In an open letter, the alliance of groups spanning diverse sectors makes the case for a “national resilience package” worth $4.1 billion over five years, starting with $820 million for the 2026 financial year. “These investments would save lives, protect the economy, reduce emissions, and strengthen community resilience,” the letter states.

The requested funding would cover increased surveillance and monitoring infrastructure, shared fire-suppression capacity between First Nations and different levels of government, and greater investments in training and equipment.

The campaign was spearheaded by the Council for Clean Capitalism – a multi-industry group coordinated by Corporate Knights since 2012 – and signed by the Canadian Association of Fire Chiefs, Nature Canada, Ducks Unlimited Canada, the Mining Association of Canada, Protect Our Winters Canada and World WIldlife Fund Canada.

“What makes this funding request different from other federal investments in wildfire equipment, training and resilience over the past few years, is the capacity to coordinate these funds in the most appropriate fashion and engage the local fire departments who must respond to fires in their communities,” says Tina Saryeddine, executive director of the Canadian Association of Fire Chiefs.

Multiple government departments and offices were contacted for comment on the letter. The Department of Finance declined to comment on what may be included in the 2025 budget.

Natural Resources Canada (NRCan) wrote in an email that “Wildfires are a global problem, directly attributed to the impacts of climate change, including prolonged drought.” The department says it has committed $800 million for wildland fire resilience since 2019, including $463 million for initiatives announced in the last two years, including $254 million for a multi-year equipment fund.

Through the Canadian Council of Forest Ministers, NRCan says it is working in partnership with provinces and territories to advance a wildland fire-prevention and mitigation strategy that serves as “whole of society approach to reduce wildfire risk and build safer, more resilient communities.”

The scale of the challenge

Canada is already spending heavily on wildfire suppression: more than $1 billion every year, with indirect costs adding another $500 million to that.

But the signatories argue that Canada must dramatically step up its spending if it hopes to respond adequately to the continued increases in wildfire intensity. “Meeting this challenge requires multi-billion-dollar, capital-intensive commitments in surveillance, suppression, and training – not incremental dollars,” the letter states. “Without this scale of investment, suppression capacity will continue to be outstripped by climate-driven fires.”

According to wildfire expert Mike Flannigan, wildfire severity and frequency have quadrupled since the 1970s. Roughly 8% of Canada’s forests have burned since 2023.

Canada’s forests are on fire. Where are the next generation of Canada’s water bombers?

– John Gradek, lecturer, McGill University

The research group at Corporate Knights estimates that wildfires have caused more than $30 billion in economic damages over the past five years, including business losses, property destruction and health system impacts. In 2023, during the most destructive fire season on record, 98% of Canadians were exposed to hazardous “smoke days” from wildfires. During that year in Ontario alone, health damages surpassed $1 billion in a single week.

Canadian wildfires also contribute substantially to global warming, with wildfire emissions now averaging 600 million tonnes annually, according to calculations by Corporate Knights researchers. Much of those emissions come from peatlands that release ancient carbon when they burn, accelerating climate change.

Canada’s fire funding

Canada’s capacity to fight wildfires is stretched thin. For significant parts of the 2023 and 2025 fire seasons, Canada was at National Preparedness Level 5 (NPL5), meaning that nearly all of the country’s domestic resources were maxed out.

The federal government’s recent investments in fighting wildfires have been comparatively small, despite the severe strain on firefighters, who say that they are understaffed and overworked and that they lack adequate equipment like water bombers. A Toronto Star investigation found that there are 100 fewer wildfire fighters in Ontario than there were 10 years ago.

“As resources dwindle, you just kind of start getting into that mindset of like, ‘OK, well, we have to figure out a way to make this work,’” Noah Freedman, a wildfire crew leader in northwestern Ontario, told CBC in July. “And the more we do that, the more we kind of push those limits, especially with the lack of experience that we have – that’s when mistakes start happening.”

In March, the federal government announced a $16.3-million investment over the next three years to train firefighters under its Fighting and Managing Wildfires in a Changing Climate (FMWCC) program. The new funding covers 25 projects across the country.

Wildfire season used to last three or four months, but the drier, hotter, windier conditions associated with climate change have extended it.

– Marco Lizotte, wildland firefighter

FMWCC was launched in 2022 with $346.1 million over five years, and all that money has been awarded. Likewise, Natural Resources Canada launched a Wildfire Resilient Futures Initiative in 2023 that was worth $285 million, which has also already been awarded.

The Emergency Management Assistance Program has a funding stream called FireSmart, which provides money to First Nations to help them prevent and prepare against wildland fires.

Areas of investment

Among the recommendations in the letter, the signatories are seeking $400 million over five years to improve wildfire surveillance. While Canada will launch a dedicated satellite for this purpose in 2029, a complementary and continuous surveillance layer is also required, they argue. Such a system would include wildfire detection drones, high-frequency satellite feeds and support for Indigenous fire guardians.

The Canadian Association of Fire Chiefs emphasizes the importance of establishing a national fire administration that would “integrate fire and life safety considerations into federal policy, strengthen prevention, and improve the federal response to emergencies.”  Such an administration would complement rather than replace the existing Canadian Interagency Forest Fire Centre, whose role is to coordinate wildfire agencies at the provincial and territorial level.

