Acting on climate action 'supports performance and competitiveness’
Canadian employers are expanding climate planning in ways that will reshape workforce strategy, policies and skills, according to new research from the BMO Financial Group.
The 2026 BMO Climate Institute Business Leaders Survey found that 78% of Canadian business leaders say their organisation has or is developing a climate plan, up from 66% in 2025. Across North America, nearly three‑quarters (73%) of respondents reported having or working on plans to address climate‑related risks and opportunities, up from 69% last year, according to the report.
Overall confidence that climate and resilience strategies are improving business outcomes has risen to 91% across North America in 2026, up from 88% in 2025 and 84% in 2023. In Canada, confidence stands at 88%, compared with 85% last year. BMO said the results signal a shift “from whether to act on climate‑related risks and opportunities to how climate action supports performance and competitiveness.”
Among companies that are acting, 30% of respondents said they are taking climate measures so their company can be run more effectively, while 27% said they are doing so to be more profitable, according to BMO Financial Group. That linkage between climate and performance is expected to feed into executive incentives, capability building and change management overseen by HR.
A majority of the world’s workforce is exposed to health hazards exacerbated by climate change, according to a previous report released by the International Labour Organisation (ILO).
Governance, decision‑making and risk
Indicators of structural change include more formalised climate governance, according to the fourth edition of the BMO Climate Institute Business Leaders Survey, conducted in January 2026 among 741 senior decision‑makers in Canada and the United States. Respondents hold senior roles such as C‑suite, president, vice‑president, executive director or general manager, and consider themselves senior decision‑makers.
Across North America, 32% of companies now have a formal strategy for tracking and managing supply‑chain emissions, up from 24% in 2023; in Canada, the figure is 30%, up from 20%. In addition, 38% of respondents say their climate strategies take environmental impact into account when making financial decisions, versus 25% in 2023, with Canada rising to 41% from 22%.
Extreme and unpredictable weather has become a leading concern following Canada’s second‑worst wildfire season on record in 2025. The BMO Climate Institute reported that “extreme and unpredictable weather is increasingly front of mind for business leaders considering the impact of climate‑related risks on their companies.”
Those who prioritise extreme weather are more likely to report impacts from higher energy costs, carbon pricing and deteriorating infrastructure, and to use artificial intelligence (AI) in resilience planning.
Cost pressures and AI adoption
Despite climate taking centre stage for many employers, there are still challenges ahead. Cost remains the most frequently cited obstacle to climate action, according to the BMO Financial Group.
In Canada, 38% of business leaders identify cost as the biggest barrier to advancing sustainability and resilience initiatives, compared with 25% in the United States. Sixty‑eight per cent of Canadian respondents think carbon pricing is affecting their business now or will soon, and 67% report being affected by the cost of low‑ and zero‑carbon products and services.
AI adoption is growing alongside climate efforts. In Canada, 57% of organisations use AI in daily operations and 55% in climate planning, with 64% expecting to increase AI investment over the next year. BMO reported that leaders view AI as helpful for developing climate plans, handling reputational issues, designing green products and planning resilience to extreme weather, changes likely to influence role design and skills demand across HR portfolios.
Why does climate action matter to employers?
