Businesses Look to Adaptation as the Cost of Climate Impacts Mounts
With the impacts of climate change mounting, more Canadian businesses are beginning to pay attention, with risk managers, financial analysts, and investors weighing the cost of inaction and becoming advocates for more resilient communities and infrastructure.
“It’s sort of like the undertaker bragging, but business is good,” said Jim Mandeville, senior project manager with Toronto-based recovery firm FirstOnSite. “A lot of companies are waking up to this because they’re having to deal with it.”
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Mandeville, who worked hands-on on the cleanup at Calgary’s Saddledome after epic floods in 2013, “says the lion’s share of his business these days is with companies looking to upgrade and guard against the worst,” CBC News reports. “Some may still question the veracity and severity of climate change, but Mandeville says there is little dispute among his team and his customers about what they’re seeing on the ground.”
“We in the restoration community have been screaming about this for 20 years,” he said. Now, “people are finally starting to wake up to it.”
While not every instance of severe weather can be directly tied to climate change, Deloitte economist Craig Alexander told CBC, “we certainly are seeing increased frequency of these events, and they are taking an economic toll.” He said policy-makers and businesses are already “stress-testing” major disasters, from an earthquake in British Columbia to a wildfire taking out much of Alberta’s oil and gas production, to anticipate their economic impact.
“Increasingly we also need to think about how to build resilience,” Alexander said, and one of the best places to start is with the C$140 billion worth of Canadian infrastructure that was rated “poor” or “very poor” in 2016. “If we can build infrastructure that can cope with climate change, it will be less disruptive.”
While disaster management is traditionally seen as a cost of doing business, Atif Kubursi, professor emeritus of economics at Hamilton’s McMaster University, said investors are beginning to look at the balance between the cost of action and the “opportunity cost of inaction,” CBC states.
“We tend to present the environment as a major cost, and we have to do it for future generations, but you can’t sell it this way,” Kubursi said. While carbon tax opponents focus on the up-front cost at the gas pump, “if we don’t pay this three or four cents today, we are likely to face much higher costs in the future.”