The groups signed on to the letter are also seeking $2.5 billion over five years to expand and modernize aerial and ground fleets. “Canada’s forests are on fire. Where are the next generation of Canada’s water bombers?” says John Gradek, a lecturer on aviation management at McGill University, in an email. “Production stopped in 2016 . . . leaving us with an aging fleet ill-suited for today’s wildfire demand. We need 40 to 50 new water bombers to meet the scale and severity of modern wildfire seasons.”

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The letter also seeks investment of $1.2 billion over five years to scale up training and equipment programs. New recruits face physical dangers and extreme conditions.

“The expectations on Canada’s firefighters have risen dramatically in the last decade,” writes Marco Lizotte, a wildland firefighter in Northern Ontario, in an account for Maclean’s. “Wildfire season used to last three or four months, but the drier, hotter, windier conditions associated with climate change have extended it.”

A separate delegation unrelated to the letter campaign is travelling to Ottawa to call for stronger wildfire response, Marco Chown Oved reports in the Toronto Star. “These are not the kind of fires we used to fight,” Adam Lynes-Ford, who is leading the delegation, said. “These are fires of a different scale. This is a challenge of a different scale. We need a different-scale approach.”

*Updated with comments from Natural Resources Canada

** This article was amended to include the Canadian Association of Fire Chief as signatories to the campaign, as well as a quote by executive director Tina Saryeddine and more information about the proposed national fire administration. 

Mark Mann is the managing editor at Corporate Knights. He is based in Montreal.

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This summer has been historically destructive. Climate-change-driven wildfires continue to burn across the country. As of this writing, more than 8.7 million hectares have been scorched – an area about 2.5 times that of Vancouver Island – the second-worst year in Canadian history. Smoke from these wildfires ensured that the effects of the fires were felt in terms of degraded air quality hundreds of kilometres away. Drought affected many parts of the country, with southern Ontario, where I live, receiving virtually no rain in July and August.

Aside from the sheer scale of the devastation, the real significance of the past few months is what it augurs for the future. The summer of 2023, the worst wildfire season in our country’s history, prompted a flurry of surprised reactions. When the summer of 2024 wasn’t quite so bad, many people breathed a sigh of relief. But this past summer makes clear that 2023 wasn’t a one-off: the flames came roaring back. The trend is now clear, and we need stronger, faster action to keep Canadians and their communities safer. The only way to do this is to reduce greenhouse gas emissions and to invest in improved climate-proof infrastructure.

Canada’s summer of wildfire isn’t unusual. Countries all over the world experienced something similar. In most places, governments have quite logically focused on necessary solutions and are doubling down on decarbonization and preparing for a future of worsening climate impacts. As one example, the European Union is locking in a plan to achieve a 90% reduction in climate-changing pollution by 2040.

In North America, however, we are overwhelmed with media coverage of Donald Trump’s vendetta against all things climate-related. There is no logic to this: in fact, Trump’s hatred of wind turbines apparently originated with a personal dispute related to his Scottish golf course.

With the U.S. federal government backing away from action on climate change (though it needs to be underlined that many U.S. states are staying the course on net-zero), there are some Canadian voices saying we should just fall in line with Trump’s retrograde agenda.

I’m confident that the vast majority of Canadians understand the folly of doing this. Canadians know that Donald Trump has terrible ideas. Terrible ideas on Ukraine. Terrible ideas on tariffs. And terrible ideas on climate change.

A much better approach is to skate to where the puck is headed globally. If you look at the current and contemplated climate change policies of all the other countries with which Canada needs to diversify its trade, they’re pointing in the opposite direction to that which Trump is laying out.

More than four months ago, the current federal government was elected on a very strong and explicit climate change platform. In the intervening period, it has given Canadians very little sense of how it wants to take the nation’s climate policy forward. That vacuum, unfortunately, has encouraged vested interests to surface endless cockamamie arguments as to why our country should give up on the fight against global warming completely.

The next parliamentary session is the moment to reset and relaunch Canada’s decarbonization journey.

The priorities are clear. A handful of laws, both existing and new, are necessary to move us forward, including fixing our system of industrial carbon pricing, nailing down new regulations to reduce methane pollution, building more clean electricity and getting more affordable electric vehicles into the hands of Canadians.

We need renewed progress on climate change that works for Canadians, not for Donald Trump. And we need it quickly.

Rick Smith is president of the Canadian Climate Institute, the co-author of two bestselling books on the effects of pollution on human health, and the executive producer of Plastic People, a 2024 documentary chronicling the damage done by microplastics in the human body.

The post A fork in the road for the Canadian climate change discussion appeared first on Corporate Knights.

The most recent is the heartbreaking tragedy that has taken the lives of more than 100 people in Texas due to one-in-1,000-year flash flooding. That includes the lives of 27 children and counsellors at a local girls’ summer camp. 

Here in Canada, we are still in the midst of a devastating wildfire season on track to be the second worst on record. It has left communities across the country – especially remote, northern and Indigenous communities – fleeing for safety or anxiously living in fear of what their future holds. It has cast enormous clouds of suffocating smoke on major urban centres in Canada and the United States, similar to what happened during 2023’s record-smashing wildfire season. 

And, of course, last July we nearly lost the entire town of Jasper to inferno, and this past January Los Angeles stared down catastrophic wildfires.

I could go on. But the point is that in each of these all-too-common events there is immediate and incalculable human tragedy and suffering. People’s lives are upended, they lose those most dear to them, or they are forever changed in some meaningful way. 

