The Central Banks and Supervisors Network for Greening the Financial System (NGFS) has published an update to its Guide on Climate Scenario Analysis. This ‘reflects the significant progress made in the field of climate scenario analysis over the past five years and incorporates best practices in climate scenario design, data, and modeling’.
Aimed at central banks and supervisors, the guide also provides useful background information for all organizations that are carrying out climate resilience work.
The guide is intended as both a practical manual and a ‘living reference’, evolving as methodologies mature and as collective experience grows.
It also considers the difficulties inherent in central banking climate scenario analysis, such as limitations in climate and financial data, the difficulty of calibrating tail risks, and the need to reconcile short-term market dynamics with long-term structural changes.
