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World Economic Forum reveals top risks of 2022

World Economic Forum reveals top risks of 2022 | Insurance Business UK

World Economic Forum reveals top risks of 2022

The Global Risks Report 2022 has identified the key risks facing the world as it enters the third year of the COVID-19 pandemic. Now in its 17th edition, the report has identified the top 10 global risks by severity.

The top 10 global risks, by severity, facing the world over the next 10 years are:

  1. Climate action failure
  2. Extreme weather
  3. Biodiversity loss
  4. Social cohesion erosion
  5. Livelihood crises
  6. Infectious diseases
  7. Human environmental damage
  8. Natural resource crises
  9. Debt crises
  10. Geoeconomic confrontation

The report - which was developed by the World Economic Forum’s Global Risks Advisory Board in conjunction with its strategic partners, Marsh McLennan, SK Group and Zurich Insurance Group, and its academic advisors - encourages leaders to think outside the quarterly reporting cycles and create policies that manage risks and shape the agenda for the coming years.

Climate risks continue to dominate global concerns, but while the top-long term risks relate to climate, the top shorter-term global concerns revolve around societal divides, livelihood crises and mental health deterioration. This is particularly relevant given that most experts believe a global economic recovery will be “volatile and uneven over the next three years”.

Top short-term risks

Exploring the top short-term (over the next 0-2 years) global risks, the Global Risk Report 2022 highlighted that key concerns are:

Top medium-term global risks

The top medium-term (over the next 0 to 5 years) global risks cited by the report represented a hybrid of the societally-focused emphasis of the short-term risks and the climate-focused long-term risks identified:

Top long-term global risks

Ten top long-term (over the next 5-10 years) risks were identified by the report, as outlined below:

Exploring the key findings of the report Carolina Klint, risk management leader, Continental Europe, Marsh, noted that as businesses recover from the pandemic, they are zeroing in on organizational resilience and ESG credentials. She highlighted that cyber threats are now growing faster than the ability to eradicate them permanently, which in turn is making it clear that neither resilience nor governance are possible with “credible and sophisticated cyber risk management plans”.

“Similarly,” she said, “organizations 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.”

Zurich Insurance Group’s, group chief risk officer Peter Giger also commented on the report and emphasized that the climate crisis remains “the biggest long-term threat facing humanity”. Failure to act on climate change could shrink global GDP by one-sixth, he said, and the commitments taken at COP26 are still not enough to achieve the 1.5ͦC goal.

“It is not too late for governments and businesses to act on the risks they face,” he said, “and to drive an innovative, determined and inclusive transition that protects economies and people.”