Using NGFS Scenarios in Practice
A practical guide to applying NGFS reference scenarios: variable selection, downscaling, horizon alignment, and common calibration mistakes.
By Jonas Osman Abdelghafour (Jonas Osman) ·
This note covers the practical application of NGFS reference scenarios as it is applied in practice on climate risk modelling engagements — the methodological choices, the data required, and the checks that make results defensible to a board or a supervisor.
Why it matters
Climate risk work fails review far more often on traceability than on mathematics. Documenting the assumptions, data lineage, and limitations of each step is what turns an interesting analysis into a usable input for capital, pricing, and disclosure.
What to look at first
- The scope: which exposures, which hazards, and which horizons the analysis actually covers.
- The data: source, vintage, resolution, and every proxy used where observations are missing.
- The scenarios: reference pathways, calibration date, and how they map to financial impact.
- The governance: who owns the model, who validates it, and how findings are tracked to closure.
Detailed guidance for this entry is being expanded. The methodology summary above reflects the approach used across the engagements described in the pillar pages.