Canadian firms worried extreme weather will harm their bottom line
The overwhelming majority (92%) of Canadian businesses fear the extreme weather events of the last year are the “new normal” and they will be hit by a climate-related event, according to a recent KPMG survey. The Big Four accountancy polled 350 executives at Canadian companies in June 2024.
The survey found 56% of companies suffered a hit to profitability from last year’s extreme weather, while 49% saw their costs rise due to various factors. These include lost productivity (50%), supply chain disruption (47%), and significant insurance cost increases (30%).
Over half (57%) of Canadian firms said their operations were directly impacted – including a loss of power, water, communication, or other utilities.
“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,” said Roopa Davé, KPMG 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.”
Davé added that companies are starting to treat climate risk like any other enterprise risk and building mitigation strategies. An effective risk assessment, Davé says, included potential impacts on facilities, supply chains, and business models.
The KPMG survey also found that most Canadian firms (89%) are more determined than ever to reduce environmental impact, and 88% are willing to make more investments to support sustainability targets.
Most firms, however, are struggling to drive their sustainability programs. About 80% said their company lacks the time and resources to make carbon reduction an immediate priority, while 75% said their company lacks the data to effectively measure, implement, and evaluate their carbon footprint.
This has slowed decarbonization investments, with only 33% of companies having integrated sustainability criteria into product design, manufacturing process, or supply chain operations.
