JPMorgan’s climate scientist thinks differently about risk

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Sep 5, 2025

Sarah Kapnick, the Global Head of Climate Advisory at JPMorgan, is a trailblazer in combining climate science with financial strategy. She discusses the urgent need for businesses to embrace 'climate intuition' to better assess risks that could lead to significant financial losses. Kapnick also highlights the influence of climate resilience on product redesign and investment decisions. Additionally, she addresses the critical data gaps in risk assessments and the importance of proactive adaptation for companies aiming to thrive in a climate-challenged economy.

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ANECDOTE

Skunk Spray As A Risk Metaphor

Stephen Lacey describes being sprayed by a skunk and uses it as a metaphor for complacency on climate risk.
The story illustrates how assuming tomorrow looks like yesterday can produce costly surprises.

INSIGHT

Climate Models Make Some Futures Knowable

Sarah Kapnick explains that climate models reveal some future outcomes are knowable, not purely uncertain.
She argues financial models built only on historical loss will misrepresent future climate risk.

INSIGHT

The New Climate Era In Finance

Kapnick says the last five years show rapid integration of climate specialists into finance and corporate risk teams.
She calls this period the 'new climate era' where unprecedented events reshape risk profiles and decisions.

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In 2004, Dr. Sarah Kapnick was a young banking analyst at Goldman Sachs when she spotted a blind spot: no one was helping clients understand climate risk. Two decades later, she’s the Global Head of Climate Advisory at JPMorgan, turning climate science into boardroom strategy.

Kapnick’s career path — from Wall Street, to NOAA’s chief scientist, and back to finance — mirrors the way markets are evolving: from ignoring climate risk, to struggling with it, to finally beginning to price it.

Without adaptation, large companies could face $1.2 trillion in annual climate-related costs by the 2050s; utilities alone could see $244 billion in yearly losses. But adaptation isn’t just about avoiding losses — it’s also a chance to seize opportunities.

Kapnick calls it climate intuition: the ability to think about climate risk the way we think about interest rates or labor costs.

In this episode, we dig into what that intuition looks like in practice. From infrastructure investors getting serious about resilience to consumer brands redesigning products, is climate finally becoming a normal part of doing business?

Plus, we also look at the deep data gap. Without strong regulation, will companies ever disclose or understand enough of their risks? And with government climate monitoring under threat, how will the private sector step in?

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Credits: Co-hosted by Stephen Lacey, Jigar Shah, and Katherine Hamilton. Produced and edited by Stephen Lacey. Original music and engineering by Sean Marquand.