uh insurance uh insurance premium
2:29:20underwriting and insurance payout um
2:29:23operation.
2:29:25Um we have found that um it's it's uh
2:29:30it's no no longer sufficient to go by
2:29:33the traditional uh traditional
2:29:35operation.
2:29:37So we're trying we're expanding our
2:29:39focus from pre- disaster to uh post-
2:29:43disaster
2:29:45on on the pre- disaster stage we offer u
2:29:48whatever resilience uh supporting um
2:29:52services to to our customers
2:29:56and on the other hand we also offer u
2:29:59whatever service that expedited the
2:30:01recovery post disaster. So this is the
2:30:04kind of approach that we started taking
2:30:07uh over the past several years and we
2:30:10are assisted by the newly um
2:30:14uh by by a by an entity which new newly
2:30:17joined to uh joined the Tokyo group. IDN
2:30:21is its name. Um it has a profound
2:30:27knowledge and expertise on
2:30:29infrastructure investment. they have
2:30:32been assisting many uh developing
2:30:36economies uh projects
2:30:39and um also not not just on the man-made
2:30:43uh industrial side but as as well as
2:30:46nature side as well. So they have a very
2:30:49profound um expertise
2:30:52which we rely on and uh we're using that
2:30:56uh service capability as a um uh as a
2:31:02uh benefit of uh using tokine service.
2:31:08Now let me uh share with you two
2:31:11examples of how
2:31:14the insurance industry can effectively
2:31:18um
2:31:20be part of the uh resilience um strategy
2:31:25on a on a
2:31:28uh policym level.
2:31:31The first one has to do with uh how to
2:31:34facilitate rivering flood risk assess uh
2:31:37assessment.
2:31:39This is led by the ministry of land
2:31:42infrastructure trans transport and and
2:31:45tourism MLIT in short of Japan.
2:31:49Um
2:31:52over the past several years they have
2:31:55introduced
2:31:58a a philosophy of um working rivering
2:32:04flood uh collaboration
2:32:07where instead of relying on u
2:32:12solidifying the dikes or other other
2:32:15types of hardwares they're inviting all
2:32:18community members that surround the uh
2:32:21the river basin to work together to
2:32:24share the same goal of the uh the to
2:32:27work on the shared goal of resilience
2:32:30and
2:32:32uh and work together towards um
2:32:35stronger uh resilience.
2:32:38Now what the MIT um noticed was
2:32:43the corporates are now working on how to
2:32:45promote TCFD disclosures.
2:32:48So as a company you are expected to
2:32:51disclose physical risks on climate
2:32:54change but this practice has been uh
2:32:58lagged behind. Um
2:33:02so so the MLIT tried to stimulate the
2:33:05corporate interest in in this aspect. So
2:33:08what they did was to put together a
2:33:11guide a guide book uh based on which
2:33:15even if you have very limited resources
2:33:20to work on the companies can
2:33:24self-evaluate
2:33:26uh their river and flood risk by using
2:33:30readily available data
2:33:34um which can al which can be used for TC
2:33:37safety disclosures.
2:33:39I was personally involved in this
2:33:41process and
2:33:43uh contributed from an insurance uh
2:33:46sector perspective.
2:33:48Now the same kind of approach uh was
2:33:50done uh on on port facilities. Um the
2:33:55ministry office is the same the MLIT but
2:33:58this one was promoted by the uh the port
2:34:01uh department
2:34:03and I I think Korea uh is in a similar
2:34:06situ situation but our countries rely
2:34:10heavily on imported products and seaborn
2:34:13[clears throat] traffic is really
2:34:15important
2:34:16but ports are
2:34:19situated in a very uh n natural disaster
2:34:23susceptible area. So
2:34:27what is uh important is to have a uh
2:34:30resilient uh port facilities.
2:34:33But the problem with the port facilities
2:34:36are that no matter how you strengthen
2:34:39your own facility
2:34:41such as the oil refinery in this
2:34:43picture, if you have a weakly protected
2:34:47neighbor neighboring manufacturing
2:34:49plant, the flooded water still comes in
2:34:52and invade your facility.
2:34:55So there has to be um
2:35:01collective uh approach and what is
2:35:05recommended here is that those who um uh
2:35:10consist the same port community will
2:35:13work together to develop a shared
2:35:17resilience guideline
2:35:19and the MLIT would give some tax
2:35:23incentives in case uh companies need to
2:35:26upgrade their u port facilities.
