Network for Greening the Financial System (NGFS)

📗 Today the NGFS has published the fifth vintage of its long-term climate scenarios. It contains an updated set of scenarios on the macro-financial impacts of climate change and of the transition policies needed to mitigate it. Phase V NGFS scenarios strengthen and confirm the results from previous vintages. A coordinated transition will be less costly than disorderly or no action in the long run. Limiting the temperature increase to 1.5 °C above pre-industrial levels in an orderly fashion is achievable, though it will require substantially more efforts. The NGFS scenarios have been updated with new economic and climate data as well as latest policy commitments. The scenarios account for the latest GDP and population projections, as well as the most recent country-level climate commitments. The main development is an updated assessment of climate physical risk, leading to significantly higher estimated impacts. This is due to the implementation of a new damage function leveraging on latest scientific methodologies and climate models. We also published three enclosed documents providing further information on the NGFS scenarios: a high-level overview on the updates, an explanatory note on the new damage function as well as an updated technical documentation. Curious to learn more? 🔹 We invite you to discover the new vintage of the NGFS scenarios during our online launch event on 8th November, 1pm CET. Register to the event: https://lnkd.in/e53n5tGy 🔹 Find the press release here: https://lnkd.in/eFhgqaHX 🔹 Read the full publication including our comprehensive slide deck here: https://lnkd.in/e2C88aPF The NGFS thanks all contributing partners for their great work: PIK - Potsdam Institute for Climate Impact Research, International Institute for Applied Systems Analysis (IIASA), University of Maryland, Pacific Northwest National Laboratory, Climate Analytics, National Institute of Economic and Social Research (NIESR), European Central Bank, Livio Stracca. #climatechange #centralbanking #macromodelling #economy #NGFS 

On 9 November, central bank governors will gather at the #GreenSwanConference to discuss the implications of climate change for the real economy and central banks. The closing panel will host a captivating discussion between Banque de France Governor François Villeroy de Galhau, Bank of Japan Governor Kazuo Ueda, Banco de España Governor José Luis Escrivá and European Central Bank President Christine Lagarde. The panel will be chaired by BIS Deputy General Manager Andrea M Maechler. To see the full programme, visit our website – https://lnkd.in/e5E3jufG The conference will be fully livestreamed and session recordings will be available after the event.

🌍 #COP16 concludes, #COP29 approaches: the NGFS Cali-Baku Pledge to Enable Action in focus As COP16 wraps up and we look ahead to COP29, the NGFS #CaliBakuPledge underscores the NGFS' commitment to addressing the intertwined challenges of climate change, biodiversity loss, and nature degradation. The NGFS pledges: ➡ to continue enhancing the capacity of the financial system to handle climate and nature-related risks ➡ to enable action beyond its membership, by providing relevant knowledge and tools.   🔍 The NGFS’ workstreams and taskforces play a crucial role in this effort, enhancing the financial system’s ability to manage risks and mobilise capital for green and low-carbon investments. These include workstreams on #Supervision, #ScenarioDesignandAnalysis, #MonetaryPolicy, and #NetZeroforCentralBanks, alongside taskforces focused on #NatureRelatedRisks, #CapacityBuilding, and #Adaptation. Each contributes to the broader goal of aligning financial flows with the #ParisAgreement, the #GlobalBiodiversityFramework, and advancing environmentally sustainable development. 📊 As highlighted by Sabine Mauderer, Fundi Tshazibana and Yann Marin below, #CentralBanks and #FinancialSupervisors can help the financial system drive the green transition and contribute to a more resilient global economy. 🔗 Read more about the Cali-Baku Pledge here: https://lnkd.in/eNfKs2QG   Thanks to those leading the NGFS workstreams and taskforces for their continued efforts! Donald Chen (Hong Kong Monetary Authority (HKMA)) | Livio Stracca (European Central Bank) | james talbot (Bank of England) | Paolo Angelini (Banca d'Italia) | Simone Robbers (Reserve Bank of New Zealand) | Emmanuelle Assouan (Banque de France) | Marc Reinke (De Nederlandsche Bank) | Madelena Mohamed (Bank Negara Malaysia) | Jeffery Yong (Bank for International Settlements – BIS) | Shelagh Kahonda (National Bank of Rwanda (NBR) | Sean Carmody (Australian Prudential Regulation Authority) | Deutsche Bundesbank | South African Reserve Bank