And there is climate change. 

Natural disasters are where the typically bloodless, scientific term of “climate change” meets reality. They are the front lines of an even larger human tragedy that is playing out before our eyes, almost in slow motion. I say “almost” because these disasters keep piling up quickly as the heating of the planet accelerates. 

We need to fully acknowledge both realities – both the immediate human impact and the underlying driver of climate change – and do so within a limited time window when media and the public are most attuned.

The question is: what to do about it? And how do we talk about these events in a way that respects the personal tragedy while being clear-eyed about the accelerating force of climate change?

Striking a delicate balance

At the top of the to-do list is rapidly reducing the amount of carbon pollution we send into the air and building a cleaner economy. We can also take a litany of actions to protect our communities and make sure we are better prepared for future disasters. 

Doing both at the same time will dramatically save costs and reduce human impacts, as the Canadian Climate Institute has shown in great detail. (The institute has even set up an online tool to track recent climate-related costs from extreme weather in Canada.) 

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But part of the conundrum is about helping people gain a more visceral understanding of the reality we all face. Are people internalizing the link between these tragic events and climate change? It’s an important question because outside of these disasters, the reality of climate change can be much less impactful, often expressed in the more abstract language of science or policy. 

The answer seems to be that yes, a majority of Canadians are still making the connection between extreme weather and climate change, particularly with wildfire. But that’s despite a lack of media coverage linking the two. In fact, only 16% of Canadian news stories about wildfires explicitly named the connection to climate change, according to recent analysis. Much more needs to be done to make it clear that the two are inseparable.

For people working to accelerate policy change, that means it’s critical that we help make those connections. We need to fully acknowledge both realities – both the immediate human impact and the underlying driver of climate change – and do so within a limited time window when media and the public are most attuned.

To do so is not “politicizing” the weather or wildfires, as some have claimed. Of course, we need to treat the victims with great empathy. But we cannot let the moment pass without tying together symptom and cause.

Anything less risks exacerbating the current path we’re on and inviting even more danger. Future disasters will become worse and more frequent. These unspeakable tragedies will continue with the root of the problem left unspoken. And the public will remain in the dark about the true emergency we face, with climate change threatening even greater destruction in the future. 

Rick Smith is president of the Canadian Climate Institute, the co-author of two bestselling books on the effects of pollution on human health, and the executive producer of Plastic People, a 2024 documentary chronicling the damage done by microplastics in the human body.

The post Climate disasters demand respect, but we can’t be quiet about their causes appeared first on Corporate Knights.

In fact, the new government was elected on a strong platform for climate action that buttresses affordability, security and competitiveness in a world shaken by these new uncertainties. Meeting this economic moment will require building on Canada’s strengths and policy successes, as well as working together with provinces and territories.

With that in mind, here are our suggestions for top priorities in the new government’s first 100 days.

First, strengthen industrial carbon pricing. Industrial carbon pricing is Canada’s single most powerful policy tool for reducing emissions and protecting industrial competitiveness, all at minimal cost to households. But it needs improvement. The Canadian Climate Institute’s extensive research on these systems shows they can reduce more emissions and give investors greater certainty if they are modernized to be more stringent, more transparent and better aligned across the country. The federal government has a crucial role to play in these efforts because it writes the minimum standards that underpin provincial systems across the country. It’s time those standards were updated.

Second, finalize methane regulations for oil and gas. Cutting emissions of methane – a particularly potent greenhouse gas – is a good-news story. We know how to reduce these emissions that are released in oil and gas production and pipeline transport, and doing so is cost-effective. In fact, Saskatchewan, Alberta and British Columbia have already slashed these powerful emissions by more than half in less than a decade. The last federal government almost finished this work with draft regulations released last summer that would require methane emissions associated with oil and gas to drop 75% by 2030. Thanks to shared federal-provincial action, the oil and gas sector is already well on its way to meeting this target. Our modelling has shown that Canada can go even further to reach 80% – and the government should consider doing so. Some provinces have already taken steps toward stronger action. British Columbia, for example, has committed to near zero methane from all industrial activities by 2035.

Third, finalize the clean electricity investment tax credit (ITC). Electrifying Canada’s economy with clean power will underpin the country’s success in reducing national emissions and attracting investment. That means a big build-out of intra- and interprovincial electricity infrastructure, but it will also require investment incentives like the ITCs. While the other federal ITCs were put into law last summer, the clean electricity ITC is still pending. Finalizing this long-promised policy will benefit all provinces and territories as they clean up their grids with billions in new investment support, all of which will ultimately help keep energy bills down. The clean electricity ITC is also the only one of its kind to make tax-exempt entities eligible, which will incentivize investors including First Nations, municipalities and pension funds.

Finally, establish a made-in-Canada climate taxonomy for the financial sector. Investment decisions are being shaped by climate change more than ever before, whether from disrupted supply chains, higher costs from more frequent and severe climate impacts, or rapid shifts in clean-energy and technology costs. A national climate taxonomy – a well-defined set of criteria to determine which activities and assets contribute to climate objectives – will give investors the standardized approach they need to evaluate these material risks and opportunities against their bottom lines. This type of policy is already in place or under development in more than 30 jurisdictions around the world. Ultimately, a climate taxonomy will enhance our country’s ability to attract investment. The federal government endorsed the approach recommended by Canada’s largest financial institutions last fall, which included a world-leading framework to classify emissions-intensive activities on the path to net-zero. The next step is to establish an independent body with stable funding to deliver this much-needed market guidance.

