This is a webinar in collaboration with the European Banking Institute.
The new NGFS short-term climate scenarios, published in June 2024, represent a significant advancement for the financial community. Key features include:
A focused time horizon extending to 2030, in contrast to traditional scenarios that project impacts to 2050 or 2100. This shorter timeframe closely aligns with the actionable planning horizons of central banks, supervisors, and other financial actors, and corresponds to the intermediary targets established in countries’ Nationally Determined Contributions (NDCs) which often set intermediate objectives for 2030.
Explicit incorporation of financial sector expectations, such as the perceived credibility of sustainability policies and regulations. By integrating how these expectations shape financial actors’ actions, the scenarios more accurately capture the interconnectedness of policy, markets, and climate outcomes.
A granular depiction of macroeconomic transmission channels, detailing how climate shocks propagate through the real economy.
Consideration of extreme and compound physical events (tail risks), with explicit analysis of their potential to disrupt international value chains and amplify systemic risk.
By addressing these critical dimensions, the NGFS scenarios equip the financial sector with tools to better assess, manage, and respond to climate-related risks over the decisive decade ahead.
At this upcoming webinar, there will be a focused discussion on the methodology behind these scenarios, how their implementation may influence the ECB’s macroeconomic projections, and the ways in which they are expected to inform future research on the valuation of financial assets exposed to climate risk.