📢 The NGFS is organizing a virtual outreach event on 8th November to present the upcoming release (Phase V) of its long-term climate scenarios. It will contain an updated set of scenarios on the macro-financial impacts of climate change and of the transition policies needed to mitigate it. Do not miss this opportunity to join the session! 👉 Register here: https://lnkd.in/e53n5tGy

🎙 “The Banco de la República is firmly committed to developing research aimed at identifying the economic and financial risks of climate change and contributing to raising knowledge about its effects on the Colombian economy. We are confident that this way we contribute to the discussions on the appropriate design of a climate public policy in Colombia.” If you want to learn more about the Banco de la Republica’s involvement with the #NGFS, take a look at our latest interview with Joaquin Bernal, Advisor to the Governor at the Banco de la República - Colombia. ➡️ Read more: https://lnkd.in/eST_p65y

🌱 𝐂𝐥𝐢𝐦𝐚𝐭𝐞 𝐜𝐡𝐚𝐧𝐠𝐞, 𝐭𝐡𝐞 𝐦𝐚𝐜𝐫𝐨𝐞𝐜𝐨𝐧𝐨𝐦𝐲 𝐚𝐧𝐝 𝐦𝐨𝐧𝐞𝐭𝐚𝐫𝐲 𝐩𝐨𝐥𝐢𝐜𝐲 As #climatechange and the transition to #netzero increasingly have macroeconomic impacts over time horizons relevant for monetary policymakers, it is crucial for #centralbanks to better understand these impacts and thoroughly assess their implications for #monetarypolicy.   📗 In response, the Network for Greening the Financial System (NGFS) has today published a report on climate change, the macroeconomy and monetary policy, which consolidates the key messages from its recent trio of publications that focused on how 𝐚𝐜𝐮𝐭𝐞 𝐩𝐡𝐲𝐬𝐢𝐜𝐚𝐥 𝐡𝐚𝐳𝐚𝐫𝐝𝐬 and the 𝐠𝐫𝐞𝐞𝐧 𝐭𝐫𝐚𝐧𝐬𝐢𝐭𝐢𝐨𝐧 impact variables such as output and inflation, while also providing guidance on how to embed climate considerations within central banks' 𝐦𝐚𝐜𝐫𝐨𝐞𝐜𝐨𝐧𝐨𝐦𝐢𝐜 𝐦𝐨𝐝𝐞𝐥𝐥𝐢𝐧𝐠 frameworks. This work will serve as a foundation for further analysis to assess the implications of climate change for monetary policy.   Some of the key takeaways of this work include:   ⛈ Extreme weather events tend to result in increased volatility and lower output in the short run, while the impact on inflation will depend on how supply and demand are affected and the response of monetary policy. While monetary policy has so far typically looked through the first-round effects of such events, as the trade-offs become more persistent – for example because of repeated and more extreme events – doing so may become more challenging.   🌳 Climate transition policies vary in their macroeconomic impact, with some materialising similarly to negative supply shocks, while others may present similarly to demand shocks, requiring different considerations for the response of monetary policy. Moreover, how policies are implemented will also have macroeconomic implications. Climate change and the transition may also impact the long-run equilibrium real interest rate (R*).   📊 Central banks have been developing their analytical toolkits to understand the macroeconomic impacts from climate change and the transition. Even if accuracy can be challenging to achieve given the many uncertainties, we cannot let the best be enemy of the good. When it comes to climate change, even though central banks may have different mandates, all are concerned by the need to understand the macroeconomic shocks and forces shaping their economies (which are likely to differ across jurisdictions).   🔎 𝐂𝐮𝐫𝐢𝐨𝐮𝐬 𝐭𝐨 𝐤𝐧𝐨𝐰 𝐦𝐨𝐫𝐞? The full report is available on the #NGFS website: https://lnkd.in/eB5xR4ua   Read the three reports underpinning this work here: 📕 Acute physical impacts: https://lnkd.in/efeQVyN6 📘 Green transition: https://lnkd.in/enBzzgAa 📙 Macro modelling handbook: https://lnkd.in/eFytwtM3