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Taken together, these four actions will help build on previous policy wins that have driven national emissions down to where they were in the 1990s – more than 8% below 2005 levels at last count. There is still significant work ahead to set Canada up for success in a world economy rapidly adjusting to new trade disruptions while the inevitable shift toward clean energy technologies continues to gather pace globally. While combatting climate change is a multi-decade endeavour, there is much that Canada can do right away. The next 100 days is plenty of time to implement the four actions we believe should sit atop the list of the new government’s climate priorities.

Rick Smith and Peter Nicholson are, respectively, president and chair of the board of the Canadian Climate Institute.

The post These should be the climate change priorities for Canada’s new government appeared first on Corporate Knights.

But the very thing that makes them such an amazing climate solution is also their biggest challenge. A common refrigerant called R-410A pumps through their innards so they can warm and cool homes and offices and anything else. But that refrigerant is also liquid irony, as it can escape as a greenhouse gas 2,000 times more powerful than carbon dioxide. (This is known as its “global warming potential,” or how much energy a ton of the gas absorbs over a given amount of time compared to the same amount of carbon dioxide.) Leaks can happen during the installation, operation and disposal of heat pumps.

But this year the industry is rolling out alternative refrigerant formulations like R-454B and R-32, which have around 75% less global warming potential. That’s in response to Environmental Protection Agency rules mandating that, starting this year, heat pump refrigerants have a global warming potential of no more than 700. Manufacturers are looking even farther ahead at the possibility of using propane, or even carbon dioxide, as the next generation of more atmospherically friendly refrigerants.

“The whole industry is going to be transitioning away from R-410A, so that’s good,” said Jeff Stewart, the refrigeration chief engineer for residential heating, ventilation and air conditioning at Trane Technologies, which makes heat pumps and gas furnaces. “We’re getting lower global warming potential. The problem is, it still has some, right? So there’s concern about ‘OK, is that low enough to really help the environment?’”

To be clear, heat pumps do not release greenhouse gases at anywhere near the scale of burning natural gas to heat homes, so their environmental impact is much smaller. “Even if we lost all the refrigerant, it still actually has a much smaller effect just having a heat pump and not burning gas,” said Matthew Knoll, co-founder and chief technology officer at California-based Quilt, which builds heat pump systems for homes. “I would actually want to make sure that doesn’t hamper the rapid adoption of heat pumps.”

But why does a heat pump need refrigerant? Well, to transfer heat. By changing the state of the liquid to a gas, then compressing it, the appliance absorbs heat from even very cold outdoor air and moves it indoors. Then in the summer, the process reverses to work like a traditional air conditioner.

The potential for refrigerant leaks is much smaller if the heat pump is properly manufactured, installed and maintained. When a manufacturer switches refrigerants, the basic operation of the heat pump stays the same. But some formulations operate at different pressures, meaning they’ll need slightly different sized components and perhaps stronger materials. “It’s all the same fundamental principles,” said Vince Romanin, CEO of San Francisco–based Gradient, which makes heat pumps that slip over window sills. “But it does take a re-engineering and a recertification of all of these components.”

While Trane has transitioned to R-454B, Gradient and other companies are adopting R-32, which has a global warming potential of 675 and brings it in line with the new regulations. Gradient says that with engineering improvements, like hermetic sealing that makes it harder for refrigerants to escape, and by properly recycling its appliances, it can reduce the climate footprint of heat pumps by 95%. “Our math shows R-32, plus good refrigerant management, those two things combined solve almost all of the refrigerant problem,” Romanin said. “Because of that data, Gradient believes the industry should stay on R-32 until we’re ready for natural refrigerants.”

Those include carbon dioxide, butane and propane. Carbon dioxide has a global warming potential of just 1, but it works at much higher pressures, which requires thicker tubes and compressors. It’s also less efficient in hot weather, meaning it’s not the best option for a heat pump in cooling mode in the summer.

Propane, on the other hand, excels in different conditions and operates at a lower pressure than the refrigerants it would replace. It also has a global warming potential of just 3. Propane is flammable, of course, but heat pumps can run it safely by separating sources of ignition, like electrical components, from the refrigerant compartments. “It is kind of perfect for heat pumps,” said Richard Gerbe, board member and technical advisor at Italy-based Aermec, another maker of heat pumps.

That’s why Europe is already switching to propane, and why the United States may soon follow, Gerbe said. A typical heat pump will run about 10 pounds of propane, less than what’s found in a barbecue tank. Gas furnaces and stoves, by contrast, are constantly fed with flammable natural gas that can leak, potentially leading to explosions or carbon monoxide poisoning. “If you’ve got a comfort level with a gas stove in your house,” Gerbe said, “this is significantly less of a source.”

This article originally appeared in Grist. It has been edited to conform with Corporate Knights style. Grist is a non-profit, independent media organization dedicated to telling stories of climate solutions and a just future. 

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For nearly 500 years, whenever things have gone very badly – a storm sank your ship, say, or a drought killed your crops – and the normal course of business has been unforeseeably and uncontrollably disrupted, you could always blame your problems on an “act of God.” Dig into nearly any boilerplate contract for goods or services today and you’ll still find an all-purpose divine scapegoat, there to take the heat for catastrophes that no one could have reasonably anticipated or prevented. 

