The NGFS's Surgisphere Moment
In December 2025, Nature retracted the key study underpinning the NGFS Phase V climate scenarios1. The retraction revealed that global banking capital requirements — the cost of borrowing — were partially calibrated on a spreadsheet error regarding Uzbekistan’s GDP — a data artifact showing a 90% drop.
This error was not caught by the ‘independent’ scientific review but by external auditors, exposing a closed-loop governance system where the same philanthropic entities (Bloomberg/ClimateWorks) fund the science, the disclosure frameworks, and the regulatory policy bodies.
As regulators pivot from these flawed economic models to digital twin simulations (Project Danu23), the architecture is moving toward greater opacity, just as the validation mechanisms are proven broken.
The Scientific Advisory Committee
In December 2025, the Network for Greening the Financial System announced the creation of an ‘independent scientific advisory committee’ to oversee its climate scenario production. The announcement came on the same day that Nature retracted the key paper underpinning the damage estimates in the network’s Phase V scenarios.
The paper4 — by Maximilian Kotz and colleagues at the Potsdam Institute for Climate Impact Research — had projected that climate change would reduce global income by nineteen per cent by 2050 — a figure the NGFS translated into scenario ranges of seven to fifteen per cent GDP loss under different policy pathways.
Banks and regulators across the world had already incorporated these figures into their stress tests.
The retraction notice stated that the results were ‘found to be sensitive to the removal of one country, Uzbekistan, where inaccuracies were noted in the underlying economic data for the period 1995–1999’. According to the dataset, Uzbekistan’s GDP in 2000 had abruptly fallen by nearly ninety per cent, with similarly extreme swings in subsequent years.
These anomalies — which bore no relation to World Bank figures showing modest growth of between minus 0.2 and plus 7.7 per cent over the same period — were so extreme that they skewed the underlying model linking temperature changes to economic output. When Uzbekistan was removed, the estimates aligned closely with previous literature.
Yet, the scenarios continued operating with disclaimers attached.
Global banking capital requirements had been calibrated, in part, by a significant spreadsheet error regarding Uzbekistan.
Origins
The architecture traces its origins to December 2015, when Mark Carney, then Governor of the Bank of England and Chair of the Financial Stability Board, established the Task Force on Climate-related Financial Disclosures5. In a speech titled ‘Breaking the Tragedy of the Horizon’6, Carney argued that climate risks fell outside the planning horizons of monetary policy, fiscal policy, and business cycles, creating a market failure that disclosure requirements could address. He appointed Michael Bloomberg to chair the industry-led body7.
The TCFD’s 2017 recommendations8 — emphasising scenario analysis to assess climate risk — became the template that subsequent initiatives operationalised. At the Paris One Planet Summit in December 2017, the Banque de France launched the Network for Greening the Financial System with eight founding central banks9. The NGFS explicitly encouraged companies to disclose climate risks in line with TCFD recommendations.
Bloomberg Philanthropies subsequently funded the development of the scenarios that NGFS members use to conduct stress tests10. The philanthropic funder of the scenarios and the chairman of the disclosure framework that created demand for those scenarios are the same entity.
In October 2023, the TCFD disbanded. The Financial Stability Board announced that the ISSB Standards11 — IFRS S1 and IFRS S2, which fully incorporate the TCFD recommendations — marked ‘the culmination of the work of the TCFD’12. The IFRS Foundation, which oversees the International Sustainability Standards Board, assumed the TCFD’s monitoring responsibilities from January 202413.
The Carney-Bloomberg disclosure framework has thus become the de facto global standard, embedded in the accounting infrastructure that governs corporate reporting worldwide. In March 2025, Carney was sworn in as Prime Minister of Canada14.
The architect of this disclosure framework now leads a G7 government.
The Modelling Hub
At the centre of the scenario production architecture sits the International Institute for Applied Systems Analysis, an intergovernmental research organisation based in Laxenburg, Austria. Founded in 1972 as a vehicle for Cold War scientific cooperation between East and West15, IIASA has evolved into the principal host of scenario databases for international climate and environmental policy16.
The institute maintains the Shared Socioeconomic Pathways17 database used by the Intergovernmental Panel on Climate Change, the scenario infrastructure for the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services18, and the Scenario Explorer that distributes NGFS climate scenarios to central banks worldwide19.
IIASA’s primary partner in scenario production is the Potsdam Institute for Climate Impact Research20, the German institution that produced the now-retracted Kotz paper. Together with researchers from the University of Maryland, Climate Analytics, and the National Institute of Economic and Social Research, these institutions form the consortium that delivers scenarios to the NGFS under what the network’s own documentation describes in procurement terms: deliverables, requirements, and timelines.