Here’s a synthesis of why climate action matters for Canadian employers, drawing from Canadian think tanks and peer‑reviewed/policy research:
|
Theme |
Key evidence |
Implication for Canadian employers/HR |
Source |
|
Climate impacts on GDP |
The Canadian Climate Institute projects that by 2025 climate impacts will slow Canada’s economic growth by $25 billion annually—equal to half of projected GDP growth. |
Slower growth and more volatility increase pressure on employers to protect productivity, margins and jobs through proactive climate and resilience planning. |
Canadian Climate Institute, “Damage Control” report series |
|
Heat and productivity loss |
Modelling shows that installing shading on 50% of Canada’s manufacturing facilities by the 2080s could save an average of 15 million labour hours per year otherwise lost to heat‑related health and productivity effects. |
Rising heat exposure will require employers to adapt workplaces and schedules to safeguard worker health and sustain productivity. |
Canadian Climate Institute, “The Health Costs of Climate Change” |
|
Return on adaptation investment |
Every dollar spent on adaptation measures generates $13–$15 in direct and economy‑wide benefits; planned adaptation benefits in Canada generally exceed costs. |
Strong returns on adaptation strengthen the business case for employers to invest in resilience measures that protect operations, workers and communities. |
Canadian Climate Institute; Natural Resources Canada, “Canada in a Changing Climate: National Issues Report,” Chapter 6 |
|
Extreme weather and direct losses |
The 2013 Calgary flood displaced over 100,000 people, cost 5.1 million work hours and caused $7.5 billion in economic damages; the 2024 Jasper wildfire damaged or destroyed 358 homes and businesses and caused $1.46 billion in economic losses. |
Major climate disasters can instantly disrupt jobs, workplaces and local labour markets, making continuity planning and employee support a core HR responsibility. |
Institute for Research on Public Policy (Policy Options), “Climate adaptation is essential for Canada’s economy,” 2025 |
|
Job losses from inaction |
Climate‑related job losses could double by mid‑century and rise to 2.9 million by end‑of‑century without stronger action. |
Failing to adapt and decarbonise risks large‑scale employment disruption, underscoring the need for forward‑looking workforce and re‑skilling strategies. |
Canadian Climate Institute, “Economic Impacts of Climate Change” |
|
Green jobs opportunity and skills gap |
Up to 300,000 new green jobs could be created in Canada by 2030, but a green‑skills shortage is emerging. |
Employers will need to invest in training, recruitment and internal mobility to secure talent for rapidly growing climate‑aligned roles. |
Smart Prosperity Institute, “Ready for Green Jobs” |
|
Growth of climate‑aligned sectors |
Clean Energy Canada projects 184,000 workers in the EV industry—a 26‑fold increase over 2020; Canada’s environmental and clean tech sector grew 25% from 2012 to 2019, outpacing overall economic growth of 16%. |
Fast‑growing clean sectors will compete aggressively for skilled workers, intensifying talent attraction and retention challenges for employers across the economy. |
Clean Energy Canada; Environment and Climate Change Canada (Statistics Canada data) |
|
Carbon pricing and capital flows |
An estimated 70 major decarbonisation projects valued at over $57 billion are supported by carbon pricing in Canada. |
Capital is increasingly flowing to carbon‑aligned projects, favouring employers with credible climate strategies and affecting where new jobs and facilities are created. |
Canadian Climate Institute, cited in ECCC industrial carbon pricing engagement, 2025 |
|
Climate literacy and talent strategy |
Canada risks falling behind without a coordinated green‑jobs strategy as workers face uncertainty and employers face talent shortages; demand is rising for leaders combining regulatory knowledge, ESG literacy and execution capability. |
HR must build climate literacy into leadership pipelines, workforce planning and recruitment to stay competitive in a climate‑conscious labour market. |
C.D. Howe Institute, “Canada’s green jobs strategy needs more than good intentions,” 2026; ProFound Talent, 2026 Talent Landscape Report |
|
Trade, competitiveness and decarbonisation |
U.S. 50% tariffs on Canadian steel accelerated Algoma Steel’s move from blast furnaces to lower‑cost electric arc furnaces, showing decarbonisation as a competitiveness lever. |
Trade‑exposed industries will face structural shifts in technology and skills, requiring re‑training, redeployment and careful change management for affected workers. |
RBC Climate Action Institute, “Climate Action 2026: Reset, Retreat, or Renew” |
|
Macroeconomic transition risks |
The Bank of Canada warns that the shift to a low‑carbon economy will likely involve significant economic dislocation, but that clear, gradual policies and adaptable labour markets can mitigate impacts on firms. |
Transition risks will reshape sectors and occupations, making adaptable labour markets and proactive HR strategies critical to cushioning workers and businesses. |
Bank of Canada, “Researching the Economic Impacts of Climate Change” |
According to the ILO, out of a total global workforce of 3.4 billion, over 2.4 billion workers will likely be exposed to excessive heat during the course of their work.