It’s a good system: when shit happens, blame God. Now that we’ve pumped a few trillion tonnes of greenhouse gases into the atmosphere, however, God has grown less reliable as a fall guy. Courts rely on historical weather data to determine foreseeability when assessing act-of-God claims, but in the era of climate change, much of that data is no longer accurate. “You can’t keep calling things hundred-year floods when you have them three years in a row,” points out Richard Reizen, a partner at Gould & Ratner and chair of the firm’s construction practice. 

In recent years, many lawyers like Reizen have called attention to the intrinsic tension in force majeure provisions – “force majeure” is a broader category of calamities that encompasses acts of God and includes things like war and strife – as the direct impacts of climate change add new layers of uncertainty across many sectors, while also opening doors to new opportunities for investment. 

Construction isn’t the only industry where natural disasters and weather disruptions have increased the frequency of force majeure claims. “The climate is changing, and the law has to change with it,” says Hannetjie Marais, a legal advisor at Inlexso in South Africa who represents clients in the energy sector, where climate change affects renewables in particular.

Reizen and Marais are part of a cohort of legal professionals helping businesses transition to the new epoch of climate risk, alongside digital innovators in insurance and weather forecasting. Altogether, they are laying the groundwork to unleash the necessary capital for a new economy where climate adaptation and mitigation take centre stage. 

The new force majeure

One way of tracking the increase in force majeure claims is by looking at the number of weather events with more than a billion dollars in damages, as the two tend to correlate closely, says William Droze, a partner at Troutman Pepper, a U.S.-based law firm. Data from the National Centers for Environmental Information shows that billion-plus events occurred on average 5.6 times per year in the 1990s, compared to 20.4 times per year over the last half-decade. In 2023, there were 28. 

But the changes to the weather wrought by global warming aren’t all showstoppers like hurricanes and tropical storms. Climate change also alters global weather patterns in ways that aren’t as damaging as headline-making extreme events. Sometimes the wind blows less, not more. 

A 2022 study of the resilience of renewable energy under a changing climate found that, under high-emission scenarios, “wind energy and hydropower production could decrease by as much as 40% in some regions due to climate change.” While other forecasts are less stark – the Intergovernmental Panel on Climate Change has projected that average annual wind speeds could drop by 10% globally by 2100 – there’s no doubt that climate change alters wind patterns in ways that are unevenly distributed. For example, wind energy potential in India fell by 13% from 1980 to 2016 because of rising temperatures in the Indian Ocean. 

The climate is changing and the law has to change with it.

— Hannetjie Marais, legal advisor to Inlexso

Marais says that shifts in weather patterns have also led to disappointing results for wind energy in South Africa. “What we’ve seen happening on the ground is that wind farms are not performing as expected,” she says. That sets the stage for legal disputes and potential appeals to force majeure over missed production targets. “You use 20-year historical wind data to decide what the power curve for a facility is going to be, and suddenly the wind simply stops blowing.” 

Short-term wind droughts also pose an occasional threat. For example, in 2021, plummeting wind contribution forced the United Kingdom to temporarily reignite two mothballed coal plants. But the very next year, Britain’s wind farms produced record power, and its coal plants were ultimately shuttered for good in 2024. 

Long term, hydropower production will fall steeply in some regions where climate change disrupts precipitation patterns, snowmelt dynamics and river flows, says Ahmed Osman, a senior research fellow at Queen’s University Belfast and the lead author of the 2022 study. China and South America will experience declines, and Portugal could see a 41% reduction in hydropower generation by 2050 due to reduced rainfall and reservoir capacity. 

Diversified renewable-power sources across large geographic areas are capable of compensating for temporary wind or rain droughts or missed targets, but investors and operators of renewable projects need to be realistic about the risks. Marais says that for renewables to continue developing, they’re going to need force majeure protections that reflect the reality of a changing climate. “Because of climate change, businesses can no longer rely on historical weather information such as wind data to help develop an accurate financial model,” she explains.

Increasing granularity, greater flexibility

One way that lawyers writing contracts for renewable production and other industries can improve their defences against weather risk is to dig down into the details. “Engineers plan for sea walls and barriers to protect cities from future floods,” write Kristina Kopf Thomas and Briana James of the law firm Eversheds Sutherland. The same must be done for contracts, they argue. “We must look at how contractual provisions intended to address the extraordinary will function in a world where what was once unusual is now less so.” 

The key, Thomas and James say, is to get specific. “Parties relying on boilerplate force majeure clauses may unintentionally find themselves responsible for unwanted risks,” they write. For example, if a builder is contracted to construct a development in a region where hurricanes are occurring more frequently, Thomas and James suggest describing the wind speeds and duration that would excuse delays or nonperformance, rather than hurricanes in general. 

When he’s negotiating a construction deal, Reizen has learned to include “weather days” in the contract. “What I find most effective is to sit down, look at where you’re building, and put down a specific number of weather days that you actually put in the contract so that people can adequately plan,” he says. 

It’s not always the direct impacts of extreme events that cause the greatest problems; sometimes the secondary effects create the most setbacks. “In California, when there’s a forest fire, you’re not just looking at the fact that it could come on your property,” Reizen says. “The bigger risk is air-quality days where, because of fires, people can’t work outside.”