2:35:30Here again MLIT came back uh introduced
2:35:35a guideline uh where uh
2:35:39corporates which consists of port
2:35:41facilities
2:35:44uh can self assess their risk level.
2:35:48Now collectively this will um if this
2:35:52works properly this should attract more
2:35:55um interest from investors and financial
2:35:57institutions and that's the way we're
2:35:59trying to create some positive financial
2:36:02flow into those uh uh in the in the
2:36:06communities involved. So that's what I
2:36:09have uh to to present. Thank you very
2:36:11much for listening.
2:36:12>> Thank you so much. Thank you so much Mr.
2:36:14Namura. uh and thank you so much for
2:36:16sharing uh uh your perspective uh
2:36:19insurance perspective on the the
2:36:21adaptation and resilience uh and also
2:36:23thank you for sharing the interesting
2:36:25case studies as well. Now uh the the
2:36:28floor goes to uh uh Luis Kim M uh Luis
2:36:33Kim from ING and then she'll be talking
2:36:35about the bank's perspective on risk
2:36:39management and adaptation finance.
2:36:41>> Okay, let me adjust
2:36:45to be adaptable to my height. So, okay.
2:36:49And professor, I need to apologize. I
2:36:52forgot to bring my watch. So, if I'm
2:36:55talking a bit too much, you can maybe
2:36:57>> I will let you know. Don't worry.
2:36:58[laughter]
2:36:58>> Shout my name or do anything. So, I will
2:37:01just stop. But yeah. Okay. Still a bit
2:37:04high. Okay. Okay. It's a great pleasure
2:37:07to join today's international
2:37:09conference. And my name is Luis Kim. And
2:37:12today I'll be talking mainly about the
2:37:15physical climate risk from commercial
2:37:17banks perspective.
2:37:19So uh we I only have nine and a half
2:37:22minutes. So I want to address quite
2:37:24quickly but I want to have three step.
2:37:27One is how we convert physical climate
2:37:29risk to financial risk. So pretty much
2:37:32using the financial language so we can
2:37:34use and how banks are managing this
2:37:37risk. And the last one that maybe most
2:37:40important one is how we can consider
2:37:42this risk as opportunity as well.
2:37:48So as a Korean I really like to define
2:37:51something and having clear dictionary as
2:37:53well. So even though there was deep
2:37:55discussion on transition I just want to
2:37:58highlight the difference between
2:37:59transition and the physical risk from
2:38:02the vocabulary perspective. So
2:38:05transition risk you are already familiar
2:38:08this is the risk arising because the
2:38:10society is trans transitioning to the
2:38:12low carbon economy. So anything about
2:38:14legal risk, business risk, this is
2:38:17something falling into the transition
2:38:19risk for physical risk. This is
2:38:22something I guess more directly relevant
2:38:26to most of people when they are thinking
2:38:28about climate because if there is any
2:38:30extreme heat, flooding, any kind of
2:38:33impact from that specific climate event
2:38:37that will be the physical risk. But I
2:38:39want to highlight these differences
2:38:40because from the banking perspective
2:38:43physical risk is highly relating to the
2:38:46specific asset and the location unlike
2:38:48the transition risk is like more like
2:38:50the macro level very broad definition as
2:38:53well. So for example if there are two
2:38:56company in the same sector pretty much
2:38:58similar business models and maybe same
2:39:01Iita as of now if they have different
2:39:04approaches to physical climate risk on
2:39:06resilience side they may have totally
2:39:09different cash flow forecast in five to
2:39:1210 years.
2:39:15So this is relatively old study back in
2:39:192020. So our economist actually had some
2:39:23kind of analysis on how extreme heat
2:39:25actually affect our economy and the GDP
2:39:28and inflation as well. So for based on
2:39:32this study it's actually affecting 0.3
2:39:35to 0.5% and GDP. If you're thinking
2:39:38about our GDP growth rate or Korea and
2:39:41most of developed country, this is
2:39:43pretty much really big number and if you
2:39:46thinking about some regions that are
2:39:48more highly exposed, it can be going up
2:39:50to 1%. And I think if we are analyzing
2:39:54more recent kind of cases, it can even
2:39:58be going higher than this one as well.
