A recent survey conducted by KPMG in Canada revealed that 92 percent of Canadian business leaders are concerned that extreme weather events over the past year represent a new normal, and they fear their organizations will be affected by a climate-related event this year.
The survey of business leaders found that more than half of the companies experienced a negative impact on profitability due to last year's extreme weather, with 49 percent seeing significant cost increases related to productivity loss, supply chain disruptions, and higher insurance costs.
Roopa Davé, KPMG in Canada's national climate risk leader, highlighted the economic toll of climate change, stating, "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. 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."
According to the survey, 92 percent of Canadian businesses expect extreme weather events to occur regularly. Among these businesses, 21 percent are "extremely" concerned, 46 percent are "very" concerned, and 25 percent are "slightly" concerned about being hit by a climate-related event this year. Additionally, 56 percent of companies reported a hit to profitability from last year's weather events. In comparison, 49 percent faced significant cost increases, 41 percent experienced revenue losses, 57 percent had operations directly impacted, and 50 percent reported productivity losses due to employee disruptions.
The survey also found that 47 percent of companies experienced supply chain disruptions, and 30 percent faced increased insurance costs or cancellations. Despite these challenges, 89 percent of business leaders are strongly determined to reduce their environmental impact, with 88 percent willing to make additional investments to support their climate-related goals.
Doron Telem, partner and national ESG leader for KPMG in Canada, noted the commitment to sustainability but acknowledged the obstacles companies face. "Companies have strengthened their commitment to addressing sustainability and are willing to make more investments to deliver on their climate-related goals. However, many are dealing with a number of hurdles, including finding the capacity, collecting required data, and navigating an increasingly complex regulatory environment," Telem said. He also pointed out that only 33 percent of companies have integrated sustainability criteria into their product design, manufacturing process, and supply chain operations.
The survey also revealed that 91 percent of companies have strengthened their strategic commitment to addressing sustainability, climate risk, or decarbonization. However, 80 percent reported lacking the time and resources to prioritize reducing their carbon footprint, and 75 percent said they lacked the necessary data to effectively measure, implement, and evaluate their carbon footprint. Additionally, 89 percent believe regulations are needed to drive industry decarbonization and create a level playing field globally.
KPMG's survey, conducted between June 5 and June 15, included business owners and executive-level decision-makers from 350 Canadian companies.