Cars are partially underwater in the Don Valley after heavy rain hit Toronto on July 16, 2024. (Photo: The Canadian Press)
A recent survey reveals that a large number of Canadian business leaders are increasingly concerned about the effects of climate change on their operations. According to KPMG's survey of 350 business owners and executives, a staggering 92% fear their companies will be impacted by extreme weather this year. Among them, 67% expressed high levels of concern.
Roopa Davé, KPMG's climate risk leader in Canada, stated, “This has become very real for Canadian businesses.” The survey, released on Wednesday, found that 56% of respondents reported a negative impact on their profits due to extreme weather events last year. These events, which have become more frequent due to climate change, include forest fires, floods, and extreme heat.
Approximately half of the businesses indicated that their operations were directly affected, with similar numbers noting disruptions in worker productivity and supply chains. The survey conducted in June revealed that 88% of companies are open to investing more in climate-related initiatives. However, 80% acknowledged they lack the resources to prioritize reducing emissions.
Davé pointed out that businesses are beginning to treat climate risks as serious as other operational risks. Yet, many are still in the early stages of identifying and assessing these challenges. She emphasized that companies need to understand the direct impacts of extreme weather and what climate change means for their business models. “This poll shows that action is required now; the issue is here today,” she noted.
The survey was carried out from June 5 to 14, with over half of the companies having revenues under $500 million. Importantly, no respondents had revenues below $10 million. One growing concern highlighted in the survey was insurance. About 30% of businesses reported either losing their insurance coverage or experiencing significant cost increases.
The financial burden from extreme weather is mounting. Last year alone, severe weather resulted in over $3.1 billion in insured damages, according to Catastrophe Indices and Quantification Inc. Additionally, the average annual losses from extreme weather increased from $675 million in the previous decade to $2.3 billion between 2011 and 2020, as reported by the Investors for Paris Compliance.
Alongside insurance issues, businesses are facing new policies and other challenges related to climate change. This makes it vital for companies to start preparing with climate risk assessments and other proactive measures. Davé stressed the importance of agility, stating, “Companies must be nimble in the face of these changing circumstances.”
Overall, this survey sheds light on the urgent need for businesses to address climate-related risks. With many organizations already feeling the financial strain, it's clear that climate change is not just a future concern; it’s impacting companies today.