2:40:02And this is not just about some kind of
2:40:05people working outside like for example
2:40:07like construction workers exposed to sun
2:40:10every day. This is also affecting our
2:40:12supply chain and you you may remember
2:40:15that extreme heat can actually melt down
2:40:17anything. So that can affect the typical
2:40:19power generation or some other transport
2:40:23or train anything relating to you. And
2:40:27if there is any issue with grid is also
2:40:30affecting our electricity and all the
2:40:33other AI also will be affected. So no
2:40:36one can be escaped from this issues to
2:40:39be honest. So this is something and that
2:40:42is also triggering a lot of issue with
2:40:45policy makers when they are projecting
2:40:47the growth and inflation expectation
2:40:50because it's extremely hard to estimate
2:40:52how climate will happen in next year
2:40:55compared to maybe unemployment rate and
2:40:58inflation rate as well.
2:41:02So from bank's perspective, physical
2:41:05climate risk should not be considered as
2:41:08a separate bucket of risk. We need to
2:41:11kind of put it it's kind of Lego. You
2:41:14need to kind of menty
2:41:17bucket that banks are already looking at
2:41:19it. So for example, if there is anything
2:41:24that's affecting the default risk of
2:41:27issues or the client that we lend the
2:41:30money, it will be the credit risk. If
2:41:33this climate risk is affecting specific
2:41:35asset that are collateralized by banks,
2:41:39it will be the collateral risk. If this
2:41:41is affecting some of our people, our
2:41:44building, it will be our operational
2:41:46risk. So if there is any type of
2:41:50industry that we are putting more money
2:41:52and that are exposed by this risk it
2:41:54will be the concentration risk and it
2:41:58can be the market and liquidity risk and
2:42:00ultimately this is the strategic risk
2:42:02for banks and that's the interesting
2:42:04area where where you can actually
2:42:07convert this to strategic opportunity as
2:42:09well but it's easy to say but maybe it's
2:42:11not that easy to actually execute but
2:42:13that would be something we need to
2:42:15discuss further.
2:42:18So this is the slide I really like and
2:42:22hard to explain. So I will try to be
2:42:25step by step. So this is how banks are
2:42:27analyzing the physical risk. So we need
2:42:31to actually identify and the map hazard
2:42:34and exposure and we need to quantify the
2:42:37physical impact from this hazard and we
2:42:40need to translate into the financial
2:42:42losses. So this is how I'm kind of like
2:42:45changing the narrative from science to
2:42:48finance and there should be some
2:42:50languages that the each party understand
2:42:52and put it into our valuation model and
2:42:55the risk model as well.
2:42:58So there are a lot of jargon like loss
2:43:01given default and all the other thing
2:43:03just just consider that if something
2:43:05happened how would that affect the the
2:43:08possibility of banks to get paid. So
2:43:11this is something we are trying to do it
2:43:14into this credit model
2:43:17and I already said it's easy to say and
2:43:21looks quite nice in slide but in real
2:43:24term it's extremely hard because a lot
2:43:26of modeling typical financial modeling
2:43:29you have back data for at least three to
2:43:31five years or maybe even 10 to 20 years
2:43:34for stock market and bond market for
2:43:37this specific issues
2:43:40any type of historical data may not be
2:43:42that relevant. It's not easy to create
2:43:45causality between certain heat wave with
2:43:48some type of losses because everything
2:43:50is kind of idiosyncratic in a way. So we
2:43:52need to relying on historical data but
2:43:55at the same time we need to rely on
2:43:57stress testing and scenario analysis and
2:43:59I know that our regulator is also
2:44:02putting a lot of efforts on that area to
2:44:05help us to going into the right
2:44:08direction as well. So this is more like
2:44:11the combination of these postante and
2:44:13xante type of analysis plus some type of
2:44:16qualitative analysis as well. And the
2:44:19other thing that makes this a little bit
2:44:21more difficult is that if there is any
2:44:24type of action from players to pre
2:44:27prevent this hazard that can also change
2:44:30all the dynamic of metrics. So suppose
2:44:32there are two houses one with fire alarm
2:44:35the other one without fire alarm and
2:44:37there is fire the the effect will be
2:44:40totally different and it can be like
2:44:42100% loss 0% loss. So that's something
2:44:45how this is is quite complicated in
2:44:48nearly
2:44:51so this is another one how we are using
2:44:55tools and sciences to detect this type
2:44:57of risk and putting into our models. So
2:45:02uh maybe in this nice map you can kind
2:45:05of see if there is there's more data
2:45:08that we can relying on we can actually
2:45:11use that specific data kind of tagging
2:45:13into the specific asset. So that would
2:45:16be the best kind of idea but if we don't
2:45:18have that one we are using postal
2:45:21level of data or anything kind of
2:45:24regional data as well. I know that AI
2:45:27has been helping this type of climate
2:45:30and a analysis a lot as well these days.
