Over nine in 10 worry about the vulnerability of urban centres to extreme weather events, with more than two-thirds preparing for the worst, finds new KPMG in Canada research
TORONTO, May 22, 2025 /CNW/ - With wildfire season ramping up in Canada and as the cleanup efforts continue in Los Angeles County four months after wildfires devastated entire communities, new research by KPMG in Canada reveals that more than nine out of 10 (91 percent) Canadian business leaders are concerned about the potential for an urban climate disaster in Canada.
A similar number – 93 per cent – worry their business will be impacted this year by extreme weather, with most saying that their operations were damaged or disrupted last year. Nine in 10 (90 per cent) now factor into their plans an expectation that extreme weather "could – and will – happen at any time" and more than two-thirds (68 per cent) are preparing for a climate-related weather emergency.
"As wildfires rip through parts of Manitoba and northwestern Ontario, and after what we witnessed in L.A., it no longer matters where you live – whether it's in Canada's remote boreal forest or in the middle of a major city – the growing intensity and frequency of extreme weather events makes everyone vulnerable," says Roopa Davé, a Vancouver-based partner and National Climate Risk Leader, KPMG in Canada. "It was heartbreaking to see wildfires across our country two summers ago destroy a total area larger than England, and we all remember the tragedies that unfolded in Jasper, Lytton, Fort McMurray, and Slave Lake, but the large-scale catastrophic destruction in L.A. – the most-populous county in the U.S. with nearly 10 million people – left everyone shaken."
"Our new survey shows a significant trend in concern from CEOs in the two years since we started surveying the impacts of climate change on Canadian businesses. In 2023, they viewed extreme weather as a possible factor in their operational and risk plans. But today it's absolutely a must-plan-for reality. We now see business leaders actively take steps to protect their companies and employees, ranging from updating continuity plans and crisis management protocols to adopting climate-modelling data analysis and tools, retrofitting buildings, investing in renewable energy sources and educating employees on better preparedness and response," she says.
Key Survey Findings:
- 91 per cent of 351 Canadian business leaders say that they are more worried about extreme weather affecting their business operations after the catastrophe in L.A., with over two-thirds (68 per cent) say they are preparing for such a calamity
- 61 per cent say they are "extremely concerned", of whom 43 per cent are taking precautions
- 31 per cent are "somewhat concerned", of whom 25 per cent are taking precautions
- 93 per cent are concerned their company will be impacted by extreme weather this year
- 52 per cent are more concerned
- 28 per cent are as concerned as they were last year
- 13 per cent are worried but less concerned, which indicates the steps they're taking to adapt and build resilience
- 90 per cent factor into their plans an expectation that extreme weather "could – and will – happen at any time"
- The impacts of extreme weather events last year were:
- 68 per cent saw their profits reduced
- 30 per cent say profits were reduced by 6-10 per cent
- 14 per cent suffered 11-25 per cent reduction in profits
- 6 per cent suffered more than 25 per cent in reduced profits
- 18 per cent say profits were reduced by 5 per cent or less
- 65 per cent had their operations directly impacted (e.g., shut down operations, or suffered loss of power, water supply, communication and other utilities that impaired operations)
- 60 per cent say employees were directly impacted (e.g., lost productivity) last year
- 52 per cent experienced disruptions in their supply chains
- 47 per cent say their costs rose significantly
- 43 per cent suffered damage to their physical location (e.g. store, factory, physical assets, etc.)
- 68 per cent saw their profits reduced
Businesses revving up emergency preparedness
The survey finds that over half (53 per cent) are investing in infrastructure modifications to withstand extreme weather. This might include retrofitting buildings to be more heat-resistant, embracing adaptive architecture, or incorporating permeable materials and green infrastructure to manage stormwater runoff and reduce flooding, says Ms. Davé.
Nearly eight in 10 (78 per cent) are investing in data, analytics and technology solutions to identify, monitor or mitigate climate risk.
"The increased likelihood and severity of extreme weather events means we can't let our guard down," says Leon Gaber, a Victoria-based partner and National Lead for KPMG in Canada's Critical Infrastructure Resilience and Emergency Management practice. "Whether disaster strikes in remote areas or in urban centres, companies and governments must continuously evaluate and update emergency planning and procedures to incorporate lessons learned and best practices.
