The main long-term risks are climate-related, while the main short-term concerns include social divides, livelihood crises and deteriorating mental health, a World Economic Forum study reveals on Tuesday.
Failure to meet climate goals and climate-related risks dominate global concerns as the world enters the third year of the covid-19 pandemic, the World Economic Forum’s Global Risks Report 2022 says, adding that in the short term, worries centre on social and livelihood crises and deteriorating mental health.
The document also states that most experts admit that a global economic recovery will be “volatile and uneven” over the next three years.
In its 17th edition, the global survey of experts found that only one in six “is optimistic” and only one in 10 believes that the “global recovery will accelerate”.
The report, which explores four areas of emerging risks (cybersecurity, space competition, a disorderly climate transition and migration pressures, with each requiring global coordination to be successfully managed), also seeks to encourage leaders to “think beyond the quarterly reporting cycle” and to create policies that “shape the agenda” for the coming years.
Furthermore, World Economic Forum director-general Saadia Zahidi notes in this paper that “health and economic disruptions” are “exacerbating social divides”.
It continues: “This is creating tensions at a time when collaboration within societies and among the international community will be critical to ensure a balanced and rapid global recovery.”
In this sense, he calls for global leaders to come together and adopt “coordinated approaches” with the various publics to solve the “unrelenting global challenges” and “build resilience” before the next crisis.
For her part, Marsh Continental Europe’s head of risk management, Carolina Klint, believes that companies, as they recover from the covid-19 pandemic, “are rightly focusing on organisational resilience and ESG benchmarks” that have to do with governance, environmental and social.
However, with cyber threats “growing faster” than “the ability to permanently eradicate them”, it is clear that “neither resilience nor governance is possible without credible and sophisticated cyber risk management plans”, he argues.
Similarly, he stresses that “organisations need to start understanding space risks”, namely the risk with satellites, on which there is increasing dependence due to the rise of geopolitical “ambitions and tensions”.
The director of risk of the Zurich insurance group, Peter Giger, for his part, warns that the climate crisis remains the “greatest long-term threat” facing humanity.
Hence, if “failure to combat” climate change could “reduce the world’s Gross Domestic Product [GDP] by one sixth”, since the commitments made at the United Nations Climate Change Conference (COP26) “are still not sufficient” to achieve the objective of 1.5º Celsius, warns the manager.
However, it warns that “it is not too late” for governments and companies to act on the risks they face and to drive an “innovative, determined and inclusive transition” that protects economies and people.
The report also states that among the short-term risks, that is, in the next two years, extreme weather, livelihood crises, infectious diseases, security gaps and digital inequality stand out, while in the medium term (in the next two to five years) it lists, among others, the failure of climate action, erosion of social cohesion and debt crises.
Finally, in the long term, i.e. in the next five to ten years, the report puts the crisis of natural resources, involuntary migration and adverse technological advances among the top issues.