The consortium’s work is funded by Bloomberg Philanthropies and the ClimateWorks Foundation, a philanthropy established in 200821 that has granted over two billion dollars to climate-related initiatives across fifty countries22.
The same integrated assessment models appear throughout. REMIND-MAgPIE23, developed at Potsdam, produces scenarios for both the IPCC and the NGFS. MESSAGEix-GLOBIOM24, IIASA’s flagship model, serves the same dual function. Researchers who develop scenarios for IPCC assessments also produce scenarios for central bank stress tests, and contribute to IPBES assessments on biodiversity loss.
The Philanthropic Thread
The funding connections extend beyond scenario production. The Integrated Assessment Modelling Consortium25, established in 2007 at the IPCC’s request to coordinate scenario development, maintains an Advisory Council that provides guidance on research priorities.
Dr Surabi Menon26, Vice President of Global Intelligence at ClimateWorks Foundation27, serves on this council. ClimateWorks holds a seat on the body that organises scenario production for the IPCC while simultaneously funding the consortium that produces scenarios for the NGFS.
A parallel network reinforces these connections. INSPIRE — the International Network for Sustainable Financial Policy Insights, Research, and Exchange — is a designated research stakeholder of the NGFS. Its secretariat is co-hosted by the Grantham Research Institute at the London School of Economics and the ClimateWorks Foundation28.
INSPIRE’s co-chairs are Nick Robins of the Grantham Institute and Ilmi Granoff, Senior Director at ClimateWorks29.
The Biodiversity Track
The NGFS-INSPIRE Study Group on Biodiversity and Financial Stability30, established in April 2021, comprised 103 individuals from 25 NGFS members and observers and 28 academic institutions. It was co-chaired by Dr Ma Jun, Chair of the NGFS Research Workstream and Special Advisor to the Governor of the People’s Bank of China, and Professor Nick Robins of the Grantham Institute. The Study Group’s research led directly to the creation of the NGFS Task Force on Nature31, announced in March 2022 alongside the NGFS Statement on Nature-related Financial Risks32.
This documents a funding pathway for biodiversity-related financial policy distinct from the IPBES track.
ClimateWorks co-hosts the research network (INSPIRE) that produced the analysis (Study Group report) that led to the policy body (NGFS Task Force Nature) that will produce guidance for central banks on nature-related financial risks.
Three Tracks from One Source
The scenarios flow outward along three distinct tracks.
The first leads to the IPCC, the scientific body established to inform the United Nations Framework Convention on Climate Change. IPCC assessment reports, which draw on the scenario databases hosted at IIASA, provide the scientific foundation for negotiations under the UNFCCC.
These negotiations produced the Paris Agreement in 2015, under which nations submit Nationally Determined Contributions33 specifying their emissions reduction commitments. The scenarios define the policy-relevant pathways; the treaty process translates these into binding national obligations; domestic legislation follows.
The second track runs through IPBES, the biodiversity equivalent of the IPCC. IIASA researchers hold lead author positions on multiple IPBES assessments and contribute to the Nature Futures Framework34, the platform’s scenario methodology. IPBES assessments inform the Convention on Biological Diversity, whose fifteenth Conference of Parties adopted the Kunming-Montreal Global Biodiversity Framework in December 2022.
This framework commits signatory nations to protect thirty per cent of land and ocean areas by 2030 and to align financial flows with biodiversity objectives35. The scenarios produced at IIASA and its partner institutions provide the evidentiary basis that treaty negotiators cite as the best available science. The NGFS-INSPIRE biodiversity track reinforces this by producing parallel guidance for central banks36.
The third track is financial. The NGFS, comprising over one hundred and forty central banks and financial supervisors, uses scenarios produced by the IIASA-Potsdam consortium to develop guidance on climate-related financial risk.
This guidance shapes the work of the Basel Committee on Banking Supervision, whose secretariat is hosted by the Bank for International Settlements in Basel. The Basel Committee sets the capital adequacy standards that determine how much capital banks must hold against various categories of risk.
Under the Basel 3.1 framework, climate risk is incorporated into these calculations. Banks holding assets deemed climate-risky face higher capital requirements, making lending to certain sectors more expensive or even commercially unviable.
The Bank for International Settlements
The Bank for International Settlements occupies a distinctive position in this architecture. The BIS hosts the Basel Committee secretariat and an Innovation Hub37 that has made green finance one of its strategic priorities.
