Anticipating the business impacts of climate migration

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.