2.1.3 What are climate scenarios?

The IPCC develops climate scenarios to explore the potential impacts of climate change on a global scale. These scenarios are based on various Representative Concentration Pathways (RCPs) and Shared Socioeconomic Pathways (SSPs), which describe different levels of GHG concentration and socioeconomic development. In 2017, the Network for Greening the Financial System (NGFS) was founded to develop climate scenarios that could be used to quantitatively assess the impact of climate change on the financial sector. The developed scenarios follow a long line of research on climate change and potential future developments and impacts. They are commonly referred to as NGFS scenarios and provide a framework for financial institutions to assess climate-related risks.