Canadian Business Confidence in Climate Planning Strengthens as Extreme Weather, Costs and AI Shape Strategy

Canadian Business Confidence in Climate Planning Strengthens as Extreme Weather, Costs and AI Shape Strategy

TORONTO, May 19, 2026 /CNW/ - Confidence continues to rise among Canadian business leaders that actions taken to reduce climate risk are delivering results, according to the 2026 BMO Climate Institute Business Leaders Survey. Survey findings suggest companies are sharpening their focus on resilience, competitiveness, and operational performance amid intensifying physical climate risks.

Key Findings – Canada

• 78% of Canadian business leaders say their organization has or is developing a climate plan, up from 66% in 2025
• Nine‑in‑ten leaders with formal climate strategies are confident these efforts are improving business outcomes
• Extreme and unpredictable weather is a leading climate-related concern for businesses
• 38% cite cost as the biggest obstacle to advancing sustainability and resilience initiatives
• More than half of Canadian organizations are using AI in daily operations (57%) or climate planning (55%), with 64% expecting increased AI investment over the next year

The fourth survey since 2022, conducted in January 2026 among 370 senior Canadian decision‑makers, highlights a shift in corporate thinking—from whether climate planning is necessary to how it supports long‑term performance and competitiveness.

Climate Planning Becomes Core to Business Strategy

Overall confidence that climate and resilience strategies are improving business outcomes reached 91% across North America, up from 88% in 2025 and 84% in 2023 (88% in Canada, up from 85% in 2025). Canadian leaders increasingly view climate planning as a lever for operational effectiveness and financial discipline, with business leaders saying their company can run more effectively (30% in North America, 27% in Canada) and more profitably (27% in North America and 25% in Canada) by addressing climate change.

Indicators of progress include:

• 32% of companies have a formal approach to tracking and managing supply‑chain emissions, up from 24% in 2023 across North America (30% in Canada, up from 20% in 2023)
• 38% of companies are integrating environmental considerations into financial decision‑making, up from 25% in 2023 across North America (41% in Canada, up from 22% in 2023)

Extreme Weather Drives Risk Awareness

Physical climate risk remains a dominant concern for Canadian businesses following Canada's second‑worst wildfire season on record in 2025. Leaders prioritizing extreme weather are more likely to report impacts from rising energy costs, infrastructure stress, and carbon pricing, and are also more likely to leverage AI to strengthen resilience planning.

Costs Remain a Key Constraint

Despite momentum, cost pressures continue to be the most significant barrier. Canadian businesses report ongoing sensitivity to carbon pricing and the cost of low‑ and zero‑carbon products and services. In fact, 68% think carbon pricing is affecting their business now or will soon, compared to 69% last year and 68% the year before, while 67% report being affected by the cost of low‑ and zero‑carbon products and services – a decrease from 72% in 2025.

At the same time, 84% of respondents say they are interested in financial incentives tied to sustainability or resilience outcomes, reinforcing the role financial institutions can play in supporting investment and planning.

Regional Perspectives Across Canada

• Western Canada:
  • Focus is on wildfire risk, drought, and infrastructure resilience, with 67% of business leaders in Western Canada concerned with extreme weather events (61% say extreme weather will be affecting business soon and 31% say it is already), and 81% of Western Canada business leaders concerned with challenges such as deteriorating or outdated infrastructure (69% say deteriorating or outdated infrastructure will be affecting business soon, and 23% say it already is)
    
    
• Prairies: Energy transition, weather volatility, and commodity exposure shape strategy
  
  
• Ontario and Quebec:
  • Emphasis is on regulatory complexity, energy costs, and supply‑chain disruption. 87% in Ontario are concerned with government policies, compared to 77% in Quebec, and 87% in Ontario are concerned with energy costs compared to 75% in Quebec. Supply chain bottle necks are an issue in Ontario with 77% expressing concern, while only 56% express concern in Quebec.
    
    
• Atlantic Canada: Flooding, storms, and coastal resilience dominate planning

AI Strengthens Sustainability Planning

AI adoption continues to expand among Canadian firms, particularly for climate‑risk assessment and scenario modeling for extreme weather, reflecting confidence in AI's long‑term strategic value. According to the survey, Canadian business leaders believe AI could be very/somewhat helpful in each of the following:

• Development of climate plan 75%,
• Plan to deal with reputational issues around climate issues 71%,
• Development of concepts for green products in my industry 70%,
• Planning ways to be resilient in the face of extreme weather events 69%.

How BMO Can Help

BMO's Climate Ambition is to be its clients' lead partner in their pursuit of energy and climate resilience.

BMO works with businesses across Canada to help translate sustainability and climate‑risk considerations into practical plans that support long‑term resilience and performance. Anchored by the BMO Climate Institute, BMO brings together insights across science, policy, finance, and economics to help clients better understand climate‑related risks and opportunities and incorporate them into strategic decision‑making.

"At BMO we value this type of research because it gives us a clear, data-driven view into how business leaders are responding to climate realities," said Melissa Fifield, Head of the BMO Climate Institute. "By tracking these shifts year over year, we can better support clients as expectations and risks continue to evolve."

Through its Sustainable Finance and Enterprise Sustainable Finance Solutions teams, BMO provides advisory expertise alongside financing solutions that support investments in energy efficiency, infrastructure resilience, and emissions reduction, tailored to a company's size, sector, and geographic exposure. These capabilities span lending, capital markets, risk management, and sustainability‑linked financing, helping clients manage upfront costs while strengthening resilience.

For more information visit: https://capitalmarkets.bmo.com/en/insights/survey-us-and-canadian-business-confidence-in-climate-action-remains-strong

About BMO Financial Group

BMO Financial Group is the eighth largest bank in North America by assets, with total assets of $1.5 trillion as of January 31, 2026. Serving clients for 200 years and counting, BMO is a diverse team of highly engaged employees providing a broad range of personal and commercial banking, wealth management, global markets and investment banking products and services to approximately 13 million clients across Canada, the United States, and in select markets globally. Driven by a single purpose, to Boldly Grow the Good in business and life, BMO is committed to driving positive change in the world, and making progress for a thriving economy, sustainable future, and stronger communities.    

SOURCE BMO Financial Group