The Hub’s project portfolio includes several initiatives directly connected to climate risk assessment. Project Viridis38 uses NGFS scenarios for forward-looking risk assessments. The NGFS Data Directory 2.039 is an explicit collaboration between the Innovation Hub, the Monetary Authority of Singapore, the Banque de France, and the NGFS itself. Project Gaia40 applies artificial intelligence to extract climate-related financial risk data.
In September 2025, the BIS Innovation Hub launched Project Danu41, a collaboration between its Eurosystem, Hong Kong, and Singapore centres. The project uses digital twin technology to monitor emerging risks to financial stability, with an initial focus on extreme weather events and natural catastrophe risks.
The announcement noted that a major challenge in assessing such risks is the lack of sufficient data, methodologies, and tools to quantify the financial impact.
The Kotz paper dealt with chronic risks — the gradual effects of temperature changes on economic productivity. Project Danu focuses on acute risks — discrete extreme weather events simulated through digital twins. The shift from econometric projection (Kotz) to real-time simulation (Danu) represents a methodological pivot, potentially making the outputs harder for outsiders to audit than peer-reviewed academic papers.
Project Danu was announced nine months after the Kotz paper came under sustained academic criticism, and three months before its retraction.
The project’s stated purpose — developing data and methodologies to quantify physical risk impacts — addresses the gap that the retraction exposed.
The Committee to Watch
The scientific advisory committee announced in December 2025 was described as newly established and independent, with a mandate to inform upcoming iterations of the network’s scenarios. Phase VI is scheduled for November 2026. Beyond this single sentence, no information has been published. The committee does not appear on the NGFS governance page, updated on 27 January 2026. No members have been named. No terms of reference have been released. No input sources have been specified.
If the architecture follows the pattern established elsewhere in this system, the committee sits between risk identification and scenario production. It validates what counts as ‘acceptable’ science before that science enters the modelling pipeline. The IIASA-Potsdam consortium then models scenarios incorporating the validated science. The scenarios flow outward to IPCC, IPBES, and the NGFS, and onward to treaties and banking regulation.
The composition of this committee will determine its function. If its members are drawn from institutions outside the existing IIASA-Potsdam-Climate Analytics network, it functions as a check on the quality of science entering the regulatory pipeline. If its members come from within that network, the scientific community validates its own outputs before they become regulatory inputs.
The question that will clarify the committee’s independence: Will any members of the INSPIRE Advisory Council, or any ClimateWorks-affiliated scientists, sit on this ‘Independent’ Scientific Advisory Committee?
The Kotz episode demonstrated that the existing architecture lacks correction mechanisms: when the underlying science failed peer review, the scenarios continued operating with disclaimers rather than being withdrawn.
From Scenarios to Transactions
The architecture does not stop at banking regulation. Central bank digital currencies, now in active pilot programmes across one hundred and thirty-four countries, introduce programmable money. The technology exists to make transactions conditional on compliance with policy objectives.
In China, the People’s Bank of China’s digital yuan pilot has been explicitly linked to green finance objectives42. In October 2023, a company in Guangdong Province received a digital yuan ‘green loan’ of over $276,000 disbursed directly to its corporate digital yuan wallet43. Industry observers noted that the application of digital yuan in green finance allows banks to exercise ‘precise control over the flow of funds’ and ‘ensure the authenticity and credibility of the closed-loop circulation of green financial funds’.
Giesecke+Devrient, a leading provider of central bank currency technology, markets a product called Filia that enables smart wallets with pre-defined conditions44. Among the use cases it advertises are green wallets to incentivise purchase of goods that fulfil sustainability criteria.
The EU Taxonomy Regulation of 2020 provides the definitional framework for what qualifies as ‘environmentally sustainable’45. Article 26 of the regulation states that further guidance on activities contributing to other sustainability objectives, including social objectives, might be developed at a later stage.
The infrastructure is designed for expansion beyond environmental criteria.
The complete chain runs from risk identification through scientific validation through scenario modelling through assessment bodies through treaty negotiations through banking regulation and potentially through to individual transactions. At the base sits the individual, whose access to finance and purchasing choices could be shaped by definitions established at the top.
The bodies in between, including sovereign governments and elected legislatures, function as transmission mechanisms implementing frameworks designed elsewhere.
