Climate-induced Displacement
The climate crisis is not just about rising temperatures and changing weather patterns; it is a profound human crisis. In 2023 alone, record-breaking heatwaves have impacted much of Europe, resulting in catastrophic wildfires and flooding. In Hong Kong, typhoons have forced school closures and evacuations. In Libya, torrential rainfall caused the collapse of two dams, resulting in the destruction of entire communities.
Climate volatility increases the prospect of climate-induced mass migration. Large populations live in ‘climate hotspots’, which regularly coincide with the most fragile and conflict-affected parts of the world. These persons are often disproportionally affected by climate change. In 2022, the Internal Displacement Monitoring Centre found that over 32 million people around the world were forced to abandon their homes due to natural disasters – the highest figure in a decade. By 2050, the World Bank estimates that climate change could force an astounding 216 million people to be displaced from their homes.
As climate-induced migration becomes one of the world’s most significant humanitarian challenges, nations must focus their investments to prevent further climate-induced displacement. This is no longer a ‘future issue’; it is happening now.
In the Law:
Despite rejection of the term ‘climate refugee’ in international refugee law, it is increasingly evident that events associated with climate change, natural disasters, and environmental degradation are leading to both voluntary and forced displacement. As climate change drives people to abandon their homes, there is an urgent need to build on existing laws to address climate displacement. Thus, frameworks for human rights and refugee law are crucial in safeguarding the rights of climate migrants.
Historically, Australia’s stance on both refugee and climate policy has been complex to say the least. Over the past two decades, the threat of a ‘wave’ of uncontrolled migration has become ingrained in our political culture – and the future is looking increasingly fractious. This is a particularly sensitive issue for our neighbouring Pacific Island countries, which face rapidly eroding coastlines and the highest economic costs from climate change, despite contributing only a fraction of the world’s greenhouse gases.
While international climate migration looms, Australia is also experiencing its own spike in internal migration as climate change renders certain regions uninhabitable. The recent catastrophic flooding in New South Wales and Queensland in 2022, and bushfires of 2019/2020 are compelling examples of Australia’s own vulnerability to the ecological consequences of climate change.
In the Company Boardroom:
As companies strive to integrate ESG values, understanding and adapting to the impacts of climate change becomes imperative. Companies located in, or sourcing from ‘climate hotspots’ must consider the potential of community displacement.
While mitigation strategies aimed at the reduction or prevention of greenhouse gas emissions have been a key focus for companies in addressing climate change, climate adaption efforts to reduce the negative impacts that are already upon us remains a challenge. According to the most recent data from the S&P Global Corporate Sustainability Assessment, only one in five companies have a plan in place to adapt to the physical risks of climate change.
Beyond mere recognition, companies play a significant role in fostering resilience among communities affected by climate change impacts. By investing in risk reduction measures and supporting livelihood programs, companies can not only safeguard their operations but also uplift the communities in which they operate.
In the Investment Houses:
Current resources are alarmingly inadequate in tackling post-climate disaster needs, with costs ranging between $3.5 to $12 billion annually. By 2023, it is estimated that funding requirements could surge to almost $20 billion per year.
Addressing climate change is not just an environmental concern – it is also an economic one. While mitigation is critical for the survival of our planet, failing to fund adaptation could result in a huge economic toll and widespread increases in poverty. Adapting human systems and making them climate resilient – strengthening their capacity to cope with and recover from climate shocks – is crucial to ensuring well-being and prosperity in a changing climate.
From an investment house perspective, there are several key reasons why investing in climate adaptation strategies is not only a financial imperative but also an opportunity. Moreover, investments that do not incorporate adaptation and resilience considerations can carry significant risks, resulting in investment failure, premature physical destruction and degradation, and a significant negative impact on financial returns.
Our View:
The rippling effects of climate-induced migration highlights the interconnected nature of the global climate crisis. Nations and companies can no longer operate in isolation, treating the impacts of climate change as peripheral. Climate change mitigation and adaptation strategies go beyond safeguarding just the environment, they are intertwined with ensuring human dignity, socio-economic stability, and global security.
In addressing these challenges, we must shift the narrative from mere recognition to tangible actions, transitioning from short-term fixes to long-term sustainable strategies. As the physical risks of climate change increase in intensity and frequency, a significant gap is emerging, of which our most vulnerable communities are experiencing its harshest impacts. We must act now to secure a sustainable future for all. Because you never know, one day soon we could all be climate-related refugees.
For additional information on this important topic or ESG assistance, contact us today at info@anabranchesg.com.au