2:45:33So this is one of those kind of positive
2:45:36thing that we can we can kind of expect
2:45:38to happen as well. So the idea is
2:45:42identifying the physical risk and
2:45:44connecting it to the existing losses and
2:45:46how we can evaluate in the banking
2:45:48balance sheet.
2:45:51So this is a little bit of bright side
2:45:53because I've been only talking about
2:45:55risk and risk and my job is actually not
2:45:58the risk of professional. So I want to
2:46:00bring it into a little bit positive
2:46:02territory. So if there is company or any
2:46:06type of institution putting their many
2:46:09their money to prevent this type of
2:46:12climate risk especially physical risk.
2:46:14If they do it well, it can actually turn
2:46:18into the revenue or maybe some type of
2:46:21saving of loss. And there is some
2:46:24studies of analyzing you put $1, it can
2:46:27be turning into the two to three dollars
2:46:29as well. But maybe in terms of time
2:46:31horizon, it may not be the same
2:46:33financial year. But if you have lying
2:46:35three to five years of projection with
2:46:38solid kind of forecast, it can actually
2:46:40be something putting your valuation into
2:46:44the higher jone as well.
2:46:49So what I want to emphasize is that we
2:46:52already know there are risk. We already
2:46:54know there are tools available that may
2:46:56not be perfect but still practically
2:46:58available for banks and investors to use
2:47:02for analyzing their portfolio. So our
2:47:06next step would be putting this into the
2:47:08perspective of where we need to put
2:47:11money for mitigation or adaptation and
2:47:14resilience. So from commercial bank's
2:47:17perspective
2:47:18we cannot put money even if there is
2:47:21really good kind of like result will be
2:47:24happening for public we still need to
2:47:26maintain certain type of return. So
2:47:29because of that kind of
2:47:31commercialization,
2:47:33we need to actually do this kind of
2:47:35layers and identify specific project
2:47:39that would be bankable and having the
2:47:42greatest impact given the limited risk
2:47:46appetite that we have.
2:47:50So this will be the practical action
2:47:52agenda for commercial banks. So first
2:47:56step is to mapping the exposure. So you
2:47:59need to understand where the exposure is
2:48:02and what is your current status of your
2:48:04lending portfolio based on this mapping
2:48:08and you need to quantify the impact. So
2:48:10in that quantification depending on the
2:48:13model and depending on the quality of
2:48:15data the result would be a little bit
2:48:17different but the direction will be
2:48:19mostly in the same direction as well and
2:48:23you need to integrate decisions. So in
2:48:25the middle part is something we need to
2:48:28bring this topic to more to the top
2:48:31senior management level as well. It's
2:48:33not just about the talk between risk
2:48:35professionals and maybe ESG specialist
2:48:38and some of financial profession. It's
2:48:40something the seuite or senior
2:48:43management need to consider in their
2:48:45five to 10 year kind of road map as
2:48:49well.
2:48:49>> So maybe you can finish in 30 seconds.
2:48:52>> 30 seconds. Okay. And the last part
2:48:55engage with clients and financing
2:48:57resilience and having good partner like
2:48:59ADB do Dr. Marine will be something that
2:49:02we can actually scaling up this and
2:49:04thank you professor. Thank you.
2:49:06>> Thank you so much. Thank you so much uh
2:49:08uh Miss Kim uh for sharing commercial
2:49:11bank's perspective uh and on risk
2:49:13management and adaptation finance. Now
2:49:16the last but not the least uh
2:49:18presentation uh will be given by uh uh
2:49:21Mr. Hanjing Kim Hanjin Kim from FSS and
2:49:25then he'll be talking about the risk
2:49:27measurement and quantification and also
2:49:30financial sector regulation.
2:49:51Fore
2:49:55stress test.
2:50:18Stretch.
2:50:39Stress. Stress. Stress.
2:50:45Stress
2:51:01financial system.
2:51:47GFS
2:51:51Fore
2:52:20test.
2:52:27Top down.
2:52:53Egypt.
