OPPORTUNITY INTERNATIONAL THINK PIECE
Climate Change is Massively Accelerating Forced Displacement. How Should the Financial Inclusion Industry Respond?
June 2024
Deborah Foy, Executive Director, Opportunity International In 1990, the Intergovernmental Panel on Climate Change warned that the greatest single impact of climate change could be the impact on human migration. Fast forward to 2024, and climate change is becoming the leading cause of new displacements globally.1 In 2022 alone, displacement from weather-related disasters rose to 31.8 million, twice as many as were caused by conflict and violence. Climate change is also a “threat multiplier,” magnifying the impact of other drivers of displacement such as food insecurity. Of note, climate change significantly increases the risk of conflict, especially when tensions arise due to dwindling natural resources. All but three of the 45 countries that reported conflict displacement in 2023 also reported disaster displacement.2 Against this backdrop, financial inclusion can play a vital role – both in preventing climate-induced displacement, by helping communities to be more resilient, and in supporting forcibly displaced populations to rebuild their lives. Not only do the vast majority of the world’s unbanked population live in climate-vulnerable economies, but people who have been forced to move within and across borders are often completely shut out of the financial system. Yet with a billion people projected to join the ranks of the climatedisplaced by 2050,3 it is clear the sector needs to significantly accelerate its efforts both to better address the impacts of climate change on vulnerable communities today, and to be ready to provide the increased support that will be needed as climate-induced displacement intensifies.