Confronting the climate crisis: Co-operative solutions for challenging times

We often talk about climate change at a planetary level. Headlines focus on rising temperatures, shifting weather patterns, and global emissions targets. But for Canadian communities, the impacts are immediate and local. They show up in flooded basements, encroaching wildfires, heatwaves, disrupted harvests, rising insurance costs, and growing pressure on already stressed systems.

That local context matters deeply for co-operatives, because co-ops play a major role in our communities. They provide essential goods and services across housing, agriculture, finance, and community infrastructure. They are embedded in the places where climate impacts are felt most directly, and because they are rooted in our communities and built for the long term, co-ops are well positioned to drive meaningful solutions.

From farms, to housing, to food co-ops, to credit unions and more, co-operatives’ close connection to their members and local economies can make climate disruption more visible, more immediate, and more significant. At the same time, this means co-operatives have something unique to offer -- a business model that is democratic, participatory, rooted in community, and oriented toward creating long-term value for the people they serve.

Climate change is a systems level problem that impacts housing, food security, financial resilience, and community wellbeing. Co-operatives operate right at that intersection, which makes their role increasingly important.

We can’t solve a problem with the same type of thinking that created it, and co-operatives offer a different way of thinking.

Climate change threatens the financial security of Canadians and our communities

Climate risk is not distributed evenly. Smaller and medium-sized organizations, including many co-ops, may feel the risk more sharply because they often operate closer to local conditions and with less room to absorb shocks. When a climate event hits, there is often less distance between the disruption itself and the people, assets, and services affected by it.

Housing is one clear example, as households face rising risks from extreme heat, flooding, wind, hail, and other perils. As affordable housing is top of mind, Canada needs new housing built, but it also needs to focus on retrofitting existing stock while steering new developments away from high-hazard areas. Together, this can dramatically reduce losses without limiting much-needed housing growth.

The co-operative financial sector, as another example, is confronted by climate risk. Credit unions, co-operative insurers, and mutuals are all operating in a landscape reshaped by climate change. Severe weather is driving insured losses into the multiple billions each year in Canada, and this is putting pressure on premiums, underwriting, and overall stability of the traditional insurance model. At the same time, climate transition risks, from policy changes and regulatory shifts to changing client expectations and consumer preferences, are beginning to influence long-term financial performance in more visible ways.

For insurers, that can mean higher claims costs, greater volatility, and difficult decisions about pricing, coverage, and insurability in higher-risk areas. For credit unions and other co-operative financial institutions, climate risk can affect lending portfolios, property values, business continuity, and local economic resilience. In other words, climate change is no longer a peripheral issue for the financial sector. It is becoming a core consideration in how risk is understood, priced, managed, and communicated.

A resilience-based approach to risk

As climate impacts intensify, the role of insurance and risk management needs to evolve. Insurance protection is still essential for recovery, but recovery alone is no longer enough. Co-operative and mutual insurers can help lead a broader shift toward prevention, adaptation, and resilience. That means thinking not only about how to respond after a loss, but also about how to reduce the likelihood and severity of future losses before they occur.

At Co-operators, we see that shift in our own business, and we’re embracing it. As a purpose-led co-operative, we exist to create financial security for Canadians and our communities. But as climate risk increases, repeated losses are widening the financial security gap by pushing up premiums in high-risk areas and across the system. That is a direct threat to our purpose.

Our response was novel but intuitive. Guided by our co-operative values and led by our purpose, we’ve committed to an approach that goes beyond the traditional model of indemnity toward a model of resilience: investing in both prevention and recovery, to help avoid losses in the first place. That way of thinking led to TomorrowStrong™, a property insurance endorsement that helps clients rebuild with more resilient materials and take additional preventive measures such as installing sump pumps or surge protectors. We were the first insurer in Canada to offer this kind of endorsement at no additional cost for home, farm, and commercial policies. Since launching it in 2024, other insurers have started moving in a similar direction, which signals growing momentum toward resilience.

What matters here is not only the product itself, but the shift in thinking behind it. If climate risk is changing the conditions and realities our communities are facing, then our responses also need to change. The task is no longer just to restore what was there before. We have an opportunity to help people and communities come back stronger, safer, and better prepared for a rapidly changing world.

We are also applying this thinking beyond the individual client. Through our Resilience Acceleration Lab, we are working to support community-level climate adaptation through better infrastructure, planning, and cross-sector partnerships. The aim is simple: help communities become more resilient before the next shock arrives. But the solutions are complex and require a whole of society, co-operative approach. Climate risk is cumulative, interconnected, and rarely confined to one asset, one organization, or one sector. Climate risk doesn’t end at the property line. It impacts the whole system, which means resilience has to be built across the whole system, too.

As co-operatives, we can use the levers of influence that we have. For co-operatives more broadly, resilience can take many forms. It can mean retrofitting buildings, strengthening governance structures and processes, innovating products and services, improving climate literacy, using better risk data to guide decisions, and investing in infrastructure and services that reduce our collective exposure over time. The common thread is long-term thinking rooted in community need. That is where the co-operative model has particular strength.

Co-operative governance is built for times of uncertainty

How we are governed is one of the secret superpowers of co-operatives. Co-operatives are built differently. Rather than maximizing short-term returns for shareholders, they are designed to serve members and communities over time. Through member ownership and democratic governance, they create a stronger link between organizational decision-making and the needs of the communities and people we serve.

That matters in a changing climate. Co-operative governance is well suited to navigating complex, interconnected challenges because it values participation, adaptability, and shared responsibility. It also creates conditions for longer-term thinking in environments that are often shaped by short-term pressure. Co-operatives help build local resilience in practical ways: by providing essential services, connecting people and resources, and creating space for collective action.

Complex challenges require co-operative solutions

Canada is facing intersecting pressures: climate change, housing, affordability, and economic uncertainty. These are not separate issues unfolding in parallel. They are increasingly overlapping, reinforcing one another, and testing the resilience of the systems people rely on every day. Co-operatives are not the silver bullet, but they are a proven model grounded in community, participation, co-operative values, and long-term thinking.

This is critical because building resilience to climate change is not only a technical challenge. It is a social, economic, and governance challenge. It requires institutions, organizations, and community groups that can work across sectors, stay connected to local realities, and make decisions with future generations in mind. Co-operatives, at their best, are built for exactly that kind of work.

Many co-operatives were created to help people navigate uncertainty and meet shared needs in challenging times. Co-operators was founded over 80 years ago, during the Great Depression, by a group of prairie farmers who had lost most of their belongings, their savings, and their life insurance at a time when traditional insurers did not meet their unique needs. Together, they built a model that worked for their community. Today, that model has scaled to serve over 1 million Canadian homes, 45,000 farms, over 600,000 lives, and 6.5 million credit union members.

The moment we are facing today calls for that same spirit of co-operation again. In a rapidly changing climate, the question is not simply how we recover from the shocks ahead, but how we organize and rethink business-as-usual to reduce future harm, strengthen resilience, and support the wellbeing of communities over the long term.

Submitted by: Shawna Peddle, Associate Vice-President, Sustainability, Co-operators