2:53:08Huh?
2:53:38Okay.
2:54:09Emission pathway Nice.
2:54:22Fore!
2:54:34Foreign! Foreign!
2:55:08Stress test.
2:55:21Cemetery man.
2:56:06GDP.
2:56:16Foreign
2:56:32speech. Foreign speech.
2:57:09for
2:57:27GDP baseline.
2:57:46Foreign
2:58:06speech. Foreign speech.
2:59:04stress test.
2:59:23Walking.
2:59:31Thank you so much. Okay. Not uh not
2:59:34surprisingly we don't have much time
2:59:36remaining. So although I have prepared a
2:59:39lot of questions but uh only one
2:59:41question can can be given to each of
2:59:43these panelists. Okay. Let me begin uh
2:59:46with uh uh asking questions to Mr.
2:59:49Ramashita.
2:59:51So the risk layering approach uh you
2:59:54mentioned uh combines risk retention,
2:59:57contingent finance and insurance and
3:00:01capital market uh instruments. And the
3:00:04question is what principle should guide
3:00:07uh the allocation of disaster risk among
3:00:10governments and insurance multilateral
3:00:13institutions and private investors. How
3:00:15do you think about that issue?
3:00:17>> It doesn't work. Okay.
3:00:20Uh thank you very much. Um a very great
3:00:23question. First of all what I want to
3:00:25highlight here is even though I
3:00:27mentioned the risk layering approach it
3:00:30is just a principle uh what I want to
3:00:33say is uh every country depending on the
3:00:37local context of different countries you
3:00:39need to consider different applications.
3:00:43uh in considering the best uh policy mix
3:00:48uh I think there are basically three
3:00:51important factors. The first thing is
3:00:54fiscal space. The second thing is the
3:00:58development level of financial markets
3:01:01such as capital markets and uh insurance
3:01:03markets. The final thing is the
3:01:06availability of uh disaster related
3:01:09data. Depending on these combination of
3:01:12these three factors you can even though
3:01:14you are in line with risk clearing
3:01:16approach you can find a different
3:01:18answer. Uh let me take an example of
3:01:21Japan. Unfortunately Japan experienced a
3:01:24lots of lots of uh disasters especially
3:01:27earthquakes. However as a result of that
3:01:30in Japan there is a very welldeveloped
3:01:33uh insurance markets for earthquakes.
3:01:37But it is possible because of two
3:01:40factors. First one is uh in Japan uh you
3:01:44have very well designed standardized
3:01:47hazard data uh in every corner of Japan.
3:01:51That is one thing. Another thing is uh
3:01:54thanks to the efforts of Tokyo Marine uh
3:01:57Japan already has a very uh in-depth
3:02:00market of insurance. Thank even in
3:02:04Japan. However, I have to say uh
3:02:06insurance companies, private insurance
3:02:09companies alone cannot take all of the
3:02:12uh risks arising from earthquakes.
3:02:15Therefore, uh earthquake insurance is
3:02:18co-shared by private insurance companies
3:02:20and the government Japanese government.
3:02:23I don't think that kind of model can be
3:02:25transferred to many developing
3:02:28countries. So therefore uh so I
3:02:31explained the example of cat bond
3:02:34insurance in two centralized Asian
3:02:36countries but that is the answer by ADB
3:02:39after careful uh considerations with
3:02:42lots of conversations with these
3:02:45countries. Unfortunately these central
3:02:47Asian countries uh uh are concerned
3:02:51fiscal space is very limited also there
3:02:54is no uh financial uh developed
3:02:57financial markets. So therefore ADB
3:02:59decided ADB issues CAT bond on behalf of
3:03:04these uh central Asian countries. Uh
3:03:07that uh advantage of that approach is uh
3:03:09these countries can use the triple a
3:03:12credit rating of ADB also ADB has a lot
3:03:16of knowhows and expertise in uh capital
3:03:19markets. So that is the approach we
3:03:21provided to uh to central Asian
3:03:24countries. But probably as asan
3:03:26countries like Philippine, Indonesia, uh
3:03:28Malaysia uh have different uh context
3:03:32because they are relatively uh
3:03:35welldeveloped uh middle inome countries
3:03:37and they have uh relatively developed uh
3:03:41insurance uh markets. So therefore our
3:03:44approach as the secretariat of asan plus
3:03:46DPI we uh carefully consider tailorm
3:03:50made approach for individual countries.
