Sarah Kapnik started her career as an investment banking analyst in 2004 Goldman Sachs. She immediately struck financial growth and climate change overflow and lack of client’s advice around that subject.
He felt that combining the two, helping investors understand the risks and opportunities and use climate information in financial and business operations. Cupnick, who graduated from theoretical math and Geophysical Fluid Dynamics, looked at her uniquely to take the challenge.
But first, she had to go to the depths of science.
That for her further study and then National Ocean and atmospheric administration (NOAA), a nation’s scientific and regulatory agency within the US Department of Commerce. Its interpreted purpose is to understand the changes on the weather, weather, oceans and coast, and to hire ICT and share that knowledge and information with others.
In 2022, Cupnik was appointed as the chief scientist of the NOAA. Two years later, JP Morgan Chase She kept her away, but not the main sustainability officer, the most common role in the largest investment banks around the world and is already filling in JP Morgan.
Instead, Kapnik is the global head of JP Morgan’s climate advice, a unique task he imagined in 2004.
Just a few days before the official start of the North American hurricane, CNBC spoke with Cupnik about her current role in the bank in JP Morgan in New York and how she was advising and warning her customers.
Here’s a questionnaire:
(This interview is lightly edited for length and clarity.)
Diana Olik, CNBC: Why do you need JP Morgan?
Sarah Kapnik, JP Morgan’s Global Head of Climate Advice: JP Morgan and banks need climate expertise because there is a demand for climate change to understand how it affects businesses and how to plan on how to plan. Customers want to understand how to create frameworks to think about climate change, how to think about it, how to think about it in terms of their operations, their diversity and how to think about it.
Everyone has got a chief sustainability officer. You are not that. What is the difference?
The difference is that I come with a deep background in climatic science, but that weather science translates to business, economy. Most of my career is an NOAA Institute of Science, but it is a science institute under the Department of Commerce. So my job was to understand the future because of physics, but then be able to translate what it means to the economy? What does this mean for economic development? What does it mean for economic production, and how do you use that science to support the future of commerce? So I have this deep idea, which combines all those sciences, that commercial thinking, that economy, how it translates to national security. So it rolls around all these different problems and systemic problems that people are facing now, so they can understand, how do you navigate through that complexity, and then how do you proceed with all that information?
Give us an example of what that expertise does for investors.
There is a client who cares about the future of wildfire risk, and so they are asking, how is the wildfire risk open? Why is it not in construction codes? How can construction codes change in the future? What happens for that? What kind of modeling is used for that, what kind of observations are used for it? So can I explain to them the full flow of where the data is? How data is used in decisions, where the rules come from. How are they evolving? How can they evolve in the future? So we can see through the various uncertainties of the different scenarios of what the world looks like, to make decisions about what to do now, to prepare for it, or be able to move in that preparation over time and more information has been revealed as the uncertainty is reduced and more information has been revealed.
Do they make investment decisions based on your information?
Yes, they are making investment decisions. And they are making decisions about when they want to invest because sometimes they have a knowledge because it is starting to evolve. They want to act early or to act as they know more information, but they want to know the whole field of what are the possibilities and the information, and what are the conditions that they know more information, so they can figure out when they want to work, the limit of the information is to work.
How does it tell their judgment about their investment, specifically the wildfire?
As the risk of wildfire is growing, some incidents, such as Los Angeles wildfire, have recently appeared. Questions I am getting is this what happened in my place? When does it happen? Did I have an advanced notice? How should I change and invest in my infrastructure? How should I think about the differences in my infrastructure, my infrastructure construction? Should I think of insurance, different types of insurance? How should I enter capital markets to do this kind of work? How to reduce impairment, how to reduce financial exposure, but to occur in this one place, there are more opportunities in these places that are safe in these places, and I should be thinking about them. It is comprehensive by the risk management and risk and what to do about it, but then thinks of what opportunities can be emerged as a result of this change in the physical conditions of the world.
But you are not an economist. Do you work with others in JP Morgan to increase it?
Yes, my work is very helpful. I work in different teams with different fields, different industries, different parts of the capital and so I come with my expertise in science and technology and policy and safety, and then work with them, they will be able to deliver more to the bank we can do.
The Trump administration is for NOA, Fema, with a deduction for all information storing sources – we don’t see some things we usually see in the data. How does it affect your work?
I see what we want, what is available for any problem. If the data is no longer available, we will translate and go to other data sets, use other data sets, and I will say that I am starting to see development in some parts of the private sector to pull that type of data available elsewhere. I hope we are going to see this matching period, where people find any data to answer the questions they have. And the opportunities are present. A ton of startups are starting to develop in the area, as well as the most substantial companies with some data sets. They are starting to make them available, but this adjustment period is because people are calculating where they get the information they need, because it is thought that many market decisions or financial decisions are based on certain data sets.
But government data is considered superior, undeniable, best data. Now, when going to the private sector, how do we know that this data will be as reliable as government information?
There is a compatibility period from people to figure out what data should be trusted and what they want to believe and what they want to use. This is an element of time to be adjusted because everyone is used to work, they don’t have it now. And that is the question I get from a lot of customers, what data set should I look for? How should I judge this issue? Do I now build teams inside the house to judge this information I have never had before? And I am starting to see what is happening in different fields, where people have their own meteorologist, their own meteorological, help them guide them through some of these decisions.
Final thoughts?
Climate change is not something to happen in the future and Impact Finance in the future. This is the danger of the future and it is now finding us at the grassroots level today.
