A ‘failure of climate change mitigation and adaptation’ is thought to be the biggest risk facing the world, ahead of weapons of mass destruction, water crisis, mass involuntary migration and severe energy price shock, according to a report published in January 2016 by the World Economic Forum (WEF) in collaboration with risk specialists Marsh and McLennan and Zurich Insurance.
However, the Global risks report 2016, now in its 11th edition, finds for the first time a broad interconnected risk landscape with environmental, geopolitical, societal and economic factors as the top five most impactful risks. ‘We know climate change is exacerbating other risks such as large scale involuntary migration and international security, but these are not the only interconnections that are rapidly evolving to impact societies, often in unpredictable ways,’ said Maragereta Drzeniek-Hanouz, head of global competitiveness and risks at WEF. Economic crisis maintains a high position on the risk landscape, linked to under- and unemployment, linked to profound social instability. Income disparity, which topped the chart in the 2014 report, is now reflected in these growing interconnections.
The report findings are based on a survey of 750 global leaders from industry, business, government, academia and wider society, representing emerging and developing countries. Respondents were asked about the potential impact as well as the likelihood of 29 global risks over the next 10 years. The number one risk in terms of ‘likelihood’ of occurring in 2016 is thought to be mass involuntary migration, followed by extreme weather events; failure of climate change mitigation and adaption; interstate conflict with regional consequences; and major natural catastrophes.
‘Events such as Europe’s refugee crisis and terrorist attacks have raised global political instability to its highest level since the Cold War’, said John Drzik, president, global risk and specialities at Marsh. ‘The need for business leaders to consider the implications of these risks on their firm’s footprint has never been more pressing.’