The world is most at risk from the lingering financial crisis, deflecting attention from climate change at a time of increasing extreme weather events, according to the World Economic Forum’s Global Risks 2013 report. A survey of over 1,000 experts and industry leaders has identified the top two most prevalent global risks to be severe income disparity and chronic fiscal imbalances, reflecting on-going concerns about government debt. Respondents rated rising greenhouse gas emissions as the third most likely global risk overall.
The failure of climate change adaptation was seen as the environmental risk with the most knock-on effects for the next decade. The report describes 50 global risks, grouped into categories: economic, environmental, geopolitical, societal and technological. Overall, the data reveal a slightly more pessimistic outlook for the coming 10 years. On a regional basis, experts in North America tended to see risks as more likely than experts in other regions.
Younger respondents were more concerned than older respondents; women were more pessimistic than men.
Developed with expert contributions from Marsh & McLennan Companies, Swiss Reinsurance Companies, Zurich Insurance Group, the Oxford Martin School (University of Oxford), the National University of Singapore and the Wharton Center for Risk Management (University of Pennsylvania), Global Risks 2013 is the flagship initiative of the World Economic Forum’s Risk Response Network, which provides private and public sector leadership with an independent platform to build resilience by mapping, monitoring and managing global risks.
Global Risks 2013 includes a special report on national resilience, laying the groundwork for a new country resilience rating which would allow leaders to benchmark their progress. The report also highlights “X Factors” – emerging concerns that warrant more research. These include the rogue deployment of geoengineering and brain-altering technologies. These and three major risk cases – Health and Hubris, Digital Wildfires and Environmental/Economic Stress – are the focus of special sessions at the World Economic Forum Annual Meeting 2013 in Davos-Klosters, Switzerland, taking place on 23-27 January under the theme “Resilient Dynamism.”
“Eight years of tracking a large number of global risks worldwide, and how they interact with each other through interdependencies that we can now measure, has taught us three things,” says Dr. Erwann Michel-Kerjan: “(a) it is possible to see them coming from afar and prepare your organization/country in a timely fashion; (b) risk management has become too important to be left to risk managers alone and is now being elevated to Board and Cabinet discussions as a core strategy; and (c) there are winners and losers in this more volatile and short-termism world, and the gap is already widening. Decision makers need to take informed actions.