{"id":92077,"date":"2025-02-04T13:44:04","date_gmt":"2025-02-04T18:44:04","guid":{"rendered":"https:\/\/www.rbcroyalbank.com\/en-ca\/?post_type=rbc_my_money_matter&p=92077"},"modified":"2025-02-04T13:45:02","modified_gmt":"2025-02-04T18:45:02","slug":"how-climate-adaptation-can-help-reduce-risk-for-your-business","status":"publish","type":"rbc_my_money_matter","link":"https:\/\/www.rbcroyalbank.com\/en-ca\/my-money-matters\/business\/right-sized-business-advice\/commercial\/how-climate-adaptation-can-help-reduce-risk-for-your-business\/","title":{"rendered":"How Climate Adaptation Can Help Reduce Risk for Your Business"},"content":{"rendered":"\n
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As global warming and climate change contribute towards more extreme weather events\u2014flooding, heat domes, wildfires\u2014that can lead to problems for businesses, including operational interruptions, property damage and prolonged closures. Dr. Blair Feltmate, head of the Intact Centre on Climate Adaptation at the University of Waterloo<\/a>, shares his thoughts on the importance of making preparedness part of how businesses operate.<\/p>\n\n\n\n

The financial impact of extreme weather events in Canada<\/h2>\n\n\n\n

In addition to causing considerable damage to the environment and putting the safety of Canadians at risk, extreme weather events have economic consequences, and businesses can take a financial hit when faces with flooding, wildfire, or extreme heat.<\/p>\n\n\n\n

In terms of insured losses due to extreme weather, the summer of 2024 was the most destructive in Canadian history. It resulted in a total of $7.1 billion in damage, according to the Insurance Bureau of Canada<\/a>.<\/p>\n\n\n\n

What was once known as \u201csummer\u201d might now colloquially called \u201cfire season\u201d by those who live in parts of British Columbia and Alberta. Canada\u2019s 2024 wildfires are the second-most destructive in the last two decades, with more than 5.3 million hectares burned<\/a>. While that\u2019s below the unprecedented wildfire season of 2023, which tops the list and claimed more than 15 million hectares of land, it\u2019s signalling a new type of Canadian summer.<\/p>\n\n\n\n

Other parts of the country are experiencing historic rainfall. Central provinces like Ontario and Quebec saw widespread flooding events in 2024, including the weather system that passed through Toronto on July 16, 2024, resulting in flash floods that caused over $940 million in insured damage<\/a>. In August, Quebec experienced the tail end of Hurricane Debby, which caused close to $2.5 billion<\/a> in insurable damage, making it the most destructive (and expensive) storm in the province\u2019s history. These were once considered one-in-100-year flood events, but scientists at Western University and the National Research Council of Canada<\/a> are now suggesting that they will become one-in-15-year events by the end of the 21st century.<\/p>\n\n\n\n

The effects of global warming and climate change are becoming hard to ignore, especially to business owners.<\/p>\n\n\n\n

It\u2019s important for businesses to plan and prepare for extreme weather events<\/h2>\n\n\n\n

Canada, which is warming twice as fast<\/a> as the global average, is feeling the impact from coast to coast. As climate-related disruptions become more frequent, businesses need to work to prioritize and protect themselves against potential property damage, operational interruptions and prolonged closures.<\/p>\n\n\n\n

And while the cost of preparations can add up, the return on investment may be worth it for businesses. Every dollar invested in climate adaptation and preparedness produces $3 to $8 in avoidant losses<\/a> per decade, according to the Intact Centre on Climate Adaptation.<\/p>\n\n\n\n

\u201cClimate change is here to stay and the most we can do is slow it down, so we need to adapt to the extreme risk that\u2019s not just on the ground today, but the greater risk that\u2019s coming,\u201d says Dr. Blair Feltmate, head of the Intact Centre on Climate Adaptation at the University of Waterloo.<\/p>\n\n\n\n

\u201cThe worst-case scenario is that we continue at our current pace, which, in terms of preparedness, is going up on a very shallow line, whereas the degree of stress on the system driven by climate change is going up on a very steep line.\u201d<\/p>\n\n\n\n

What is climate adaptation?<\/h3>\n\n\n\n

For business owners, proactive strategies like upgrading physical infrastructures and developing robust risk management plans can help safeguard assets and ensure continuity in uncertain conditions. Beyond immediate protection, climate adaptation demonstrates leadership and accountability in addressing global climate challenges. Businesses that adapt now could be at an advantage in a rapidly evolving economic and environmental landscape.<\/p>\n\n\n\n

Climate adaptation is the process of adjusting practices, systems and infrastructure in response to the current and projected impacts of climate change. As extreme weather events become more frequent and ecosystems shift, it\u2019s critical for Canadian business owners to take proactive measures.<\/p>\n\n\n\n