"By using data and advanced technologies such as artificial intelligence, remote sensors, drones and digital twins, companies can enhance their ability to forecast climate-related events, assess their effects on operations, and respond faster and more effectively."
According to the KPMG survey, two-thirds of business leaders say they have a multi-year climate adaptation plan with short-, medium-, and long-term actions tailored to their business operations to make their company more resilient, and 56 per cent are collaborating with climate experts to improve their preparedness for long-term climate changes. Some six in 10 (62 per cent) have performed a climate risk assessment to identify climate hazards and 66 per cent plan to do a climate risk assessment within the next two years.
Two-thirds (67 per cent) say last year's extreme weather prompted their company to develop specific emergency plans, and 62 per cent created an emergency response planning team within the last 12 months.
While most (93 per cent) are investing in climate-related risk and adaptation preparedness, 68 per cent say recession fears arising from the U.S.-instigated global trade war are forcing them to cut climate-risk investments.
"While companies are being forced to look at ways to cut spending due to the trade war, mother nature will not cut us a break because of new tariffs," says Doron Telem, partner and National ESG Leader for KPMG in Canada, based in Toronto.
"What organizations need is to implement more advanced tools to project and mitigate weather impacts. This will inform businesses on structuring their emergency management plans – much like they do for other risks such as cyber and supply chain disruptions. Climate events should no longer be considered a force majeure, and appropriate plans should be in place to effectively respond to an emergency and recover from it. Best practices would include a scenario analysis for specific weather events, tabletop exercises to simulate emergency protocols, and implementation of recurring training to account for changing conditions over time."
According to Statistics Canada, the amount insurers have paid out on catastrophic weather events has increased significantly in the last 40 years. Between 1983 and 2008, payouts averaged $400 million a year. Since 2009, that number has ballooned to nearly $2 billion annually, hitting $3.4 billion in 2022 and $3.1 billion in 2023. In 2024, four major climate events – floods in Toronto, wildfires in Jasper wildfires, hailstorms in Calgary and Hurricane Debby in Quebec – resulted in over $7.1 billion in payouts alone.
Yet, these losses may be just the tip of the iceberg. A report from the Intact Centre on Climate Adaptation indicates that for every $1 of insurable loss recorded, $3-4 in uninsurable loss and damage is absorbed by governments, businesses, and individuals.
More than six in 10 organizations (63 per cent) have insurance for some weather impacts but are looking to increase their insurance coverage, finds the KPMG survey. Sixty-one per cent say they are in the process of developing a comprehensive weather impact insurance review. Nearly a third (31 per cent) say their insurance was cancelled due to climate or extreme weather risks and 32 per cent do not have insurance to cover severe weather impacts because it's too expensive.
KPMG in Canada surveyed business owners or executive level C-suite decision makers at 351 Canadian companies between April 16 and May 6, 2025, using Sago's premier business research panel. Thirty-three per cent of the companies have between $500 million and $1 billion in annual gross revenue, 25 per cent have between $100 million and $299 million, 21 per cent have between $300 million to $499 million, 11 per cent have between $10 million and $99 million, and 10 per cent have more than $1 billion. No companies were surveyed under $10 million in annual gross revenue.
About KPMG in Canada
KPMG LLP, a limited liability partnership, is a full-service Audit, Tax and Advisory firm owned and operated by Canadians. For over 150 years, our professionals have provided consulting, accounting, auditing, and tax services to Canadians, inspiring confidence, empowering change, and driving innovation. Guided by our core values of Integrity, Excellence, Courage, Together, For Better, KPMG employs more than 10,000 people in over 40 locations across Canada, serving private- and public-sector clients. KPMG is consistently ranked one of Canada's top employers and one of the best places to work in the country.
The firm is established under the laws of Ontario and is a member of KPMG's global organization of independent member firms affiliated with KPMG International, a private English company limited by guarantee. Each KPMG firm is a legally distinct and separate entity and describes itself as such. For more information, see kpmg.com/ca.
For media inquiries:
Lee Reisch
Strategic Communications and Media Relations
KPMG in Canada
Phone: 416-386-5026
[email protected]
SOURCE KPMG LLP
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