Bank of Japan Gov. Haruhiko Kuroda on Thursday called on central banks to take "forward-looking steps" to manage the financial risks associated with climate change, wading in on a growing debate among policymakers over how deeply they should engage with the issue.
Kuroda said there were various challenges in managing climate-related financial risks, such as the difficulty of setting scenarios for stress tests and a lack of data.
But such challenges are no reason to delay efforts to address climate risks, he said, warning that climate change could "destabilize the financial system" in the long run.