Anticipating the business impacts of climate migration

Climate change impacts are prompting some people to rethink where they live. Companies should start preparing their workers, their models, and their customers.

James Cascone

United States

Karen Cunningham

United States

Derek Pankratz

United States

David R. Novak

United States

The effects of climate change are here. 2023 was the hottest year on record; global average temperatures were 1.2C higher than the average since 1850.1 With those higher temperatures comes a greater risk of wildfire, drought, flooding, and severe storms.2 2023 saw an unprecedented wildfire season in Canada, impacting 18.4 million hectares versus the 2.5 million hectares average.3 Almost a quarter of the world’s population was living in drought conditions in 2022 and 2023, according to the United Nations.4 Floods in Pakistan in 2022 submerged one-third of the country and displaced millions.5 The United States experienced more billion-dollar disasters in 2023 than ever before.6

Deloitte’s ConsumerSignals survey7 shows a growing number of respondents  have experienced extreme, climate-related weather conditions since 2022. While extreme heat is most frequently reported,8 other impacts have also seen sizable and steady prevalence over the last two years, including storms and wildfires. As efforts to cut planet-warming emissions continue to fall short of what’s needed to meet Paris Agreement targets,9 the frequency and severity of these impacts—and their effects on people’s lives—seem set only to increase over time.

One response to heat, droughts, fires, and floods is to move somewhere with seemingly less vulnerability to climate extremes. The international community is already grappling with climate migration. Weather-related hazards triggered the internal displacement of 31.8 million people in 2022, according to the Internal Displacement Monitoring Centre.10 The World Bank expects climate change to be one of the main drivers of internal migration, especially in developing regions like Africa and Asia Pacific, with perhaps 216 million people moving within their own countries.11

Such climate migration can manifest in multiple ways: internal or cross-border movement of people; temporary or permanent moves; acute movements prompted by an emergency or more chronic, slower-moving shifts as people determine where to settle in light of climate impacts. Even in the event of natural disasters, people normally do not go far but stay local or hyperlocal.12 While most climate displacement is likely to be within country, people fleeing climate disasters may seek asylum in other countries, worsening the refugee crisis.13 In 2022 alone, 84% of refugees and asylum seekers were from countries with  high  climate vulnerability.14

The consequences are likely to be felt in geopolitics, society, and economics. Large migration inflows can have an impact on geopolitical tensions, especially in regions where there is increased competition for resources or where public sector resources are already stretched.15 Climate migration also has the tendency to reshape the social and cultural dynamics of the host region. Residents may perceive challenges from climate immigrants for jobs, land, housing, and services, which may lead to reduced social cohesion.16

Given the potential scope and impact, much of the attention from governments and businesses has been appropriately focused on this type of climate migration stemming from regions most vulnerable to climate change.17 The places expected to face the most severe climate impacts are also often the places with the fewest resources to adapt. The result is likely to be many millions on the move, uprooted by climate shocks.

But climate migration will likely also play out in developed and emerging economies, and as a slow-moving, chronic phenomenon. In places with relatively robust infrastructure and the means to build back, climate-influenced relocation could be the dominant trend. Even in places with high GDP per capita, there could be large-scale movements prompted by flooding or fire. But beyond the headlines and in ways large and small, more and more people are likely to begin factoring climate change impacts into where they choose to live. The result, which could unfold slowly over years or decades, could fundamentally reshape many places’ demographics.  

Among respondents in Deloitte’s March 2024 ConsumerSignals survey—where North America, Europe, and major Asian markets comprise most of the sample—10% said they had already or were planning to relocate to mitigate climate impacts. Another 40% said they would factor climate change into a future move. While the survey is designed to capture diverse viewpoints, the demographic and country representation surely excludes the experiences or opinions of many individuals likely to be impacted by climate change.

Unknowns of climate migration

Not all of these respondents will relocate, but some likely will, especially as climate impacts occur more intensely and often. If even a fraction of those who say they plan to move or are considering a move actually do so, the numbers of migrants could be significant. The movement of 10% of the population in the United States, Germany, and India could shift 33 million, 8 million, and 140 million people, respectively.18

For business leaders, the potential size and complexity of future climate migration present several opportunities and challenges. Most directly, the location and composition of companies’ workers and customers could change. Age, education, and income, among other factors, all shape people’s ability and willingness to relocate generally. Over time, places perceived as facing greater climate-related risks could experience a “brain drain” as higher-educated and more-affluent workers move to what they see as more stable locations. That could require companies to pay higher wages or explore expanded benefits (such as supplemental housing insurance to cover extreme weather) to retain such workers where they currently are, or they may need to consider shifting their own base of operations or personnel policies (to allow more remote work, perhaps).

The geography of customers could shift as well. For example, overall, older people are less likely to move than younger ones, which could shift where demand is centered for goods and services that are often correlated with age (such as health care). Recent modeling suggests sea level rise and attendant outmigration by younger people could leave US coastal cities 10 years older (median age) by the century’s end.19 Businesses may need to adjust everything from marketing strategies to supply chains and distribution networks to accommodate.

There are also a host of potential knock-on impacts from climate migration. Local infrastructure could come under strain for places receiving new residents. Conversely, places experiencing out-migration may find their tax base eroding. The impacts can vary widely across geographies based on exposure to climate risks and local capacity. Those with fewer resources could be particularly challenged. The countries with the lowest GDP per capita in the ConsumerSignals survey—India, Brazil, and Mexico—also have the highest percentage of respondents contemplating a climate-related move.

