A KPMG in Canada survey
reveals the majority of companies saw an
impact on their bottom lines and net zero progress, prompting them
to start climate-proofing their business operations
TORONTO, July 17,
2024 /CNW/ - More than nine in 10 (92 per
cent) Canadian business leaders fear that the extreme weather
events over the last year are the new normal and that their
organization will be hit by a climate-related event this year,
finds new KPMG in Canada
research.
A recent survey of 350 Canadian business leaders found that
56 per cent of companies suffered a hit to their
profitability from last year's extreme weather events, while 49
per cent saw their costs rise significantly due to issues
ranging from productivity loss to broken supply chains to increased
insurance costs.
"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," says Roopa Davé, KPMG in
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."
"Companies are beginning to treat climate risk the same as other
enterprise risks and taking the necessary steps to adapt and build
mitigation strategies that help them navigate increasingly
unpredictable weather events. A robust climate risk assessment
includes multiple integrated factors, including potential impacts
on a company's facilities, supply chains, and business model."
Key poll findings:
- 92 per cent of Canadian businesses now factor in an
expectation that extreme weather could and will happen at any
time
- 92 per cent fear that their organization will be hit by
a climate-related event this year
- 21 per cent are "extremely" concerned
- 46 per cent are "very" concerned
- 25 per cent are "slightly" concerned
- 56 per cent say they suffered a hit to their
profitability from last year's extreme weather events
- 49 per cent faced significantly increased costs
- 41 per cent reported loss of revenue
- 57 per cent had their operations directly impacted
(including a loss of power, water supply, communication, and other
utilities)
- 50 per cent reported that employee productivity was
directly impacted, that is, lost productivity
- 47 per cent experienced supply chain disruptions or
broken supply chains
- 30 per cent say their insurance was either cancelled or
the "costs increased significantly"
- 89 per cent are more determined than ever to find ways
to reduce their impact on the environment
- 88 per cent are willing to make more investments to
support their climate-related goals
Companies are committed to sustainability and decarbonization
but there are hurdles.
Faced with the reality of more extreme weather, increased
demands from stakeholders to make sustainability a priority, and
the recognition that regulations are coming that will require
disclosure of their decarbonization plans, most (89 per
cent) Canadian businesses say they are more determined
than ever to find ways to reduce their impact on the environment.
"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," says Doron
Telem, Partner and National ESG Leader for KPMG in
Canada. "Most are struggling to
find the capacity, collect the required data and navigate an
increasingly complex regulatory environment." Mr. Telem says this
has slowed decarbonization investments, noting that only a third of
companies (33 per cent) have integrated sustainability
criteria into product design, manufacturing process, and supply
chain operations.
"Organizations should not wait for regulation to drive their
sustainability goals. They should focus on value creation and
protection by developing and executing transition plans to lower
emissions today. It is critical to understand which projects can
have a positive ROI and, in parallel, which operations create
challenges for meeting sustainability goals and require alternative
approaches," says Mr. Telem.
Other key poll findings:
- 91 per cent have strengthened their strategic commitment
to addressing sustainability, climate risk, or decarbonization
- 80 per cent say their company "lacks the time and
resources" to make reducing their carbon footprint a "top or
immediate" priority
- 75 per cent say their company also lacks the data that
they need to effectively measure, implement, and evaluate their
carbon footprint
- 89 per cent believe regulations are needed to drive
decarbonization across all industries and create a level playing
field globally
- 29 per cent have set specific targets for carbon
emission reduction
- 33 per cent have integrated sustainability criteria into
product design, manufacturing process, and/or supply chain
operations
- 42 per cent have invested in renewables
KPMG in Canada surveyed
business owners or executive level C-suite decision makers at 350
Canadian companies between June 5 and June
15, 2024, using Sago's premier business research panel.
Thirty-one per cent of the companies have $500 million and
$1 billion in annual gross revenue, 23 per cent have between
$100 million and $299 million, 23 per cent have between
$300 million to $499 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
416.386.5026
leereisch@kpmg.ca
SOURCE KPMG LLP