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industry & Markets
Business Risks and Opportunities of Climate Change
With Dr. Gordon McBean—Research Chair, Institute for Catastrophic Loss Reduction
This summer the UN’s Intergovernmental Panel on Climate Change (IPCC) released a report detailing the current severity of our warming climate. The UN Secretary General stated that it was a “code red for humanity.” The Institute for Catastrophic Loss Reduction (ICLR) is a not-for-profit research institute founded by the insurance industry and affiliated with Western University that produces disaster prevention research and communications. The National Issues Report, Canada in a Changing Climate: Advancing our Knowledge for Action, with contributions from ICLR, provides a Canadian perspective on how climate change is affecting our communities, environment and economy and what can be done about it. ICLR’s chapter in this timely report, Climate Disclosure, Litigation and Finance, examines how the risks and opportunities presented by climate change are a crucial issue for business.
“There is clear evidence of a climate change adaptation deficit in Canada—as demonstrated by recent impacts of extreme weather events such as floods and wildfires—and nearly every economic sector in Canada is impacted,” said Dr. Gordon McBean, Member of the Order of Canada and one of the chapter’s co-authors.
“From the insurance industry perspective, there are several important findings. Climate change is and will impose increasing economic costs on Canada as losses from severe weather events are significant and rising. Adaptation actions are important with each dollar invested generating, on average, five to six dollars in benefits.”
The report states that since the eighties, climate-related damage claims paid by Canada’s insurers have doubled every five to ten years. The insurance industry can lobby the government to try to move faster on these issues, but in the meantime, these effects are being felt by communities across the country. In another report co-authored by Dr. McBean earlier this year—Building Climate Resilient Communities—they highlight the importance of not just moving forward, but doing so in such a way that benefits all Canadians:
Equity, diversity and inclusion are essential principles for climate, health and all authorities as they work with partners to address climate change in a manner that brings benefits to all segments of the population.
“It’s vital for Canada’s economic and social well-being that progress on adaptation be accelerated through rapid and deliberate plans and actions,” said Dr. McBean.
While government action is ultimately what’s required, businesses should try to make a difference in whatever ways they can. The insurance industry co-founding the ICLR to produce research like this was an important step, but there are things we can also do as individuals. In an effort to mitigate personal losses from climate events, ICLR publishes booklets with information homeowners can use to prepare their homes for these unfortunately predictable disasters, including advice like installing backwater valves and sump pumps to prevent or reduce flood damage. Brokers are encouraged to share information with their clients so they can protect them from losses before they happen. As the ICLR report tells us clearly: climate change is here, it’s costing us and we have to adapt.
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