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Intact Financial CEO Charles Brindamour said his industry is already seeing the impact of global warming in the increasing frequency of severe storms and changing weather patterns.MIKE CASSESE/Reuters

Canada's largest property insurer is launching an effort to persuade homeowners and businesses to batten down the hatches in anticipation of more extreme weather that is expected to result from climate change.

Intact Financial Corp. is also making changes to its own operations as it copes with the increased occurrence of severe storms, which now routinely cost the industry $1-billion in insured damages in Canada. The company will soon offer property owners coverage for damages from "overland flooding" – though such policies won't be available to those homeowners and businesses located in the country's most flood-prone locations.

As world leaders meet in Paris Monday for the start of the United Nations climate summit, executives from Intact Financial and researchers from the University of Waterloo will gather in Toronto to launch the Intact Centre for Climate Adaptation. The centre will conduct research and work with Canadians – both property owners and corporations – on practical measures to reduce risks posed by climate change and extreme weather. Intact will provide $4.25-million over five years.

Intact chief executive Charles Brindamour said his industry is already seeing the impact of global warming in the increasing frequency of severe storms and changing weather patterns. "Given that we are on the front line, we thought we ought to find a way to help cities, provinces and the country deal with it, beyond the insurance issue," Mr. Brindamour said in an interview. "Because it is so big and it's happening and the change is very clear."

Corporate executives and their boards are increasingly required to assess the potential impact that changing climate could have on their operations and business models. Institutional shareholders are demanding that companies – especially large energy companies – outline their carbon risk. In a recent speech, Bank of England Governor Mark Carney warned that climate change could in future undermine financial stability.

The international Financial Stability Board, headed by Mr. Carney, recommended Canada and other Group of 20 countries issue clear guidelines for disclosure of carbon intensity of different assets. The board identified three types of risk that could impact corporations and, especially, the financial sector: physical damage from floods and other extreme weather events; liability claims against companies whom investors feel failed to adequately disclose or mitigate risks; and financial impacts from the transition to a lower-carbon economy.

Federal and provincial governments have largely focused on the need to reduce greenhouse-gas emissions that cause climate change, or mitigation. But it is clear that the global effort is falling short of the goal to limit a temperature increase to 2 degrees Celsius, and adaptation will be required. Scientists warn that even if the 2-degree target is achieved, the world will face disruptive weather that includes severe droughts, rising sea levels and more intense storms.

"We need to build on the current environment and create a sense of urgency around adaptation, and not just mitigation," Mr. Brindamour said. "It's not an either-or situation; we need to do both."

Insured damage from major storms has soared in the past decade and is now averaging around $1-billion a year in Canada, up from around $300-million at the turn of the century. And for every $1 in insurance claims, there is $3 in non-insured economic damage, the Intact CEO said. Only part of that increase can be explained by rising property values, said Blair Feltmate, a University of Waterloo professor who specializes in adaptation to climate change and heads the Intact Centre.

The Intact Centre for Climate Adaptation will work with business associations and companies in mining, utilities, energy production and telecommunications to identify priority actions to reduce their vulnerability.

"I can tell you [Canadian companies] have a very poor handle on the risk that's on their doorstep in reference to climate-change extreme-weather events and how that may disrupt business continuity," Dr. Feltmate said.

In addition to its work with the corporate sector, the centre is pursuing initiatives with individual homeowners and municipalities to prevent flooding. It is launching a Home Adaptation Audit in which inspectors will recommend low-cost, practical changes a homeowner can make to prevent basement flooding. The centre expects to announce a partnership with a large Ontario city that will be the first to offer the program. And it will work with municipalities to protect wetlands from development and reclaim lost areas. Such natural areas – which are often lost when developers build subdivisions – provide crucial flood-control protection by acting as natural storage sites for runoff that is then slowly released into sewers and natural waterways. Dr. Feltmate said the centre aims to develop mechanisms that would provide financial incentives for landowners to preserve wetlands.

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