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Archive » December 2025 » The short-term climate scenarios of NGFS. A new tool for banks and intermediaries

The short-term climate scenarios of NGFS. A new tool for banks and intermediaries

Livio Stracca
December 2025 - n. 12
Keywords: Banche, istituzioni finanziarie, Ngfs, clima
Jel codes: G21, G28, Q54

The «tragedy of the horizon» underscores the difficulty of dealing with long-term risks in systems driven by shortterm priorities. But climate change is not a distant issue: it's an immediate challenge, with extreme weather events, resource shortages and severe disruptions in supply chains. The Network for Greening the Financial System (NGFS) has therefore introduced short-term climate scenarios, an innovative tool that focuses on the next five years (2025- 2030). These scenarios are unique in their ability to model acute risks, such as political changes and extreme weather shocks, integrating sectoral and geographical details. They address immediate vulnerabilities, allowing banks to conduct stress tests, assess risks, and align strategies with regulatory requirements. By bridging short-term and long-term planning, these scenarios are helpful tools for building resilience and promoting sustainable finance.

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