20 Mar Environmental risks, the most pressing challenges for people´s safety and wellbeing
The Global Risks Report 2018 by the World Economic Forum (WEF) reveals that for the first time since they began tracking global risks in 2006, all five environmental risks occupy the top-right quadrant of The Global Risks Landscape 2018. This indicates higher-than-average perceptions of both likelihood and impact on people´s safety and wellbeing for next decade.
A global economic recovery is under way, offering new opportunities for progress that should not be squandered: What are the new challenges and risks that could emerge in the global risks landscape?
According to the last World Economic Forum Global Risks Perception Survey 2017–2018, the main conclusions are:
— Environmental risks have grown in prominence in recent years. This trend has continued this year, with all five risks in the environmental category being ranked higher than average for both likelihood and impact over a 10-year horizon. This follows a year characterized by high-impact hurricanes, extreme temperatures and the first rise in CO2 emissions for four years. We have been pushing our planet to the brink and the damage is becoming increasingly clear. Biodiversity is being lost at mass-extinction rates, agricultural systems are under strain and pollution of the air and sea has become an increasingly pressing threat to human health. A trend towards nation-state unilateralism may make it more difficult to sustain the long-term, multilateral responses that are required to counter global warming and the degradation of the global environment.
— Cybersecurity risks are also growing, both in their prevalence and in their disruptive potential. Attacks against businesses have almost doubled in five years, and incidents that would once have been considered extraordinary are becoming more and more commonplace.
— Headline economic indicators suggest the world is finally getting back on track after the global crisis that erupted 10 years ago, but this upbeat picture masks continuing underlying concerns. The global economy faces a mix of long-standing vulnerabilities and newer threats that have emerged or evolved in the years since the crisis.
— The world has moved into a new and unsettling geopolitical phase. Multilateral rules-based approaches have been fraying. Re-establishing the state as the primary locus of power and legitimacy has become an increasingly attractive strategy for many countries, but one that leaves many smaller states squeezed as the geopolitical sands shift.
How can businesses answer these global risks?
Companies need to look at those global risks that could have a direct or indirect impact on their business, and define a holistic approach to managing those risks. To do so it is required an adequate management of the connectivity of risks. A future that is not only based on risk transfer, but also includes greater oversight of the strategic risks and risk management approaches that are integrated to address the risk connectivity, and that are backed up by top-quality data insights and intelligence.
Responding to global risks needs to start at the highest level in companies. In other words, integrating risk management into the strategic planning process of the corporation is a recipe to success in this regard.