Extreme weather conditions lead to revenue loss, rise in overall costs: Report

Nearly one-half of Canadian employers say employees 'directly impacted'

Extreme weather conditions lead to revenue loss, rise in overall costs: Report

Extreme weather conditions have led to a lot of problems for small and medium employers, according to a recent report from KPMG.

Nearly six in 10 (59%) of Canadian SMBs say they were "directly impacted" by the unprecedented number of extreme weather events this year – ranging from rampaging wildfires, damaging storms, floods, and heat domes, according to the report.

More than half of SMBs (51%) experienced a significant rise in their overall costs, while 44% cited a direct loss in revenue.

"Our survey reveals that climate-driven disasters are having a devastating impact on lives, livelihoods, and the economy," said Doron Telem, national ESG Leader at KPMG in Canada. "An alarming number of companies - nearly six in 10 - were impacted because of extreme weather events, and the year is not over. A changing climate means businesses need to make climate risk a priority to manage the costly reality of being caught unprepared in the future."

We are in an age where corporate responsibility is no longer a choice but a necessity, according to a previous report.

How did extreme weather impact SMBs?

Small- and medium-sized employers had to deal with the following because of extreme weather this year, according to the KPMG CEO Outlook, based on a survey of 1,325 CEOs between Aug. 15 and Sept. 15, 2023.

  • 51% experienced disruptions in their supply chain or broken supply chains
  • 45% say their facilities were damaged, for example, a store or factory, etc.
  • 41% had to relocate their operations or move to other facilities

As a result, 54% say their costs rose significantly. And 44% say their employees were also directly impacted.

When it comes to location, SMBs in Ontario excluding the Greater Toronto Area (79%), Saskatchewan and Manitoba (71%) and British Columbia excluding the Greater Vancouver Area (64%) were most impacted by extreme weather.

British Columbia excluding the Greater Vancouver Area (61%), Saskatchewan and Manitoba (58%) and Ontario excluding the Greater Toronto Area (54%) also had the biggest number of employers that recorded reduced revenue as a result of extreme weather.

While 40% of workers say their company is doing enough in terms of their ESG, and it’s making them proud, 23% say there is “somewhat” of an effort from their employer, but it’s not enough, reports Robert Half.

Inclement weather policies

Operational challenges due to inclement weather can be manageable with up-to-date inclement weather policies, according to Indeed.

“Tornadoes, hurricanes, snow and heavy rainfall can all impact how employees get to work, your supply chain, and whether or not your customers and clients can access your business,” it said.

“By developing severe weather policy guidelines for your business, you and your team will be ready to respond to whatever Mother Nature sends your way.”

The job board noted that your inclement weather policies should also include how your company will respond if:

  • there’s a weather-related disruption to the power, water or communications at your place of business
  • your remote employees lose power or internet connectivity due to inclement weather at their usual place of work
  • weather conditions are too severe for exterior work, but workers can still work safely inside/at your facility
  • employees with school-aged children are unable to come to work because of weather-related school closures or school bus cancellations
  • an on-site employee is unable to return to their home following a shift due to inclement weather, and they need to shelter at a local hotel near your place of business
  • local authorities issue an evacuation order in the area where your brick-and-mortar location is, as well as where your employees reside

A majority of employers are tying ESG metrics in compensation plans for CEOs or other named executive officers (NEOs), according to a previous report.

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