How extreme weather’s impacting Canadian businesses
Are extreme weather events the new normal in Canada?
Following yesterday’s torrential rains and power cuts, residents of the greater Toronto area (GTA) would say ‘yes,’ as do 92% of Canadian business leaders polled for a new KPMG Canada research report.
“As seen from yesterday’s flooding in the GTA, we won’t always see these extreme weather emergencies coming. Canadian companies must take a proactive approach to assess their insurance needs related to extreme weather and climate change,” Doron Telem, a partner and National ESG Leader for KPMG Canada, tells Canadian Underwriter.
“This involves conducting thorough risk assessments to identify potential climate-related threats and using historical data and climate models to predict future events. Companies should determine the vulnerability of their physical assets and operations to these risks and assess the potential financial impact.”
The KPMG poll also finds that 92% of respondents expressed concerns that their companies would be hit by a climate-related event this year, with 21% saying they’re ‘extremely concerned.’
The survey fielded between June 5 and June 15, 2024, was answered by business owners or C-suite executives at 350 Canadian companies. And fully 30% of respondents note climate-related events led to insurance coverages being cancelled or significant cost increases.
“Reviewing existing insurance policies to ensure adequate coverage for climate-related risks is crucial, and engaging with insurers to discuss specific climate risks can help tailor policies accordingly. Implementing climate resilience measures and documenting these efforts can potentially lower insurance premiums,” Telem adds.
“Regular scenario planning, staying informed about regulatory changes, and engaging with stakeholders are also essential steps. By following these guidelines, companies can better understand their exposure to climate risks and secure appropriate insurance coverage to mitigate potential impacts.”
Additional data
In other poll findings, 57% of KPMG Canada’s survey respondents say climate events directly impacted business operations – including loss of power, water supply, communications connectivity, or other utilities.
What’s more, 56% of respondents say extreme weather events hit their profitability, with 41% seeing revenue losses.
And, 50% of respondents report lost productivity due to impacts from climate events, while 47% say they’ve experienced either supply chain disruptions or broken supply chains.
Feature image by iStock/davidfillion
