“I always say this to business leaders: You can mitigate against greenhouse gas emissions all you want. But your business operations at site level and across supply chains could still be impacted by the physical risk of climate change,” Kathryn Bakos, Intact Centre’s director, climate finance and science, said in an interview.
Initially, the matrices set out major risks faced by the power transmission and distribution, commercial real estate, residential mortgage lending, property and casualty insurance, hydroelectric generation and wind-power generation industries. For power transmission, for instance, risks include flood-induced high water levels, which could leave inadequate clearance for power lines, or wildfires that can cause outages in corridors not adequately cleared of brush.
The report notes that for every dollar of insured losses, there are $3 to $4 of additional losses borne by businesses, individuals and governments. The Office of the Superintendent of Financial Institutions, which regulates Canada’s major banks and insurance companies, has warned of climate-related disruptions along with other risks to the financial system. They include regulatory and market risks stemming from the transition to low-carbon energy. In a policy announced in March,