NGFS publishes the first vintage of short-term climate scenarios

The Network for Greening the Financial System (NGFS) published today its first set of short-term climate scenarios.

Published on the 7th of May 2025

This innovative, publicly and freely available tool provides insights into the potential near-term impacts of climate policies and climate change on financial stability and our economies. By simulating sectoral and macroeconomic pathways up until 2030, they show how climate shocks can impact the economy and the financial system.


The release offers four different scenarios to assess the economic and financial impacts of physical and transition shocks. Based on the NGFS conceptual note on short-term scenarios (Oct. 2023), these scenarios were developed in collaboration with experts from leading academic institutions. The results underwent a series of quality checks to ensure their robustness. They are available for free download here.


The short-term climate scenarios were primarily developed as an input for climate stress-testing and macroeconomic risk assessment. The dataset offers a high degree of sectoral granularity, and provides financial metrics that can be directly used for climate risk assessments. The scenarios explored were selected to illustrate the potential impacts of adverse climate tail risks, in order to shed light on their likely effects on the economy and financial system. These results are also particularly useful in understanding the implications of climate risks for monetary policy, macroprudential policy and financial stability.


Sabine Mauderer, Chair of the NGFS and First Deputy Governor of the Deutsche Bundesbank:

"The new NGFS short-term climate scenarios are a milestone in enhancing our understanding of climate-related risks. Extreme weather events and abrupt changes in transition policies can significantly affect our economies and financial sectors in the short run. This new NGFS tool offers the financial community valuable insights into the implications of adverse climate scenarios in the near term, with impressive sectoral and geographical granularity. The results remind us that reducing or delaying climate action will likely worsen future economic damages."


Livio Stracca, Chair of the NGFS workstream “Scenario and Design Analysis” and Deputy Director General Financial Stability at the European Central Bank:

“The NGFS short-term scenarios represent a key addition to the analytical toolkit for understanding climate-related macroeconomic and financial risks. This new set of scenarios helps to describe the more immediate impacts of climate shocks and policy shifts, in a timeframe and level of detail that is especially relevant for investment decisions, financial supervision, monetary policy, and risk management. The short-term scenarios mark a significant step forward in supporting institutions to prepare for adverse, but plausible, climate developments and policies.”
 

The NGFS Short-term scenarios were developed in partnership with an academic consortium including Climate Finance Alpha (CLIMAFIN), E3-Modelling / RICARDO, and International Institute for Applied Systems Analysis (IIASA).


Disclaimer
Users should be aware that the NGFS is constantly working to further improve the scenarios, including with regard to physical risks or the consideration of polycrises. It cannot be excluded that the economic effects of climate change might turn out to be even more severe than visualised under the NGFS scenarios. Users should take into account tail risks of climate change, along with other risks such as nature-related ones, which are not necessarily captured by these scenarios, or the uncertainty around the occurrence of tipping points in the long term. While the NGFS climate scenarios are a helpful tool, they do not alleviate the responsibility of banks and other (financial) organisations to design and implement their own risk management frameworks, adapting them as they see appropriate. Neither the NGFS, nor its member institutions, nor any person acting on their behalf is responsible or liable for reliance on, or the use that might be made of these scenarios.


About the NGFS
The Network for Greening the Financial System (NGFS) was launched at the Paris One Planet Summit on 12 December 2017. It represents a group of central banks and supervisors, which are willing to share best practices and contribute to the development of environment and climate risk management in the financial sector, and to mobilize mainstream finance to support the transition toward a sustainable economy. The NGFS brings together 145 central banks and supervisors and 22 observers. The NGFS is chaired by Sabine Mauderer, First Deputy Governor of the Deutsche Bundesbank, with the support of the Vice Chair, Fundi Tshazibana, Deputy Governor of the South African Reserve Bank and Chief Executive Officer of the Prudential Authority. The Secretariat, headed by Yann Marin, is provided by the Banque de France.
 

For more details, visit the NGFS websiteLinkedIn account and X account or contact the NGFS Secretariat at the Banque de France: sec.ngfs@banque-france.fr
Press Office at the Banque de France : +33 (0) 1 42 92 39 00 / presse@banque-france.fr

Updated on the 7th of May 2025