The Funding Structure
The funding flows through distinct channels:
Philanthropic funding (Bloomberg Philanthropies, ClimateWorks Foundation) flows to:
IIASA/PIK consortium for NGFS scenario production
INSPIRE network for NGFS research support
IAMC Advisory Council participation (ClimateWorks: Dr Surabi Menon)
Central bank contributions flow to:
BIS Innovation Hub for risk identification projects (Danu, Viridis, Gaia)
NGFS Secretariat operations (hosted by Banque de France)
Scientific Advisory Committee funding source: Unknown
The Structure
The documented relationships run as follows. Solid lines indicate explicit documentation; dashed lines indicate structural inference.
The BIS Innovation Hub explicitly collaborates with the NGFS on multiple projects. Whether Project Danu specifically feeds into the Scientific Advisory Committee is inference based on functional alignment and timing, not yet documented connection.
What This Architecture Creates
Three features of this system merit attention:
Single point of failure. The dependence on one modelling consortium creates systemic risk. The Kotz episode — in which erroneous data from Uzbekistan propagated through global banking stress tests before correction — demonstrates that the system lacks rapid error-correction mechanisms. When the science failed, the response was disclaimers, not withdrawal — leaving global capital buffers calibrated to a known error.
Accountability gap. Policy with significant societal impact is being shaped by actors — philanthropists, central bankers, a specific scientific network — several steps removed from electoral accountability. The NGFS is a voluntary association; the IIASA/PIK consortium is philanthropically funded; the IAMC Advisory Council includes representatives of the funders. The chain from scenario to legislation passes through multiple bodies, none of which individually appears to exercise decisive control, yet which collectively produce binding outcomes.
Designed for expansion. The infrastructure is explicitly designed to extend beyond climate. The NGFS-INSPIRE Study Group on Biodiversity has already produced the research basis for nature-related financial regulation46. The EU Taxonomy Regulation contemplates extension to ‘social objectives’. Programmable money pilots are operational. The architecture is not static; it is a platform.
The Question
The models that will shape economies, laws, and wallets for the next decade are being prepared now. The committee that will validate their science meets in private. Its members are unknown. Had the NGFS not mentioned it in a single sentence in December, we would not know it existed.
The scientific advisory committee’s membership, terms of reference, and input sources will become visible as Phase VI approaches in late 2026. Whether it draws from institutions outside the IIASA-Potsdam-Climate Analytics network, or represents that network validating its own outputs, will determine whether ‘independent’ is a description or a label.
The architecture connecting scenario modelling to mortgage rates and potentially to individual purchases is built.
The question is who operates it.
Postscript
I suddenly realise the same statement carries a disclaimer which states that neither the NGFS, nor its member institutions, nor any person acting on their behalf, is responsible or liable for any reliance on the scenarios or their outputs… yet these scenarios directly calibrate the capital requirements that determine your borrowing costs!!!!!
… while the NGFS climate scenarios are certainly a helpful tool, they do not alleviate the responsibility of users, including banks…
Ie ‘we define the parameters, you take the blame’.
Furthermore, The Bank Policy Institute documented flaws that produced implausibly large economic damage estimates — in late 202447! Yet, the NGFS adopted it anyway for Phase V, released in late 2024. And of course — when the paper was retracted a year later, the scenarios continued operating, but now with disclaimers attached.
This is the pattern. Produce outputs with binding economic effect. Refuse responsibility. Consequences without accountability — soft law that shapes interest rates, even eventually payment permissions — yet they answer to no one when the underlying science fails.
Clearly the pattern observed in ‘climate science’ during the 70s is replicated here. Policy goes first, then they fabricate the ‘science’ to match it.
It smells just a tad like systemic fraud at the highest levels of finance.
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Missing yet key detail regarding the lack of transparency: transparency would not help one bit even if complete when it comes to the EU Taxonomy. No one either promoting or criticizing it appears to have even deigned to read the damn thing. For it they did, they may have noticed there is something very, very wrong with it. Not because of agendas (although those definitely exist) but simply because of lack of elementary correlation with anything resembling reality. The EU Taxonomy is completely unworkable in real life: a veritable Kafkaesque nightmare of bureaucratic complication and sheer ineptitude. Psychiatry-grade stuff. Super specific yet utterly unstandardized and therefore statistically useless. It underwent complete conceptual pre-enshittification already while being written. Have a nagging feeling that the "Uzbekistan detail" is the rule, not the exception when it comes to the EU Taxonomy: there are literally thousands of such examples. Those in control have no idea what they are even doing there, which somehow seems scarier than everything being controlled logically, if nastily and criminally. Green emperor has no clothes!
The ultimate greening of the financial system: Shut down the data centers and go back to sovereign precious metal backed cash and hard copy telex transfers. Meow.