Navigating the New Normal: Businesses Investing in Climate Resilience
In light of increasing extreme weather events, businesses are stepping up their efforts to adapt and prepare for the unpredictable future that climate change brings. A recent KPMG survey sheds light on the proactive measures organizations across Canada are employing to mitigate climate-related risks. With over half of the surveyed companies investing in infrastructure modifications, the emphasis on resilience has never been clearer.
Investing in Infrastructure Modifications
According to the survey, 53 percent of organizations are directing funds towards making necessary infrastructure modifications to withstand the impacts of extreme weather. This strategic investment may involve retrofitting existing buildings to enhance heat resistance, embracing adaptive architectural practices, or utilizing permeable materials and green infrastructure aimed at managing stormwater runoff effectively. By doing so, businesses are taking concrete steps to reduce potential flooding and prepare for the uncertainties posed by climate change, as noted by climate expert Ms. Davé.
The Role of Data and Technology
In an era where data is king, nearly 78 percent of business leaders are investing in innovative data analytics and technology solutions to identify, monitor, and mitigate climate risks. Leon Gaber, a partner at KPMG in Canada, underscores the importance of these technologies in today’s climate landscape. He emphasizes that both government and private sectors need to continuously evaluate their emergency management strategies. Companies are harnessing advanced technologies such as artificial intelligence, remote sensors, drones, and digital twins to enhance their forecasting capabilities and operational responses to climate-related events.
Structured Climate Adaptation Plans
The survey reveals a growing awareness among business leaders regarding the need for long-term climate adaptation strategies. An impressive two-thirds of business leaders report having established multi-year climate adaptation plans that outline short-, medium-, and long-term actions tailored to make their operations more resilient. Additionally, 56 percent are collaborating with climate experts to bolster their preparedness and adapt to ongoing climate challenges.
Furthermore, it’s noteworthy that 62 percent of organizations have already performed climate risk assessments to identify potential hazards, and 66 percent of respondents plan to carry out such assessments in the next two years. These proactive measures reflect a commitment to understanding the risks at hand and preparing accordingly.
Immediate Responses to Extreme Weather
Reflecting on the past year, 67 percent of businesses indicated that last year’s extreme weather prompted them to develop specific emergency plans. Moreover, 62 percent reported the establishment of dedicated emergency response teams. This immediate action highlights the increasing recognition of the realities of climate crises and the urgency required in preparedness.
Despite the proactive efforts, economic pressures remain a concern. A significant 68 percent of survey respondents shared that fears of recession, particularly resulting from the U.S.-instigated global trade war, are compelling them to curtail their climate risk investments. Doron Telem, KPMG’s National ESG Leader in Canada, cautions against letting financial pressures divert focus from the critical realities posed by climate change.
Insuring Against Climate Risks
The financial implications of climate-related events are becoming increasingly evident. Statistics Canada reports that payouts from insurers related to catastrophic weather events have escalated dramatically over the past four decades, further emphasizing the necessity for adequate insurance coverage. The KPMG survey found that 63 percent of organizations currently hold insurance for weather impacts, but they are actively seeking to increase their coverage as threats evolve. Strikingly, 31 percent reported that their insurance was canceled due to climate risks, while 32 percent do not have coverage at all, citing costs as a prohibitive factor.
Conclusion
The findings of the KPMG survey illuminate a significant shift in how businesses are addressing the escalating threats posed by climate change. With more organizations taking meaningful steps towards infrastructure modification, data-driven decision-making, and comprehensive risk assessments, the corporate landscape is evolving in response to environmental challenges. As businesses must contend with both immediate concerns and long-term strategies to build resilience, it is evident that adapting to the new normal requires not just acknowledgment but dedicated action.
As organizations navigate these complexities, the proactive implementation of emergency management strategies and investment in adaptive infrastructure will be crucial in mitigating risks and ensuring continuity in an increasingly unpredictable environment.
