As wildfire season intensifies in Canada and cleanup continues in Los Angeles County following destructive wildfires, new research from KPMG in Canada shows the majority of Canadian business leaders are increasingly concerned about the risks posed by urban climate disasters.
The survey found that more than 90% of business executives expect extreme weather to impact their operations this year. Most reported that their businesses had been disrupted or damaged by severe weather events. Around 90% now plan on the assumption that extreme weather “could – and will – happen at any time,” and over two-thirds are preparing for climate-related emergencies.
Roopa Davé, national climate risk leader at KPMG in Canada, noted that the rising frequency and severity of weather events make all regions vulnerable, from remote forests to urban centers. She referenced recent wildfires in Canada and the scale of destruction in Los Angeles, highlighting the growing risks.
Davé said there has been a clear shift in how Canadian business leaders view climate risks. Two years ago, extreme weather was seen as a possible factor in risk management. Now it is a central consideration. Many companies are updating continuity plans, adopting climate modelling tools, retrofitting buildings, investing in renewable energy, and improving employee preparedness.
The survey of 351 business leaders showed 91% have increased concern about extreme weather following the Los Angeles wildfires. Among them, 61% described themselves as “extremely concerned,” with 43% taking precautions. Another 31% were “somewhat concerned,” with 25% taking precautions.
Most, or 93%, of the respondents expect extreme weather to affect their companies this year. Over half reported growing concern compared to last year, while some indicated concern had stabilized or declined, possibly due to steps taken to build resilience.
According to the report, last year’s weather events had measurable impacts: 68% reported reduced profits, with 30% seeing a 6-10% decline and 14% experiencing reductions of 11-25%. Operational disruptions affected 65% of businesses, 60% noted impacts on employee productivity, 52% faced supply chain interruptions, and 47% saw rising costs. Physical damage to facilities was reported by 43%.
In response, 53% of companies are investing in infrastructure modifications to better withstand extreme weather, including building retrofits and green infrastructure to manage stormwater. Nearly 80% are investing in data, analytics, and technology to identify and manage climate risks.
Leon Gaber, national lead for KPMG’s Critical Infrastructure Resilience and Emergency Management practice, emphasized the importance of ongoing updates to emergency plans. He noted the increasing use of technologies such as artificial intelligence, sensors, drones, and digital twins to forecast events and improve responses.
The survey also found that two-thirds of business leaders have multi-year climate adaptation plans, and 56% are working with climate experts to improve preparedness. Sixty-two per cent (62%) have completed climate risk assessments, with another 66% planning to do so within two years. Sixty-seven per cent (67%) said last year’s weather prompted the development of specific emergency plans, and 62% have formed emergency response teams in the past year.
Meanwhile, data from Statistics Canada shows insurance payouts for catastrophic weather have increased significantly over the past 40 years. Between 1983 and 2008, payouts averaged $400 million annually; since 2009, the average has risen to nearly $2 billion per year, reaching $3.4 billion in 2022 and $3.1 billion in 2023. Four major climate events in 2024 alone resulted in over $7.1 billion in insurance payouts.
However, insured losses represent only part of the total impact. The Intact Centre on Climate Adaptation estimates that for every dollar in insured losses, governments, businesses, and individuals bear $3 to $4 in uninsurable damage.
Currently, 63% of organizations carry some insurance coverage for weather-related impacts but many are seeking to expand it. Sixty-one per cent (61%) are reviewing their insurance policies, while 31% reported cancellations due to climate risks and 32% do not have coverage because of high costs.
KPMG conducted the survey between April 16 and May 6, 2025, with business owners and executives from 351 Canadian companies. The companies surveyed ranged in annual revenue from $10 million to over $1 billion.
