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The Top Global Risks for 2016 and Beyond

February 1, 2016


The World Economic Forum recently released its Global Risks Report 2016, which outlines the risks that over 750 experts foresee in the next 10 years. Divided into five categories (economic, environmental, geopolitical, societal and technological), these perceived risks are also ranked by those with the greatest potential impact versus those risks that are the most likely to occur. Finally, considerable attention is paid to the interconnections between these global risks in the report.

While some risks apply more to certain industries or locations, the Global Risks Report attempts to highlight those concerns that have significance across national and industry lines. Therefore, CSR professionals need to familiarize themselves with these potential risks as they may impact the issues that are material to their companies, and also may warrant inclusion in their annual corporate responsibility reports. Additionally, nonprofit and nongovernmental organizations have a special role to play in mitigating these risks, and thus should be familiar with them as well.

Here are the 10 risks that these experts feel have the greatest potential impact on the planet:

  • Failure of climate-change mitigation and adaptation
  • Weapons of mass destruction
  • Water crises
  • Large-scale involuntary migration
  • Energy price shock
  • Biodiversity loss and ecosystem collapse
  • Fiscal crises
  • Spread of infectious diseases
  • Asset bubble
  • Profound social instability

The following are the 10 risks that these experts found to be the most likely to occur in the next 10 years:

  • Large-scale involuntary migration
  • Extreme weather events
  • Failure of climate-change mitigation and adaptation
  • Interstate conflict
  • Natural catastrophes
  • Failure of national governance
  • Unemployment or underemployment
  • Data fraud or theft
  • Water crises
  • Illicit trade

Reflecting on the prominence of environmental concerns on these lists, Cecilia Reyes, Chief Risk Officer for the Zurich Insurance Group, stated:

  • Climate change is exacerbating more risks than ever before in terms of water crises, food shortages, constrained economic growth, weaker societal cohesion and increased security risks. Meanwhile...political conflicts are in turn making the challenge of climate change all the more insurmountable - reducing the potential for political co-operation, as well as diverting resource, innovation and time away from climate change resilience and prevention.

John Drzik, President of Global Risk and Specialties at Marsh, commented on the issues of involuntary migration, interstate conflict and failure of national governance on the list of likely risks:

  • Events such as Europe's refugee crisis and terrorist attacks have raised global political instability to its highest level since the Cold War. This is widening the backdrop of uncertainty against which international firms will increasingly be forced to make their strategic decisions.

Accordingly, it behooves CSR professionals and nonprofit leaders to stay abreast of these potential risks and global concerns.

Additional information can be found at www.wef.ch/risks2016 or at #risks2016 on Twitter.

If you have a comment or suggestion, please follow me on Twitter at @timmcclimon and start a conversation there. Otherwise, thanks for reading and sharing this blog posting with friends and colleagues.
 

 

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