Climate change keeps the world awake at night

Flash floods have become a regular occurrence around the world. Climate change and its impacts continue to dominate the list of long term global risks. Image credit: Jonathan Ford

Climate change keeps the world awake at night

Climate change tops the list of global risks as the world prepares for at least three years of great volatility.            

Climate risks dominate global concerns as the world enters the third year of the pandemic. According to the Global Risks Report 2022, while the top long-term risks relate to climate, the top shorter-term global concerns include societal divides, livelihood crises and mental health deterioration.

Additionally, most experts believe a global economic recovery will be volatile and uneven over the next three years.

Now in its 17th edition, the report encourages leaders to think outside the quarterly reporting cycle and create policies that manage risks and shape the agenda for the coming years. It explores four areas of emerging risk: cybersecurity; competition in space; a disorderly climate transition; and migration pressures, each requiring global coordination for successful management.

According to Saadia Zahidi, Managing Director at the World Economic Forum (WEF) health and economic disruptions are compounding social cleavages.

“This is creating tensions at a time when collaboration within societies and among the international community will be fundamental to ensure a more even and rapid global recovery. Global leaders must come together and adopt a coordinated multistakeholder approach to tackle unrelenting global challenges and build resilience ahead of the next crisis,” says Zahidi.

Carolina Klint, Risk Management Leader at Continental Europe, Marsh, says that companies are sharpening their focus on organisational resilience and Environmental Social Governance (ESG) credentials as they recover from the pandemic.

“With cyber threats now growing faster than our ability to eradicate them permanently, neither resilience nor governance are possible without credible and sophisticated cyber risk management plans. Similarly, organisations need to start understanding their space risks, particularly the risk to satellites on which we have become increasingly reliant, given the rise in geopolitical ambitions and tensions,” says Klint.

“The climate crisis remains the biggest long-term threat facing humanity,” adds Peter Giger, Group Chief Risk Officer at the Zurich Insurance Group.  

“Failure to act on climate change could shrink global GDP by one-sixth and the commitments taken at COP26 are still not enough to achieve the 1.5 ℃ goal. It is not too late for governments and businesses to act on the risks they face and to drive an innovative, determined and inclusive transition that protects economies and people,” says Giger.

The report closes with reflections on year two of the covid-19 pandemic, yielding fresh insights on national-level resilience. The chapter also draws on the World Economic Forum’s communities of risk experts – the Chief Risk Officers Community and Global Future Council on Frontier Risks – to offer practical advice for implementing resilience for organisations. #risks22

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