The Financial Services Agency and the Bank of Japan conducted a second scenario analysis of climate-related risks in collaboration with three megabanks, publishing results on June 20, 2025. This analysis follows the first round (conducted August 2022) and primarily aims to identify and improve analytical methodology challenges rather than quantitative assessment of climate-related risks.
This analysis targeted credit impacts (credit risk) on loans and other exposures that significantly affect bank finances, setting original scenarios with additional stress beyond conventional NGFS scenarios. This enabled transition risk analysis over a shorter 7-year period rather than the conventional 30 years, strengthening verification from practical perspectives.
Progress since the first analysis includes enhanced data collection systems, improved modeling capabilities, and expanded scope of analysis covering both physical and transition risks more comprehensively.