NGFS climate scenarios underestimate the impact of climate change

The Network for the Greening of the Financial Sector (NGFS), the ‘green club’ of central banks, has recently published the latest version of its climate scenarios. These are intended to be used in the financial sector to model the impact of climate change, as well as mitigation efforts to limit its worst effects. However, at the current state of these scenarios, there is a real danger that they give financial institutions a false sense of comfort, leading to too little climate mitigation action. At the Sustainable Finance Lab, we recently responded to the NGFS’ call for feedback on the last vintage of the scenarios. This blog summarizes our feedback and suggestions for improvements.

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