Since 2020, the NGFS long-term – and more recently, also short-term – climate scenarios have become vital resources for supervisory exercises and risk management frameworks across the financial sector. Each successive iteration of the NGFS scenarios has offered increasingly granular insights and improved integration of the macro-financial consequences of both physical and transition risks. The updated Guide reflects these advancements and the methodological progress achieved by NGFS members and the broader community.
A key addition in this edition is the emphasis on short-term scenarios, which are gaining importance for evaluating near-term financial risks arising from climate change and evolving climate policy measures.
By consolidating advancements and innovations, the Guide serves as a practical reference for authorities and financial institutions aiming to integrate climate scenario analysis into their risk management frameworks and decision-making processes. The NGFS intends for the Guide to be a living document, evolving in step with ongoing developments in the field of climate-related data, modelling approaches, and supervisory practices.
Sabine Mauderer, Chair of the NGFS and First Deputy Governor of the Deutsche Bundesbank:
“Robust and forward-looking tools like climate scenario analysis are more critical than ever to address the challenges posed by climate change. This updated Guide reflects our collective expertise and progress made in deepening our understanding of climate-related financial risks. By integrating the latest advancements in data and methodologies, we are equipping financial institutions with the tools to strengthen their resilience and make informed decisions in the face of these risks."
Livio Stracca, Chair of the NGFS Workstream “Scenario Design and Analysis”, and Deputy Director General Financial Stability at the European Central Bank:
“Over the past five years, the NGFS has made remarkable progress in deepening its understanding of the macro financial implications of climate risk. With the release of the updated Guide on Climate Scenario Analysis, we seek to share these advancements by providing a comprehensive and practical roadmap to support the integration of NGFS climate scenarios into forward looking risk assessments across the financial sector.”
About the NGFS
The Network for Greening the Financial System (NGFS), launched at the Paris One Planet Summit on 12 December 2017, is a group of central banks and supervisors, which on a voluntary basis is 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 148 central banks and supervisors and 23 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 website, LinkedIn account, and 2024 Annual Report, 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