JPMorgan Warns of Climate Finance Setbacks Amid Policy Shifts
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JPMorgan Chase has published the
first instalment of its new climate advisory series, "Climate
Intuition," aiming to help clients assess financial risks associated with
climate change.
The report, led by Sarah Kapnick,
JPMorgan’s global head of climate advisory, warns that while climate
investments have grown, shifting leadership, economic uncertainty, and
technological stagnation have stalled real progress.
Kapnick highlights rising global
temperatures, increasing greenhouse gas emissions, and volatility in insurance
markets due to climate-driven disasters as key trends shaping what she calls a
“new climate era.”
The report comes as major political
changes threaten climate policy momentum. Following President Donald Trump’s
return to office on January 20, his administration quickly moved to withdraw
the U.S. from the Paris Agreement, halt wind power development, and suspend
funding for climate-focused initiatives.
Kapnick warns that these reversals
could push global warming to 2.7 degrees Celsius, exceeding the Paris
Agreement’s target of staying below 2 degrees Celsius.
She stresses that companies must
accelerate emissions reductions and carbon removal investments or prepare for
the economic and societal costs of worsening climate impacts.
Extreme weather events,
infrastructure damage, and shifting consumer preferences for sustainable
products present additional challenges for businesses.
Kapnick cautions that corporations
failing to integrate climate risk into financial planning may face higher
costs, disrupted supply chains, and competitive disadvantages.
Despite the setbacks, she remains
optimistic that innovation in climate technology can help mitigate long-term
risks, provided companies adapt and make informed, proactive decisions.
JPMorgan executives, including Chief
Risk Officer Ashley Bacon and Global Head of Corporate Advisory Rama
Variankaval, emphasize the growing financial relevance of climate risk in their
foreword to the report.
They highlight Kapnick’s expertise in climate science and finance, reinforcing the bank’s commitment to equipping clients with the knowledge needed to navigate the evolving sustainability landscape.