Long-term climate threats, geopolitical turbulence and short-term economic confrontations and political polarization top the list of risks, in a World Economic Forum report.
According to the Global Risks Report 2020, political and economic polarization is expected to increase in 2020, making a collaborative strategy between world leaders more capable of halting serious threats to the climate, environment, public health and technological systems.
The report points to an increase in divisions between nations, along with a slowdown in the global economy – factors that generate “geopolitical turbulence” tending to produce “an unstable unilateral world”, where rivalry between great powers prevails.
The document is the result of the perspective of more than 750 experts and decision makers worldwide who were asked to rate their biggest concerns in terms of probability and impact.
For the first time – in this initiative promoted by the World Economic Forum and produced in partnership by the company Marsh & McLennan and the insurance group Zurich – the first five places in the global risk probabilities are occupied by environmental issues.
Extreme weather events, which damage the heritage and threaten human lives; the failure to combat climate change; disasters and environmental damage caused by human intervention; the significant loss of biodiversity; and major natural disasters, such as earthquakes and tsunamis, are at the top of the experts’ concerns.
The report also adds concerns about the “geopolitical turbulence”, alerting agents to the need to adapt “to the transfer of powers”, preparing for a phase of rapid transformation, at the risk of being unable to “respond to some of the pressing economic, environmental and technological challenges”. “The political landscape is polarized, sea levels are rising and climate fires are continuing.
This is the year in which world leaders must work with all sectors of society to repair and revitalize our cooperation systems, not only for short-term benefits, but also to combat our deepest risks”, says Borge Brende, president of the World Economic Forum. John Drzik, president of Marsh & McLennan, adds to these concerns the “growing pressure on companies by investors, regulators, customers and employees to demonstrate their resilience to the growing climate volatility”.
The report reveals that it were the youngest respondents who ranked environmental risks above all others, showing that the climate issue will, in the future, become a matter of perceived fundamental risk.
Therefore, Peer Giger, director of the Zurich group, warns of the need to adapt to the new environmental model, to avoid irreversible impacts.
“It is imperative that companies and policy makers accelerate the transition to a carbon neutral economy and more sustainable business models. We are already seeing the destruction of companies that failed to align their strategies in the face of political changes and the preferences of their customers ”, says Giger.
The Global Risks Report 2020 was developed with contributions from the Global Risks Advisory Board, an organization of the World Economic Forum, with the contribution of the company Marsh & McLennan and the Zurich group and their academic consultants from the Oxford Martin School (University of Oxford, United Kingdom), the National University of Singapore and the Wharton Risk Management and Decision Processes Center (University of Pennsylvania, United States).