\u201cThings are getting worse faster,\u201d says Feltmate. \u201cWe have to break out of our current systems of disaster management to get ahead of the curve on climate change and stop chasing extreme weather and solve the problem before the problem happens .\u201d<\/p>\n\n\n\n

How can businesses mitigate climate risk?<\/h2>\n\n\n\n

The gap between preparedness and destructive climate events is growing and Feltmate believes that we need to bend the curve of vulnerability to extreme weather. Feltmate and his team focus on three perils of climate risk: Flood, wildfire, and extreme heat. Their work involves working with business, government, homeowners and communities to develop guidelines and mobilize action to mitigate risk.<\/p>\n\n\n\n

\u201cFlooding and wildfire are the two most costly, financially, and extreme heat, the third peril, is the one that, when it goes wrong, people die and they die in high numbers,\u201d says Feltmate, who notes that during the heatwave in British Columbia in 2021, 619 people died prematurely<\/a> due to extreme heat.<\/p>\n\n\n\n

Infrastructure updates<\/h3>\n\n\n\n

Updating physical infrastructures, like retrofitting commercial buildings, is one of the first steps businesses can take to mitigate climate risk. A vulnerability assessment can help identify which facilities and\/or assets are most at risk from climate-related threats, including flood and wildfire. Larger corporations might consider using tools like geographic information systems (GIS) and climate modelling to determine areas of concern and prioritize upgrades.<\/p>\n\n\n\n

Small- to medium-sized businesses can focus on more attainable building updates, like swapping existing building materials with more durable ones, including wind-resistant windows and fireproof siding and roofs, all of which can mitigate potential damage.<\/p>\n\n\n\n

Stormwater management<\/h3>\n\n\n\n

Improving stormwater management systems can also aid in climate adaptation. Simple seasonal tasks<\/a>, like clearing debris from building eaves and downspouts, and testing sump pumps and backup power systems, can be performed annually. Building managers may also consider measures<\/a> such as installing real-time monitoring systems and flood alarms, which track any unexpected water, or installing renewable energy sources like solar panels with external batteries so operations can continue during unexpected power outages.<\/p>\n\n\n\n

Risk management planning<\/h3>\n\n\n\n

Robust risk management plans enable businesses to anticipate and address climate-related disruptions. Tailored contingency plans for scenarios like severe weather disruptions help define clear responsibilities and response times while employee guidelines for executing emergency protocols, updated annually or after significant incidents to reflect new data, can enhance preparedness.<\/p>\n\n\n\n

Climate adaptation as part of your risk management process<\/h2>\n\n\n\n

\u201cWe\u2019ve done a very good job in Canada at identifying what the expressions of extreme weather risks are in the country and where they’re going to disproportionately be realized, and also developing standards and guidelines to mitigate risks relative to flooding, wildfire and extreme heat at the community level,\u201d says Feltmate.<\/p>\n\n\n\n

\u201cWhen it comes to preparedness Canada is on par as a global leader. But having said that, we\u2019ve got a long way to go, and so does everybody else.”<\/p>\n\n\n\n

As an overall strategy, climate adaptation is about just that: adaptation. And as the country changes, so will business strategies and responses to risk management. <\/p>\n<\/div>\n<\/section>\n","protected":false},"excerpt":{"rendered":"

Learn more about how businesses can adapt and respond climate-related risks.<\/p>\n","protected":false},"author":80,"featured_media":92153,"parent":57338,"menu_order":0,"template":"wp-custom-template-optimizely-mmm","meta":{"_acf_changed":false,"advgb_blocks_editor_width":"","advgb_blocks_columns_visual_guide":"","footnotes":""},"tags":[574],"rbc_content_type":[31],"rbc_audience":[110],"rbc_lob_group":[35],"rbc_difficulty_level":[70],"rbc_mmm_category":[305,391,326],"class_list":["post-92077","rbc_my_money_matter","type-rbc_my_money_matter","status-publish","has-post-thumbnail","hentry","tag-commercial-insights","rbc_content_type-article","rbc_audience-business-owners","rbc_lob_group-business","rbc_difficulty_level-intermediate","rbc_mmm_category-business","rbc_mmm_category-commercial","rbc_mmm_category-right-sized-business-advice"],"acf":{"contently_publication_id":"","custom_author":"Lisa Felepchuk","rbc_video_header":"","rbc_media_duration":"","rbc_toc_for_mmm_tag":"h2","rbc_toc_for_mmm_limit":6,"rbc_toc_for_mmm":null,"rbc_toc_for_mmm_action":""},"yoast_head":"\n\n\n\n\n\n\n\n\n\n\n\n\n\t\n