The Global Risks Report 2019 is published against a backdrop of worrying geopolitical and geo-economic tensions. If unresolved, these tensions will hinder the world’s ability to deal with a growing range of collective challenges, from the mounting evidence of environmental degradation to the increasing disruptions of the Fourth Industrial Revolution.
Global Risks Report and its significance:
Based on the work of the Global Risk Network, the report describes changes occurring in the global risks landscape from year to year and identifies global catastrophic risks.
The report explores the interconnectedness of risks and is intended to raise awareness about the need for a multi-stakeholder approach to the mitigation of global risk
Top 10 risks by likelihood as per the latest report:
- Extreme weather events.
- Failure of climate change mitigation and adaption.
- Major natural disasters.
- A massive incident of data fraud/theft.
- Large scale cyber attacks.
- Man-made environmental damage and disasters.
- Large-scale involuntary migration.
- Major biodiversity loss and ecosystem collapse.
- Water crises.
- Asset bubbles in a major economy.
Analysis of the report and key takeaways:
Environmental risks dominate the global risks landscape in terms of impact and likelihood for the third year in a row. This includes extreme weather events and the failure of climate mitigation and adaptation. Only 12 years left to stay beneath 1.5C. However, there is a lack of political will to set more stretching targets to cut emissions. The report finds that business leaders are more concerned about the climate in the long term. This disconnect will need to be tackled.
Global risks are intensifying, but our capacity to respond to them is declining. Power is moving towards more nationalist, authoritarian states and they are becoming more inward-looking. With greater geopolitical friction, our ability to cooperate to solve challenges such as cyber risks and climate change has become more challenging.
Geopolitics and geo-economic factors, such as uncertainty and nationalism are fuelling risks. Innovation is also outpacing our ability to manage it and there are growing concerns around technology misuse.
Shorter-term fears are around geopolitical and cyber threats. For top business leaders, cyber risk concern is rising globally and is the highest ranked threat. Other concerns also exist including fiscal crises, unemployment, energy price shocks, national governance failure, interstate conflict, and natural disasters.
There is a significant financing gap (US$18 trillion) in infrastructure capital – with only US$79 trillion currently planned between now and 2040. This means 20% more financing is needed than we are putting in today. Furthermore, the infrastructure needs to be resilient to extreme weather events. Business, with its reliance on public sector infrastructure, will be impacted and need to work with the government on solutions.