Still, you have to strike a balance, says Mary Mbugua, founder and CEO of Risk Response Africa, a risk-management company in Kenya. Force majeure provisions should be “specific enough to address the risks at hand while also allowing for flexibility due to the uncertainties inherent in climate science.” Mbugua suggests that contracts should allow for adjustments as new scientific data or risk-modelling techniques emerge, as well as include provisions for periodic reviews and updates. 

Hedging climate risk for the renewables market

Carefully written contracts can’t do all the work of protecting investments, and where legal recourse remains uncertain, such as in the wind-power sector, financial instruments can do a lot of the heavy lifting. “You can actually structure financial contracts where you can protect yourself against a downturn of the wind,” says Pascal Storck, head of technology at Vaisala, a global climate-intelligence firm. 

In simple terms, it’s about skimming off the boom times to pay for the bust times. “You want to have a financial hedge where if you have less energy, you’ll have some compensation,” Storck explains. “In order to achieve that, you’re willing to give up some of your revenue in periods of abundance.” 

We must look at how contractual provisions intended to address the extraordinary will function in a world where what was once unusual is now less so.

— Kristina Kopf Thomas and Briana James, Eversheds Sutherland law firm

Energy traders have been making weather-based bets since long before renewables achieved the level of market penetration they have today. Investors in coal, oil and natural gas markets have relied on predictive weather technologies for decades to forecast demand based on temperature. In simple terms, demand goes up in a hot summer or a cold winter, and vice versa. Savvy traders with a good almanac – that is, a service like Speedwell Climate in the United Kingdom, which has provided predictive models to players in these markets since the 1990s – make their bets accordingly. 

Now, energy traders are diversifying their portfolios to include renewables and making bets based not only on demand but on supply. For example, if you know there’s a warm, windy winter on the way, then the value of gas will go down, because people will be burning less for heat and the energy supply from wind power will be greater.

The weather derivatives market, as it’s called, helps answer a fundamental question, according to Storck: “The weather is getting crazy because of the climate, so what do we do about it?” By converting climate risks into investment opportunities, these instruments can help de-risk renewable-power projects and create the stability for more capital to flow into the sector. 

Halting the retreat of insurance

Obviously, insurance providers have a critical role to play in creating protections for climate change, but as the impacts of shifting weather patterns cost more and more, insurance companies are retreating from the markets where they are needed most. 

“The market learns,” says Alex Balcombe, a partner at Harris Balcombe, a U.K.-based insurance claims consultancy. He points to the COVID-19 pandemic, which disrupted supply chains and cost the insurance industry enormously. Afterwards, they stopped covering pandemics. “Insurance companies got their fingers burned massively there, so they’ve learned,” Balcombe says. “You can’t buy insurance for that kind of event anymore.” 

Likewise with climate change, insurers are fleeing areas that are prone to floods, hurricanes and wildfires or charging huge sums for coverage. “These extreme weather events are only occurring on an increasing basis, so there’s certainly a market for cover to be provided, but the question is at what premium and at what level?” Balcombe asks. 

A big part of the answer, Balcombe says, is parametric insurance, a mechanism that converges with the trend toward increasing specificity for weather events in force majeure provisions, and actually serves to simplify coverage. In essence, parametric insurance ties the payout to the event that causes the loss, not the loss itself, and sets a predefined threshold for payment, so there’s no ambiguity or need to negotiate. For example, a factory or warehouse in a flood-prone area might struggle to obtain traditional coverage, but by setting a specific water level to trigger the payment and installing a sensor to verify, they can proceed with adaptations for minor floods and still get coverage for bigger damages. 

“I think parametric insurance is going to become a massive feature, because it’s a much more economic way of doing things, and it gives people certainty,” Balcombe says.

While climate change is dismantling the traditional protections that businesses need, the new solutions are catching up and creating opportunities for companies that are building the post-fossil-fuel economy.

Mark Mann is a Montreal-based journalist and the associate editor at Corporate Knights.

The post Do ‘act of God’ clauses still work in the era of climate change? appeared first on Corporate Knights.

Developed by Prince William and biologist and broadcaster David Attenborough four years ago as a way to build excitement (and investor attention) around planet-saving ideas, the Earthshot Prize gives five environmental innovators £1 million each to grow their vision and impact. The A-list celebs, the televised “green carpet” preshow and the Shark Tank–level cash prizes may be straight out of Hollywood, but the event’s true objective is all business. Not just the five winners, but all 15 finalists become Earthshot “fellows” – eligible to draw on ongoing advisory services and a global funding platform designed to accelerate further growth.

As the prince, wearing white biodegradable sneakers, told the audience in Cape Town, it was a trip to Namibia in 2018 to study the illegal wildlife trade that helped him recognize “the power of how innovative, positive solutions to environmental problems could drive transformative change for humans and nature.”

This year’s winners were a mix of scrappy grassroots groups, start-ups and multinational deal-makers. In the “Clean Our Air” category, the winner was the youth-led advocacy group Green Africa Youth Organization (GAYO), based in Accra, Ghana. In communities where inadequate waste-management systems mean that most garbage is simply burned – including mountains of car tires and electronic waste – GAYO is promoting the no-waste movement. Through education and innovation, and savvy lobbying, GAYO has set up youth-run sorting centres where trash is separated and reused, reducing pollution while creating more than 700 jobs. GAYO is also involved in sustainable agriculture, disaster risk reduction and renewable energy. With a team of 150 employees in four countries, founder Desmond Alugnoa says that “the aim is to create a sustainable circular economy across Africa.” In addition to its 150 employees, GAYO has trained more than 5,000 people to upcycle waste and make a living by selling products such as compost and charcoal briquettes.

