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    NGFS Seeks Public Feedback on Climate Risk Assessment Scenarios

    February 06, 2023

    The Network for Greening the Financial System (NGFS) launched its first user feedback survey on climate scenarios, with the feedback period ending on February 27, 2023. This survey comes after the publication of the third iteration of climate risk assessment scenarios in September 2022. Scenario users and interested stakeholders from all sectors are encouraged to participate in this online survey.

    NGFS invites suggestions for improvement from a broader community of users beyond the NGFS membership and strives to learn from user experiences as part of its ongoing commitment to creating climate scenarios that can support a large community of users. Thus, scenario users and interested stakeholders from all sectors are encouraged to complete the online survey accessible on the NGFS website. In the Spring, NGFS will release the survey's main conclusions, which will inform the work plan for further developing the scenarios, to ensure their continued relevance. The survey consists of 37 questions, which fall into a few broader sections. The survey collects general information about the participant, while the section that follows is focused addresses how the NGFS scenarios are used for climate scenario analysis exercise. The third section is focused on questions about any challenges that users faced while using or trying to use the NGFS scenarios for climate scenario analysis; this section covers questions on user priorities, key obstacles in using the NGFS scenarios, drawbacks of NGFS scenarios, and variables of the NGFS scenarios, and the usefulness of supporting materials provided by NGFS. 

    NGFS embarked, in 2019, on the journey of climate scenario development to advise policymakers on climate-related risks and to identify potential solutions. Since 2020, the NGFS scenarios have played a fundamental role in exploratory exercises worldwide, supporting policy decisions of central banks and supervisors as well as driving the strategy of an increasing number of private-sector actors. The launch of this user feedback survey is another step to ensure that the NGFS scenarios remain a global public good in the future and follows a few months after the publication of the third version of climate risk scenarios. The third iteration of climate scenarios by NGFS in September 2022 explores a set of six scenarios impacting climate change and climate policy to provide a common reference framework. With this third version, NGFS scenarios had been brought up-to-date with new economic and climate data, policy commitments, and model versions. Each NGFS scenario explores a different set of assumptions on how climate policy, emissions, and temperatures evolve. The scenarios consist of a set of climate-related and macro-financial variables available for each model, scenario, and geography. The NGFS scenarios provide a range of data on transition risks, physical risks, and economic impacts via a suite of coherently aligned models. The scenarios included projections of the potential losses from extreme weather events (in particular, cyclones and river floods), to complement the specific impact of chronic climate changes on the macroeconomy. Hence, NGFS is seeking feedback to guide the scenario development work plan, ensuring that the NGFS scenarios remain relevant and comprehensive for a continuously growing user base.

     

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    Keywords: International, Banking, ESG, Stress Testing, Climate Change Risk, Scenario Analysis, NGFS

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