Sara Capnik started her career as an investment banking analyst in 2004 Goldman SachsHe was killed almost immediately by the overlap of financial development and climate change and the lack of customer advisor around that subject.
Integrating both, he thought, will help investors understand both risk and opportunities, and will help them use climate information in finance and business operations. With a degree in theoretical mathematics and geophysical fluid dynamics, Capnik himself deployed himself to take that challenge.
But first, he had to go deep into science.
This inspired him to study more and again National Oceanic and Atmospheric Administration (Noaa), the nation’s scientific and regulatory agency within the US Department of Commerce. Its defined mission is to understand and predict changes in climate, weather, oceans and coasts and share that knowledge and information with others.
In 2022, Capnik was appointed as the chief scientist of NOAA. Two years later, JPMorgan Chase It was overcome, but not as the main stability officer, a common role in most large investment banks around the world and already stuffed in JP Morgan.
Instead, Capnic JP is Morgan’s global major climatic advisor, a unique job that he brought back in 2004.
A few days before the official onset of the North American storm season, CNBC with Kapnik with her office with her office in JPMorgan in JPMorgan talks about her current role in the bank and how she is advising and warning customers.
Here is Q & A:
(This interview is lightly edited for length and clarity.)
Diana Olik, CNBC: Why does JP Morgan need you?
Sara Kapanik, JP Morgan Global Head of Climate Advisory: JP Morgan and banks require climate expertise as the customer demands to understand climate change, understanding how it affects businesses, and understand how to plan. Customers want to understand how to make framework to think about climate change, how to think about it strategically, how to think about it in the context of their operation, how to think about it in the context of their diversification and their long -term business plans.
Everyone got a chief stability officer. You are not so. What is the difference?
The difference is, I come with a deep background in climate science, but also how climate science translates into business, economy. Working in NOAA for most of my careers, NOAA is a science agency, but it is a science agency under the Department of Commerce. And so my job was to understand the future due to physics, but then what does it mean to the economy, be able to translate into it? What does it mean for economic development? What does it mean for economic production, and how do you use that science so that he is able to support the future of commerce? So I have this deep thinking that combines all that science, the thinking of that commerce, that economy, how it translates into national security. And so it wraps all these different issues that people are facing more systematic issues so that they can understand, how do you navigate through that complexity, and then how do you move forward with all that information?
Give us an example, at a grassroots level, what some of that expertise for investors.
There is a customer who is concerned about the future of the risk of wildfire, and therefore they are asking how the risk of forest fire is coming out? Why is it not in the building code? How to change building code in future? What happens for that? What type of modeling is used for him, what type of comments are used for him? So I can explain them where the data is? How to use data in decisions, where do the rules come from. How are they developing? How can they develop in the future? Therefore, we can see through different uncertainty of different scenarios of the world to decide what the world looks like to be able to prepare for it now, or to be able to make that preparation change over time, more information is known as more information as uncertainty to change that preparation over time.
So are they taking investment decisions based on your information?
Yes, they are making investment decisions. And they are deciding when to invest because sometimes they have knowledge of something because it is beginning to develop. They either want to work early or they want to act as more information, but they want to know the entire area of what possibilities and when information will be known or when it will be known, and there are conditions that they will know more information, so they can find out when they want to work, when that threshold of information needs to work.
How is their decision on their investment informed, especially on forest fire?
Because the risk of wildfire is increasing, there have been some incidents such as Los Angeles Wildfire that was recently seen. Can I be in my place? when will it be? Will I have advanced notice? How should I change and invest in my infrastructure? How should I think about the difference in the construction of my infrastructure, the construction of my infrastructure? Should I think about insurance, different types of insurance? How should I reach capital markets to do this type of work? It is trying to find out how to reduce vulnerability, how to reduce the financial risk, but still, if there are risks at this one place, there are probably more opportunities in these other places which are safe, and I should also think about them. It is as overall as thinking and what to do about it through risk management and risk, but then also wondering what opportunities can emerge as a result of this change in physical conditions in the world.
But you are not an economist. Do you work with others in JP Morgan?
Yes, my work is very partner. I work in various teams with subject experts from different fields, various industries, different industries, different parts of capital, and so I come with my expertise of science and technology and policy and security, and then work with them that whatever the field they are in the field, they are able to distribute the bank the most that we can do for our customers.
With the Trump administration’s noaa, fema, all information collecting sources – we are not seeing some things that we normally see in data. How is this affecting your work?
I see what is available for whatever issue we need for the issue. I would say that if the data is no longer available, we will translate and go to other data sets, use other data sets, and I am starting looking at development in parts of the private sector to draw data that were available elsewhere. I think we are going to see this adjustment period, where people who find the data need to answer questions they have. There will be more opportunities. There are a tonne startups that are developing in that area, as well as more adequate companies, some of which are data sets. They are starting to provide them, but this adjustment is going to be the period because people find out where they are going to get information, as many market decisions or financial decisions are based on some data sets that people thought would always be.
But government data was considered to be the top, irrefutable, best data. Now, how do we know, when we go to the private sector, this data is going to be reliable as government data?
There is going to be an adjustment period because people find out who the data trusts and does not trust, and what they want to use. This is a time where adjustment is going to happen because there is something that has a habit of working with everyone, now they will not have the same. And this is a question that I am getting from a lot of customers, which data set should I look for? How should I assess this problem? Do I create in-house teams that are now able to assess this information that I did not have before? And I am starting to see that it happens in different fields, where people are growing rapidly to help their own meteorologists, their own climologists, some of these decisions to be able to help to guide through some of these decisions.
final thoughts?
Climate change is not something that is going to happen in the future and affects the future in future. This is something that is the risk of the future that is actually finding us in the bottom line today.
