Wildfire seasons and billion-dollar storms aren't shaking corporate resolve, BMO reveals
Nine out of ten business leaders across Canada and the United States who have formal climate strategies in place say those efforts are producing meaningful results. And the share of companies with such plans is still growing, according to new survey data from the BMO Climate Institute.
The fourth edition of the BMO Climate Institute Business Leaders Survey, conducted in January 2026 with 741 senior executives (370 in Canada and 371 in the US) found that 73% of respondents either have or are in the process of building plans to manage climate-related risks and opportunities, up from 69% the year before.
In Canada alone, that figure jumped to 78%, compared with 66% in 2025; a 12-point swing showing a meaningful acceleration in corporate planning.
Overall confidence that climate strategies are actually moving the needle rose for the second year running, reaching 91% in 2026, up from 88% in 2025 and 84% in 2023. The trajectory points to something broader than box-ticking: companies are increasingly treating climate strategy as a performance lever rather than a compliance exercise.
"An overall rising trend in confidence has coincided with a view among some companies that taking climate action has a positive commercial impact," said Melissa Fifield, Head of the BMO Climate Institute.
Roughly 30% of North American respondents said they pursue climate action so their organization can operate more efficiently, and 27% said it makes their business more profitable. It’s a modest increase from earlier survey years, but part of a consistent upward trend.
Three in ten Canadian organizations now have a formal process for tracking and managing supply-chain emissions, up from 24% and 20% respectively in 2023. Meanwhile, 41% of Canadian companies are folding environmental considerations into financial decision-making, compared with 25% and 22% three years ago.
Physical risk
Physical climate risk is a major reason executives are paying closer attention. Extreme and unpredictable weather ranked as the top climate-related concern for the businesses surveyed, with 28% of respondents naming it their primary worry, ahead of regulatory requirements at 16% and supply and demand for materials at 15%.
This comes as the US recorded its third-highest number of billion-dollar disasters on record in 2025, while Canada endured its second-worst wildfire season in terms of total area burned.
Executives most concerned about weather volatility were also more likely to report that their companies are already absorbing higher energy costs, dealing with deteriorating infrastructure, and contending with the effects of carbon pricing. In Western Canada specifically, 67% of business leaders flagged extreme weather as a concern, and 81% expressed worry about infrastructure challenges.
Financial constraints
Despite the rising confidence, financial constraints remain stubborn. Cost has ranked as the top obstacle to effective climate planning for three consecutive survey years.
The pinch is felt more acutely in Canada, where 38% of business leaders cited cost as a barrier, compared with 25% in the US. Canadian companies also reported greater sensitivity to carbon pricing and the elevated price tags attached to low- and zero-carbon products.
On the energy cost front, US executives are feeling the squeeze more intensely at the moment — 48% described themselves as "very concerned" about rising energy prices, versus 42% of their Canadian counterparts, reflecting surging wholesale electricity demand.
A striking 83% of survey respondents said they would be interested in financial incentives linked to climate targets, underscoring the ongoing role that banks and lenders can play in helping companies bridge the gap between ambition and execution.
Can AI help?
Artificial intelligence is emerging as another piece of the puzzle. Three-fifths of all respondents said AI is already woven into their daily operations or climate planning, either as a core component or applied where practical.
Adoption is slightly further along in the US, where 66% of business leaders reported using AI in operations, compared with 57% in Canada. Looking ahead, 62% of respondents across both countries expect their companies' AI investment to increase over the next year.
The survey found that Canadian business leaders believe AI could be helpful across a range of climate-related functions; 75% said it could assist in developing a climate plan, 71% in managing reputational risks around climate, 70% in conceptualizing green products, and 69% in planning for extreme weather resilience.
Executives most worried about physical weather risks were also the most enthusiastic about AI's potential, both for building climate plans and for strengthening organizational resilience.
Looking at what might push companies to do more, respondents pointed to regulatory shifts (47%), evolving customer expectations (43%), and competitive pressure from peers (38%) as the likeliest catalysts for expanded climate action over the coming year.
Notably, those same forces were far less likely to be seen as reasons to pull back — suggesting the external environment is broadly reinforcing corporate climate activity rather than complicating it.
"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," Fifield said. "By tracking these shifts year over year, we can better support clients as expectations and risks continue to evolve."