3:03:53Let me stop here.
3:03:53>> Wow. Excellent. That is very interesting
3:03:55perspective and then there is no one
3:03:57sizefits all solution for risk sharing
3:03:59transferring uh is very important
3:04:01insights. Thank you so much. This brings
3:04:03us from regional risk sharing mechanisms
3:04:06to the role that insurance insurers uh
3:04:10can can play in strengthening uh
3:04:12resilience before and after disasters.
3:04:15So let me ask a question to Mr.
3:04:18Nagamura. Uh and the question is
3:04:22insurers need to price price in actually
3:04:25price in physical risk accurately but
3:04:27higher premiums or withdrawal of
3:04:31coverage can make vulnerable communities
3:04:33and business even more vulnerable or uh
3:04:36so there's a problem that how can
3:04:38insurers preserve both uh risk based
3:04:41pricing and also broadbased access to
3:04:45insure insurance as climate risk
3:04:47intensifies over time. Yes. Thank you
3:04:50very much, Professor Eon for the very
3:04:53important question. Now, I think the
3:04:56answer to that is um it can be
3:04:58approached multiple ways. We have a a
3:05:02series of counter measures that are in
3:05:04place that can be deployed. The most
3:05:06simple way of of our action is to hike
3:05:10rates. But as you said, if if you if we
3:05:13apply a sharp rate increases, that only
3:05:16helps policy holders to flee away, and
3:05:19that's not that's that's not good. Um,
3:05:21but if you review the terms and
3:05:24conditions of insurance policy, uh there
3:05:27may be some coverages which are less
3:05:29relevant to your operation. You can take
3:05:31away those and which helps to reduce the
3:05:34the premium. Also you can review the uh
3:05:37the deductibles or self-insured portion
3:05:39of policies by inc by increasing that
3:05:42part you can save uh some premium there.
3:05:45So there are some techniques to reduce
3:05:47the the impact of u increased premium um
3:05:51for for on the insurance side uh we uh
3:05:55apply we have uh an reinsurance
3:05:58community on on on the backstage. We
3:06:02deal on a daily basis with our with
3:06:04reinsurers and we also deal with the
3:06:06with capital markets such as cat bonds
3:06:09uh such as Yamashan
3:06:12introduced.
3:06:13Those are the mechanisms where we can
3:06:16manage our um our uh retained uh our
3:06:22retention portfolio uh to make it to
3:06:26make our insurance underwriting u
3:06:28sustainable.
3:06:30Um so perhaps uh in the future we may
3:06:33need to use uh capital markets more
3:06:35efficiently uh so that we can uh find
3:06:38more options of uh risk transfer. So so
3:06:42but but I can go more but I think I
3:06:46should stop you. Okay. Thank you so much
3:06:48for considering the time. Thank you so
3:06:49much for sharing very important insights
3:06:52and then these actually perspective
3:06:54example uh uh these examples show uh
3:06:58that insurers can do more than
3:07:00compensating for the losses actually it
3:07:02can help prevent and reduce them uh and
3:07:06and the next question is then how banks
3:07:08can incorporate the same resilience
3:07:10objective into their lending and
3:07:12investment practices. The question now
3:07:15going to uh m Keem is so uh adaptation
3:07:20produces substantial uh social benefits
3:07:23as you emphasized but many of those
3:07:26benefits in fact do not generate clear
3:07:30or immediate cash flows cash flows for
3:07:33investors. That is a problem. then what
3:07:35would be needed to turn adaptation from
3:07:38a compelling policy objective into a
3:07:41genuy bankable asset classes? I'd like
3:07:44to hear your perspective on that.
