Sarah Kapnick, JPMorgan's Global Head of Climate Advisory, brings a unique blend of scientific expertise and financial acumen to the forefront of climate-related investment and business strategy. Her journey began in 2004 as an investment banking analyst for Goldman Sachs, where she quickly identified a critical overlap between financial growth and climate change, and a corresponding lack of client advisory on this theme. Kapnick envisioned a role that would help investors understand both the inherent risks and emerging opportunities, enabling them to integrate climate information effectively into their finance and business operations.

Possessing a strong academic background in theoretical mathematics and geophysical fluid dynamics, Kapnick furthered her scientific pursuits before joining the National Oceanic and Atmospheric Administration (NOAA). NOAA, a U.S. Department of Commerce agency, is dedicated to understanding and predicting changes in climate, weather, oceans, and coasts, and disseminating this knowledge. In 2022, Kapnick was appointed NOAA's chief scientist. Two years later, JPMorgan Chase recruited her for the pioneering role of Global Head of Climate Advisory, a position she had conceptualized nearly two decades earlier and distinct from the common chief sustainability officer roles found at other large investment banks.

In a recent discussion about her role, Kapnick highlighted that her position at JPMorgan is a direct response to significant client demand. Businesses are increasingly seeking to comprehend how climate change impacts their operations, how to formulate strategic plans, and how to embed climate considerations into their long-term business models, including aspects like diversification. Kapnick's unique contribution stems from her deep background in climate science and her ability to translate this complex scientific knowledge into actionable business and economic insights. "Working at NOAA for most of my career... my job was to understand the future due to physics, but then be able to translate into what does that mean for the economy?" she explained. This holistic perspective allows her to guide clients through the multifaceted issues at the intersection of climate, commerce, and national security.

To illustrate her work, Kapnick provided an example of advising clients concerned about escalating wildfire risk. This involves explaining the dynamics of wildfire risk, the current status and potential evolution of building codes, and the types of modeling and observational data employed in such assessments. "I can explain to them the whole flow of where is the data? How is the data used in decisions, where do regulations come from. How are they evolving? How might they evolve in the future?" she detailed. Such expertise empowers investors to make well-informed decisions regarding the timing and nature of their investments, considering various scenarios and information availability thresholds. Clients frequently pose practical questions about the potential impacts on their specific locations, expected timelines, necessary infrastructure investments, insurance requirements, and strategies for accessing capital markets. The overarching goal is twofold: to mitigate vulnerability and financial exposure, and simultaneously, to identify and capitalize on emerging opportunities in regions that may be less susceptible to these risks.

Kapnick underscored the highly collaborative nature of her work within JPMorgan, where she partners with subject matter experts across diverse sectors, industries, and capital markets. She contributes her specialized knowledge in science, technology, policy, and security to develop comprehensive and tailored solutions for clients. Addressing concerns about potential reductions in government-provided data from agencies like NOAA and FEMA, Kapnick acknowledged an ongoing period of adjustment. While recognizing the historical importance of government data, she pointed to a trend towards utilizing alternative datasets and the rise of private sector entities offering relevant climate and environmental data. "I'm starting to see the development out in certain parts of the private sector to pull in those types of data that used to be available elsewhere," she noted. This transition is prompting clients to re-evaluate their data sourcing strategies and, in some instances, to develop in-house capabilities by hiring meteorologists and climatologists to navigate the evolving information landscape.

The credibility of these new private sector data sources, when compared to traditionally relied-upon government data, remains a significant question for many clients. Kapnick conceded that there will be an "adjustment period as people figure out what data sets to trust and what not to trust." In her concluding remarks, she emphasized a crucial point: climate change is no longer a distant, future threat but a palpable, present-day reality that is directly impacting financial bottom lines. "Climate change isn't something that is going to happen in the future and impact finance in the future. It's something that is a future risk that is now actually finding us in the bottom line today," Kapnick affirmed, stressing the immediate necessity of integrating climate considerations into all financial decision-making processes.