The Altyn Dala Conservation Initiative in Kazakhstan set out to preserve the “Golden Steppe,” the grassy plains of central Asia. Overgrazing, agriculture, a shifting climate, poaching and disease have affected many species in this crucial migration corridor, but none more than the saiga antelope, whose numbers dipped from the millions to as few as 20,000 in 2003. By restoring and protecting five million hectares and using ranger teams and aerial patrols to combat poaching, Altyn Dala has helped the saiga population bounce back to 2.8 million. Its work has also resulted in the formation of new national parks and a burgeoning ecotourism industry. The group plans to put its prize money toward doing the same for kulan (wild asses), ertagy (wild Przewalski’s horses) and steppe eagles.

Some Earthshot Prize winners are more global in scope, including the multinational organization that helped secure the “30×30” target, calling for the effective protection and management of 30% of the world’s land and water by 2030, signed by delegates of the 2022 UN biodiversity conference in Montreal. Co-chaired by Costa Rica and France, the High Ambition Coalition for Nature and People (HAC for N&P) gives governments the tools they need to protect more spaces, write their commitments into law and overcome financial and technical barriers to action. HAC for N&P says its efforts have helped 50 member countries enact or strengthen conservation laws. The organization puts special emphasis on protecting ocean waters, since member countries are further ahead on designating conservation lands than on protecting marine ecosystems – which helped HAC for N&P secure Earthshot’s “Revive Our Oceans” award.

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The winner of the “Build a Waste-Free World” prize was Nairobi-based Keep IT Cool (KIC), whose sustainable refrigeration system helps underserved smallholder fishers in Kenya and Uganda reduce spoilage and increase their revenues. KIC works with fishing cooperatives on Lake Victoria and the desert Lake Turkana, where fishers can take two days to collect a catch big enough to transport to market. At fish landing points, KIC now provides solar-powered icemakers and cold-storage units that have cut spoilage and food waste by 98%.

The “Fix Our Climate” finalist was Advanced Thermovoltaic Systems (ATS) of Fort Collins, Colorado, which has developed a simple, safe process to help heavy industries turn waste heat into electricity. Founder Kelly Adams says that current turbine-based recovery systems capture only 40% of waste heat; his company’s container-sized units use modern materials technology to generate electricity from even low levels of heat. What’s more, they use no moving parts, require little maintenance and can be run from an iPhone. ATS hopes to be operational in more than 100 plant sites by 2030, saving 3.5 million tonnes of carbon dioxide.

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It was a sunny Saturday, and my co-adventurer and I had paddled through the shimmering waters of Georgian Bay and landed on the distant Beckwith Island, home to beautiful sand beaches on Lake Huron. I had glanced at the weather, noting that a lightning storm was expected to roll in the next day (which we had planned to avoid), but I neglected to check the prevailing wind currents.

Around 4 a.m., I awoke to 50-kilometre-per-hour winds battering the tent and quickly pulled up the wind charts on my trusty BlackBerry. To my dismay, the high winds would hold steady for the next 48 hours.

This was a bit of a problem. I needed to be back in Toronto to present our latest sustainable investment research to attendees at a summit hosted by the Principles for Responsible Investment, whose signatories manage US$121 trillion in assets. 

We tried calling a water taxi, but none were seaworthy in the high winds. So we called members of the Beausoleil First Nation, on whose territory we were trespassing (albeit lightly and with great awe). Sue, who runs the Bayshore Variety, Video & Restaurant on Christian Island, answered the phone and said to give her 10 minutes. Constable Elijah from the Anishinabek Police Service quickly called me back. I confessed our trespasses, but her focus was getting us to safety. A half hour later, a large sturdy Ontario Provincial Police ship motored into the bay to ferry us back to the mainland.

It hit home that we are all in this together, and the human instinct when someone is in harm’s way is to help.

We are all in harm’s way when it comes to the floods, fires and sweltering heat brought by extreme climate change. People, governments and businesses are doing more than we tend to appreciate to get us out of this climate conundrum – which is why more than twice as much clean energy was added to the global mix the past few years compared to conventional energy.

But it isn’t fast enough.

Just like I got distracted by the lightning storm and failed to take note of the prevailing wind patterns, as a society we pay too much attention to the storms and flashes of the political economy, unaware of the prevailing winds of the real economy.

Let’s be clear here: the sustainable clean energy economy is experiencing exponential growth. It is going parabolic because most clean technology options are superior and only getting better.

Corporate Knights data shows that for the large companies that make up 80% of global market capitalization, sustainable revenues and capital expenditures are growing more than twice as fast as everything else over the past five years. This trend holds across sectors and regions and puts the sustainable economy on a path to dominate the global economy by the end of the next decade.

People bay at the moon for political leadership, but it didn’t seem to matter who was president of the United States the past eight years when it comes to this sector. Oil and gas continued to rise under both administrations, yes, but there was no stopping the clean economy, regardless of rhetoric at the top. Clean energy investment surged under Trump and Biden, comprising the bulk of all energy investment under both guys in each of their last years in office, according to data from Clean Investment Monitor and the International Energy Agency’s World Energy Investment. 

While the die is cast on the direction of travel of our global economy, we can speed it up.