🌍📢 The NGFS Cali-Baku Pledge to Enable Action is here! The Network for Greening the Financial System (NGFS) is proud to announce the release of the NGFS Cali-Baku Pledge to Enable Action, launched on the occasion of the 2024 #UnitedNations Biodiversity Conference (#COP16) and Climate Change Conference (#COP29). With the NGFS Cali-Baku Pledge, our coalition that brings together 141 #CentralBanks and #FinancialSupervisors and 21 observers reaffirms its commitment to tackling the interrelated challenges of #ClimateChange, #BiodiversityLoss, and #NatureDegradation. In the Cali-Baku Pledge, the NGFS : 🔹 #Recognises the need to consider the economic impacts and financial risks arising from climate change and nature degradation with an integrated approach to fulfil monetary policy and financial stability mandates; 🔹 #Commits to helping its members integrate climate and nature-related financial risks by providing analytical frameworks, tools, and guidance; 🔹 #Invites the broader financial community – including ministries of finance, financial institutions and corporates – to make use of these resources. This pledge aligns with the priorities of both COP16 and COP29, emphasising the importance of #action and #implementation to meet global climate and biodiversity goals. The NGFS will continue to serve as a technical and analytical reference for the integration of these priorities into the financial system, offering valuable resources for all stakeholders. 💼 We invite you to explore the resources mentioned in the #NGFSCaliBakuPledge and join us in greening the financial system! 🔗 More details on the #CaliBakuPledge: https://lnkd.in/eNfKs2QG 🔗 Learn more about the NGFS resources and tools in our annual report: https://lnkd.in/eTPeZ6sa

🌐 Today, the Network for Greening the Financial System (NGFS) published a Climate macroeconomic #modelling handbook, which provides practical guidance for central banks on how to incorporate the impacts of #climatechange on #monetarypolicy into their macromodelling toolkit. Central banks have identified a range of challenges in modelling the impacts from climate change and the transition. Some can be addressed by adapting existing toolkits, but novel approaches may also be required. The #handbook accompanies central banks at various stages of progress in their climate macroeconomic modelling. 💡 While there is no modelling “silver bullet”, the handbook assesses the relative strengths and use cases of different approaches to better account for physical and transition impacts. Curious to know more? ➡ The full report is available on the NGFS’s website: https://lnkd.in/eFytwtM3 📚 This document is the third in a series of reports that are being published by the NGFS on the #macroeconomics of climate change and monetary policy. The first report in this series focused on the acute physical impacts from climate change and monetary policy. The second report, published earlier this week, examined the impacts of the green transition on the macroeconomy  A summary report with the key findings from these three reports will be released on Tuesday next week. So stay tuned! #monetarypolicy #climatechange #centralbank #centralbanking #macromodelling #economy

🌿 NGFS at #COP16 🌿 The Network for Greening the Financial System will be at the UN #Biodiversity Conference in Cali! We are excited to participate in key discussions around aligning finance with biodiversity goals and the role of #centralbanks and #financialsupervisors in addressing nature-related financial risks. 📅 Save the dates! ➡ The NGFS will co-host an event with Finance for Biodiversity on Central banks and supervisors’ actions on nature-related financial risks and transition planning at the #FinanceandBiodiversity pavilion on October 30. ➡ The NGFS Secretary General, Yann Marin, will be speaking at a COP16 #FinanceDay plenary session on the financial system response to the #GBF since COP15. ➡ The NGFS representatives in Cali (Yann Marin, Marc Reinke, Sjoerd van der Zwaag) will be engaging in several more sessions with key partners between October 27 and October 30, including the Taskforce on Nature-related Financial Disclosures (TNFD), European Central Bank, The World Bank, United Nations Environment Programme Finance Initiative (UNEP FI), WWF, and Institute of International Finance. More information on our speaking engagements below! ⬇ #UNCBD #NGFS #FinanceForNature #COP16

What is the impact of climate change on the real economy? What does it mean for business and monetary policy? To answer these questions, a great line-up of speakers awaits you at the #GreenSwanConference on 9 November 2024. Join the livestream and hear what they have to say! The Green Swan Conference is jointly organised by the Bank for International Settlements, the Bank of Japan, the Banco de España and the Network for Greening the Financial System (NGFS). The entire event will be livestreamed on the BIS website and the BIS YouTube channel. After the event, recordings of the sessions will be available as well. More info on the BIS website - https://lnkd.in/e5E3jufG