3:07:46>> Okay. So I guess the main issue is that
3:07:50as an investor when you put your money
3:07:52you kind of have some type of
3:07:54expectation on the return and the risk
3:07:56for the adaptation project. A lot of
3:07:59time you know the risk and the return
3:08:01that you may get in in terms of dollar
3:08:04term or in Korean one term may not
3:08:07capture what you are actually bearing
3:08:11the risk because a lot of other positive
3:08:14externalities going way beyond this
3:08:18specific project. So the one way would
3:08:20be tackling this is how we can actually
3:08:25price this you know and I guess there
3:08:28will be still some rigid that we will
3:08:30never be able to price and that's where
3:08:33public money should come in and somehow
3:08:36monetize this type of participation from
3:08:39commercial side encouraging them to kind
3:08:42of participate more on this project but
3:08:45at the same time bank should not also
3:08:48relying on public money to compensate
3:08:51most risk and just getting the juicy
3:08:53return as well. So we need to have you
3:08:56know proper measurement and the model to
3:08:59actually analyze what will be the price
3:09:01of the risk and just requesting the
3:09:04proper return not anything beyond the
3:09:07risk that we will be bearing right after
3:09:10the public money is observing some
3:09:12losses. So that would be some kind of
3:09:15slicing point and most of time this can
3:09:18be done by better measurement better
3:09:20data and also a little bit of
3:09:23aggregation of project because one
3:09:25project may be too risk so maybe if we
3:09:27can combine 100 project with the same
3:09:30theme just like a lot of time adv does
3:09:33that one as well is also diversifying
3:09:35it's easier for commercial bank to put
3:09:37their money as well.
3:09:39>> Thank you so much. Thank you so much for
3:09:40emphasizing the fact that banks needs
3:09:42better measurement and better data and
3:09:44this naturally takes us from identifying
3:09:47managing and managing physical risk to
3:09:50the challenge of financing resilience.
3:09:52And now uh our final presentation uh by
3:09:55m Mr. Kim uh examines how supervisors
3:09:59can measure uh these risk consistently
3:10:02and translate them into financial sector
3:10:04action. Now the final question goes to
3:10:08Mr. Kim is the FSS is moving toward as
3:10:12you uh uh said uh moving toward a
3:10:15shorter five-year stress test horizon uh
3:10:18to make physical climate risk more
3:10:21relevant to current financial decision-
3:10:24making. Then how can supervisors achieve
3:10:27this practical relevance uh without
3:10:30losing the sight of a severe long-term
3:10:33uh climate risk that fall outside of the
3:10:36planning horizon of financial
3:10:37institutions? That is my question to
3:10:40you. How can we reconcile those tension?
3:10:50Oh,
3:11:03test frame
3:11:10test exercise.
3:11:31Okay, thank you so much for limiting uh
3:11:33you know uh your your answers uh you
3:11:35know quite short period of time and so
3:11:38uh okay so I think we are already over
3:11:41time so I need to conclude this session
3:11:44right away uh so today's present
3:11:46presentations have shown how physical
3:11:48climate risk can can be shared across uh
3:11:52different stakeholders and also insured
3:11:54by insurers and also managed by banks
3:11:57and assessed by supervisors.
3:12:00So um no I think that it is very
3:12:03meaningful for uh MDBs representatives
3:12:06from MDBs insurers and banks and
3:12:08regulators actually talking with each
3:12:11other sitting down together uh to talk
3:12:13about innovations uh in financial sector
3:12:16you know financial sector innovation
3:12:17what I mean by financial sector
3:12:19innovation is innovation in financial
3:12:21services and also innovations in
3:12:22financial regulation. So we need to work
3:12:25on this in order to meet and and pursue
3:12:28our challenging uh task which is uh
3:12:32tackling climate crisis. So I think this
3:12:35can be a very meaningful starting point
3:12:37where we can join forces to pursue this
3:12:41innovations in climate finance and also
3:12:44uh therefore implement very very
3:12:47concrete actions to combat uh with
3:12:49climate crisis. Uh and thank you so much
3:12:52everybody for uh your attention and also
3:12:55let's give these uh panelists a big
3:12:57round no applause.
3:13:01Thank you so much. Thank you so much.
3:13:17Ladies and gentlemen, this brings us to
3:13:19[music] the end of the 2026
3:13:21International Conference, Future Climate
3:13:23Finance in the era of green transition.
3:13:26I would like to extend my sincere
3:13:28appreciation to the moderators,
3:13:30speakers, and participants [music]
3:13:31for joining us today. Later in the
3:13:34afternoon, we will continue with the
3:13:36finals of the eighth future finance AI
3:13:39challenge where creative ideas for
3:13:41future finance using AI [music] will be
3:13:44demonstrated.
3:13:45And afterwards, we will host a career
3:13:48seminar joined by people [music] in
3:13:50charge of HR at major financial
3:13:52companies. At the seminar, they will
3:13:54explain the qualities and merits that
3:13:56their firms look for in prospective
3:13:59hires. We look forward to your continued
3:14:02interest and [music] active
3:14:03participation. Thank you very much.

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