Definition

Climate resilience

Climate resilience involves preparing for and adapting to the changing climate to ensure long-term business viability and success.

Published January 16, 2025

Extreme weather events have increasingly been causing business and property damage. Whether it’s a flooded crop or a tourism company rebuilding after a forest fire, the high price of weather disasters has led many entrepreneurs to consider protecting their businesses from future climate incidents.

Companies are now looking to climate resilience to counteract the impacts of our changing climate.

What is climate resilience?

Climate resilience refers to the ability to withstand, adapt to, and recover from the impacts of climate change. It involves surviving adverse events, maintaining essential functions, and thriving in the face of these challenges.

Contingency is at the heart of building your business’s climate resilience. That means looking toward alternative power sources or keeping digital and physical copies of your most important documents.

Unfortunately, many businesses do not take climate resilience seriously and are unprepared for potential disasters, according to BDC Senior Economist Sylvie Ratté. She says many people recognize the threat of extreme climate events, but most are not doing enough to protect themselves.

“Roughly half of SMEs believe it’s going to impact their business,” she says, referring to a BDC survey that found that 31% of SMEs have been affected by climate events like fires and flooding. However, only 12% of entrepreneurs have made climate adaptation a priority. “They think it’s important, but they don’t do much about it. They don’t prepare for it,” she adds.

Ratté says company owners need to take action to assess the risks of climate change for their businesses.

Key aspects of climate resilience

Preparation: Implementing measures to anticipate and mitigate the effects of climate change, like developing early warning systems for extreme weather events.

Response: Having robust emergency response plans and resources, like solid support networks, to react effectively to climate-related events.

Recovery: Ensuring your business can bounce back and function after a climate event, for example by reopening stores quickly and restoring services.

Adaptation: Continuously improving and adjusting practices, policies, and buildings to better cope with future climate impacts.

You need to prepare, to know what to do when something happens and then how to recover and get back to normal.”

How is climate change expected to impact Canadian businesses in the coming years?

“Canadian businesses will be impacted through their value chain,” Ratté notes.

She says all businesses, no matter where they’re located, should expect their supply chain to be affected. Countries with ports that ship goods to North America will be hampered by climate disasters on their coasts.

In short, climate change is damaging to Canada’s economy.

Take, for example, two events from July 2024: a single afternoon of heavy rain in Toronto, Ontario, and a wildfire that destroyed parts of Jasper, Alberta. Counting only what had been insured, the financial damage from these events surpassed $1.8 billion, according to the Canadian Climate Institute (CCI).

The CCI notes that northern and coastal areas are most at risk for flooding and intense warming.

Why is climate resilience important for businesses?

There are several reasons for businesses to adopt climate resilience:

Production capacity
Climate change leads to extreme weather events, which can disrupt operations, supply chains, and infrastructure. Building resilience can help anticipate and mitigate these risks, reducing potential damage and downtime.
Financial performance
Climate-related risks can impact financial performance. They increase expenses like insurance premiums and capital costs. By developing adaptative strategies, resilient businesses can better manage these costs and potentially benefit from savings.
Operational continuity
Resilient businesses are better prepared to maintain operations in challenging conditions. With contingency plans, diversified supply chains and infrastructure that can withstand extreme weather, you can continue to deliver products and services even during disruptions.
Innovation and competitive advantage
Embracing climate resilience can drive innovation as businesses seek new ways to adapt to changing conditions. This proactive approach can create a competitive edge in the marketplace.

Think about worst-case scenarios and do some what-if analyses. Think about your employees as well.

What is climate resilience planning?

Climate resilience planning involves asking yourself some key questions:

How exposed are we?
Where are our vulnerabilities?
What are our options?
What will we prioritize?

Ratté says businesses need to understand the risks they face. Do you operate in an area with aging municipal infrastructure? Does your business depend on a single supplier?

“Think about worst-case scenarios and do some what-if analyses. Think about your employees as well. If a disaster hits, your business may be safe, but half of your employees might be in damaged homes. You’ll need to help them, too.”

In the same way that car drivers are encouraged to keep an emergency supply kit in the winter, your company should prepare for potential disasters.

A climate resilience plan is a good start.

Think of it as an emergency plan. If your company experiences a complete power failure or fire, people will need to access important documents.

“You have to make sure all the information and papers you need—things like contact information for your employees and insurance documents—are safe. You need to make sure you have a copy of everything,” Ratté says.

She acknowledges that the threat of fires and floods has always existed for businesses. “But now there’s more of a threat. And we expect that it’s going to increase in the future.”

How can we improve climate resilience?

The University of Waterloo’s Intact Centre on Climate Adaptation published a report examining how climate events negatively impact Canadian businesses.

It outlines actions you can take to mitigate climate risks. Here is a summary.

Forest fires

Establish a 10-metre perimeter around your property as a fire buffer.
Keep roofs and gutters free of combustible materials and add non-combustible screen mesh to openings and vents.
Install HEPA filters on your HVAC system to cleanse air from wildfire smoke.
Use fire-resistant materials in new builds.

Ice, hail and snow loading

Pre-emptively remove snow and ice from roofs.
Ensure that snow removal items like heating cables and chemical de-icers are available. Secure contracts with snow and ice removal companies.
Install thermal imaging cameras to detect leaks and prevent mould.
Insulate outdoor pipes and those in unheated areas or drain and turn off their water supply during winter months.

Floods

Develop an emergency management plan, including flood procedures. Test them annually with operations staff.
Equip elevators with water sensors to automatically return to higher floors if water is in the basement or the underground parking garage.
Elevate critical equipment such as electrical and communication systems, HVAC, and server rooms above expected flood levels.
If they can’t be elevated, ensure these systems are flood-proof.

What is the difference between climate adaptation and resilience?

While climate adaptation and resilience are closely related concepts, they have distinct meanings and applications.

Climate adaptation refers to adjusting to actual or expected climate and its effects. Climate resilience is the capacity to prepare for, respond to and recover from climate impacts.

Adaptation is about making specific changes to cope with climate impacts, while resilience is about building the capacity to handle and recover from those impacts effectively.

Ratté says climate resilience is more proactive than climate adaptation. “It’s about assessing the risk to your business, the risks from climate change. It’s about acting now and accepting the fact that you have to change.”