9 in 10 Canadian business leaders fear extreme weather events 'new normal'

Employers cite impact on operations, productivity, supply chain, insurance: survey

BY Jim Wilson 18 Jul. 2024

Following the weather events of the past year, Canadian employers are worried similar such events could spell trouble for business once more, according to a report.

Overall, 92% of Canadian business leaders fear these extreme weather events are the new normal and that their organization will be hit by a climate-related event this year, reports KPMG.

Overall, 56% of employers suffered a hit to their profitability from last year's extreme weather events.

Other ways companies were impacted include:

57% had their operations directly impacted (including a loss of power, water supply, communication, and other utilities)
50% reported that employee productivity was directly impacted, that is, lost productivity
47% experienced supply chain disruptions or broken supply chains
30% say their insurance was either cancelled or the "costs increased significantly"

"The extreme weather events of the last couple of years have driven home the cost of climate change to the Canadian economy and the bottom line of individual businesses," says Roopa Davé, KPMG in Canada's national climate risk leader. "Devastating forest fires, floods, hurricanes, and extreme heat have impacted profitability for more than half of Canadian companies. Even those that escaped damage fear they will be hit this year – with over two-thirds being very or extremely concerned."

Nearly six in 10 (59%) Canadian SMBs said they were "directly impacted" by the unprecedented number of extreme weather events in 2023 – ranging from rampaging wildfires, damaging storms, floods, and heat domes, according to a previous KPMG report.

How are employers adapting to extreme weather conditions?

Now, employers are taking action to fight back against the ill effects of extreme weather conditions, according to KPMG’s survey of 350 Canadian companies between June 5 and June 15, 2024.

Nearly nine in 10 (89%) of employers are more determined than ever to find ways to reduce their impact on the environment. And 88% are willing to make more investments to support their climate-related goals.

Many employers have taken the following actions:

91% have strengthened their strategic commitment to addressing sustainability, climate risk, or decarbonization
29% have set specific targets for carbon emission reduction
33% have integrated sustainability criteria into product design, manufacturing process, and/or supply chain operations
42% have invested in renewables

Still, challenges remain.

Four in five (80%) respondents say their company "lacks the time and resources" to make reducing their carbon footprint a "top or immediate" priority.

Three-quarters (75%) say their company also lacks the data that they need to effectively measure, implement, and evaluate their carbon footprint. And 89% believe regulations are needed to drive decarbonization across all industries and create a level playing field globally.

The International Labour Organization (ILO) previously released findings revealing that 70% of the world’s workers are going to be affected by a “cocktail” of climate-change related hazards.

Despite these challenges, climate change also presents opportunities for businesses, according to David Gervel, real estate specialist at Mauritius Property & Real Estate.

“Companies that innovate and adopt sustainable practices can gain a competitive advantage, attract new customers, and reduce their operating costs,” he says via LinkedIn.