Now is the time to ask questions and prepare to act

It may be unlikely that many companies are experiencing the effects of climate change–induced migration yet—or if they are, they may not realize it amid the other factors that prompt people to move, such as economic opportunity and quality of life. But that’s likely to change as climate change impacts grow more frequent and severe in the coming years. That makes now the right time to begin asking questions about the risks and opportunities presented by climate-influenced movements. Companies should start exploring today:

  • What is the geographic distribution of my company’s labor force and how does that map to climate vulnerabilities? How do the characteristics of those workers vary geographically?
  • How might climate-influenced migration impact the availability of skilled workers? What changes to the company’s geographic footprint, compensation plans, or working arrangements might be required to retain access to the right skills?
  • How might climate-influenced relocation influence broader employee expectations about their employer’s climate impact and actions? Respondents who experienced a climate-related extreme weather event are more likely to engage in a variety of sustainable behaviors and to see climate change as an emergency, according to Deloitte survey data.20 Similarly, workers uprooted by climate change could look to their employers to be doing more.21
  • What accommodations might be required to help ensure safe working conditions for those who can’t migrate and are exposed to climate impacts? Workers in agriculture and construction, to name just two sectors, often bear the brunt of extreme heat.
  • Are my company’s suppliers likely to experience an “inflow” or “outflow” of workers due to climate migration?22
  • What is the geographic distribution of my company’s customers, and how does that map to climate vulnerabilities? What changes in production, distribution, and marketing might be needed to meet customers where they are?

It is difficult to predict with any accuracy when, where, and with what magnitude climate change will shape patterns of human mobility. Migration—whether it’s a move two towns over or across the ocean—is a complex decision shaped by a wide variety of circumstances. The data suggests, however, that a sizable number of people are already factoring climate change into their decision-making. Companies that start considering the current and future impacts, and integrating those impacts into a broader climate adaptation and resilience action plan, will likely be better positioned to adapt to a hotter, less predictable world.

BY

James Cascone

United States

Karen Cunningham

United States

Derek Pankratz

United States

David R. Novak

United States

Nirmal Kujur

India

Endnotes

  1. National Oceanic and Atmospheric Administration, “2023 was the world’s warmest year on record, by far,” January 12, 2024.

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  2. Hans Pörtner et al., “IPCC, 2022: Summary for policymakers,” Climate Change 2022: Impacts, Adaptation, and Vulnerability (Cambridge, UK and New York, USA, Cambridge University Press), pp. 3–33.

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  3. NASA Earth Observatory, “Tracking Canada’s extreme 2023 fire season,” October 24, 2023.

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  4. United Nations Convention to Combat Desertification, Global drought snapshot 2023: The need for immediate action, 2023.

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  5. United Nations Children's Fund, “Devastating floods in Pakistan,” August 25, 2023.

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  6. Jeff Masters and Bob Henson, “U.S. billion-dollar weather disasters set an all-time record in 2023, with 28,” Yale Climate Connections, January 9, 2024.

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  7. The Deloitte ConsumerSignals survey is an online panel across more than 20 countries, with responses concentrated in North America, Europe, East Asia, and South Asia. Each country-level data set represents approximately 1,000 adults (18 and older), more than 20,000 in total. The results included in this report were collected between March 23 and 30, 2023, and between September 21 and 27, 2023.

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  8. With strong evidence of seasonality, the majority of respondents in Deloitte’s ConsumerSignals survey live in the Northern Hemisphere.

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  9. United Nations, “Global Stocktake reports highlight urgent need for accelerated action to reach climate goals,” accessed April 30, 2024.

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  10. Internal Displacement Monitoring Centre, 2023 global report on internal displacement, accessed April 30, 2024.

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  11. World Bank, “Climate change could force 216 million people to migrate within their own countries by 2050,” press release, September 13, 2021.

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  12. Susan F. Martin, Jonas Bergmann, Kanta Kumari Rigaud, and Nadege Desiree Yameogo, “Climate change, internal displacement and development,” United Nations, accessed April 30, 2024; Lawrence Huang, “Climate migration 101: An explainer,” Migration Policy, November 16, 2023.

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  13. “Climate refugee” is an ambiguous term with uncertain legal standing, according to the International Organization for Migration. United Nations Migration, “Environmental migration,” accessed April 30, 2024.

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  14. United Nations High Commissioner for Refugees, “The climate crisis is amplifying displacement and making life harder for those already forced to flee,” accessed April 30, 2024.

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  15. The White House, Report on the impact of climate change on migration, October 2021.

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  16. Ibid.

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  17. Academic research on climate migration, too, has tended to focus on developing countries in Africa and Asia. Roman Hoffmann, Barbora Šedová, and Kira Vinke, “Improving the evidence base: A methodological review of the quantitative climate migration literature,” Global Environmental Change 71 (2021): p. 102367.

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  18. United States Census Bureau, “U.S. Census Bureau current population,” accessed March 2024.

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  19. Mathew E. Hauer, Sunshine A. Jacobs, and Scott A. Kulp, “Climate migration amplifies demographic change and population aging,” Proceedings of the National Academy of Sciences 121, no. 3 (2024): e2206192119.

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  20. Leon Pieters, Jennifer Steinmann, James Cascone, Derek M. Pankratz, and Stephen Rogers, “Extreme weather’s impact on global climate change belief,” Deloitte Consumer Industry Center, accessed April 30, 2024.

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  21. Leon Pieters, Jennifer Steinmann, James Cascone, Derek M. Pankratz, and Stephen Rogers, “Extreme weather’s impact on global climate change belief,” Deloitte Consumer Industry Center, accessed April 30, 2024.

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  22. Nora M.C. Pankratz and Christoph M. Schiller, Climate change and adaptation in global supply-chain networks, Finance and Economics Discussion Series, August 16, 2022.

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Acknowledgments

The authors would like to thank Aditi Vashishtha and Elizabeth Payes for their help in developing this article.

 

Cover image by: Jaime Austin