Rather than climate transition plans, we need economic transition plans focused on the high-growth areas of our economy – and the climate solutions (the highest-growth part of the economy) will come along for the ride. The main business association in Europe (BusinessEurope) recently embraced this logic, as did the Business Council of Australia a few years ago.

These business associations have critical roles to play in setting the parameters for what is seen as politically possible, and both the U.S. and Canada would do well to get on board.

Roughly 150 countries have set a goal for net-zero, and this target is now backed by financial players representing $150 trillion in combined assets (a 30-fold increase over the past four years). Paraphrasing former governor of the Bank of Canada Mark Carney, when society sets a clear goal and technology makes it possible, it becomes increasingly profitable to become part of the solution and increasingly costly to be part of the problem.

That’s where we are right now. If we want to deploy these climate solutions to power and move our economies, there are some basic things we need to do.

Number one: stop gridlocking renewable-energy potential by updating energy-regulator mandates to focus on rapid permitting and shortening the grid-connection queue. According to the IEA, 1,650 gigawatts (more than double the 666 GW added this year) of clean energy capacity in advanced development stages is waiting for grid connections.

Number two: stop allowing incumbents from the fossil fuel sector (including those with vested interest in dragging out the decline of the internal combustion engine economy) to weaponize our fears about losing jobs (subsidized to the tune of $10 million per job) to China, delaying inevitable balance-sheet write-downs. It does not serve our interest to make trade in low-carbon goods and services a political football.

Number three: start spending more public money now. While the private sector will provide the dominant supply of capital in the latter half of the race to net-zero by 2050, publicly sourced money will be necessary to close the climate investment gap (which sits around 5% of GDP) between now and 2030.

With technology on our side, staying in touch with the prevailing economic winds, and the public purse to help us through choppy waters, blue skies are ahead.

Toby Heaps is co-founder and publisher of Corporate Knights. 

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A growing number of video games, such as Horizon and Terra Nil, have themes or plots related to the climate crisis. Researchers say that the medium has huge potential to educate gamers and help galvanize them to take action on the greatest threat to humanity.

A recent study by researchers at Yale University shows that video game players are slightly more likely than the general public to view collective action on climate action positively, ­busting the stereotype that gamers are merely apathetic teenagers sitting in their parents’ basements. They’ve even been pushing the emissions-intensive gaming industry to clean up its act.

Given that there are more than three billion people playing video games in the world, whether on consoles, computers or smartphones, the medium offers a vast pool to target for communications professionals working in the climate space. “Games create engaging and immersive worlds. So they’re a really great way to bring people in to start that conversation about climate change,” says Jennifer Carman, one of the study’s authors and a deputy research manager with the Yale Program on Climate Change Communication.

The social aspect of video games (whether they’re played with other people online or in person) can help start conversations about things portrayed in games that are actually happening in the real world. And that social aspect can also help galvanize action.

This can be seen in the world of video game streamers (online personalities who broadcast themselves playing games online), where influencers such as Jimmy Donaldson (also known as MrBeast) and Mark Rober have spread the word about the climate crisis and used their platforms to fundraise for environmental causes. For Donaldson, that meant launching fundraising campaigns that have raised more than US$23 million for a tree-planting initiative called Arbor Day Foundation and more than US$30 million for Ocean Conservancy and The Ocean Cleanup.

Researchers say that players can also develop a feeling of control in games they don’t get from other mediums, as they make decisions that drive the narrative forward. “I think having that sense of agency in a game [and] looking at a real-world topic can give you the belief that you have made a difference in a game, and you can do that in the real world, too,” says Marina Psaros, a co-author of the study, who used to be the head of sustainability at Unity Technologies.

Video game studios have increasingly injected narratives about climate change into popular games. A separate Yale survey found that 22% of video game players surveyed had come across some kind of climate change–related content in games in the previous 12 months and that 63% of them said they feel a personal sense of responsibility to help tackle global warming. When it comes to taking action, 43% said they have refused to buy the products of companies that have opposed strong climate policies.

Pushing for corporate action

In turn, the industry is starting to take its own emissions more seriously. The data centres that support online gaming and the semiconductor chips used in video games eat up a lot of energy. In 2019, the gaming industry emitted an estimated 24 million tonnes of carbon dioxide in the United States alone – which was the carbon footprint of the entire nation of Mongolia that year.

Among the companies that have been working to lower their emissions is Epic Games. The company has made some changes in its popular game Fortnite that it says will reduce the global electricity use of the game by 200 megawatt hours per day. Many of the large tech companies that manufacture games and consoles, such as Microsoft, Apple and Google, have committed to reaching net-zero by 2030. Other companies have less ambitious targets. Sony has pledged to be net-zero by 2040, and Activision says it will reach that target by 2050.

While the industry’s carbon footprint is a work in progress, green themes are proliferating. So much so that the United Nations Environment Programme (UNEP) has recognized the power of video games as a communications tool to spread environmental messages. Every year since 2020, UNEP has held what it calls the Green Game Jam that challenges video game creators to inject a particular environmental theme into their games. The developers of popular smartphone games like Angry Birds, Boom Beach and even Pac-Man participated.

Carman says that it’s important for communications professionals not to get stuck on the traditional audiences for climate messaging and that video gaming can at the very least prompt people to talk about the climate crisis. “It can start those conversations that can prompt people to take action, and that’s what we want people to do,” she says.

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