Extreme Weather Events Seen as Single Most Prominent Global Risk

Globes against black and white background

January 23, 2018 |

Globes against black and white background

The Global Risks Report 2018 , published by the World Economic Forum, shares the perspectives of global experts and decision-makers on the most significant risks that face the world. The report illuminates the struggle to keep up with an accelerating pace of change and highlights numerous areas where systems are pushed to the brink, from extinction-level rates of biodiversity loss to mounting concerns about the possibility of new wars.

The annual Global Risks Perception Survey (GRPS) asked nearly 1,000 respondents for their views about the trajectory of risks in 2018; 59 percent of their answers pointed to an intensification of risks, compared with 7 percent pointing to declining risks.

As in 2017 (annual reports are published each January), the environment was by far the greatest concern raised by experts. Among the 30 global risks the experts were asked to prioritize in terms of likelihood and impact, all five environmental risks—extreme weather, biodiversity loss and ecosystem collapse, major natural disasters, man-made environmental disasters, and failure of climate-change mitigation and adaptation—were ranked highly on both dimensions. Extreme weather events were seen as the single most prominent risk.

The report says that the prospect of strong economic growth in 2018 presents leaders with a golden opportunity to address signs of severe weakness in many of the complex systems that underpin the world, such as societies, economies, international relations, and the environment.

Professor Klaus Schwab, founder and executive chairman, World Economic Forum, commented as follows.

A widening economic recovery presents us with an opportunity that we cannot afford to squander, to tackle the fractures that we have allowed to weaken the world's institutions, societies, and environment. We must take seriously the risk of a global systems breakdown. Together we have the resources and the new scientific and technological knowledge to prevent this. Above all, the challenge is to find the will and momentum to work together for a shared future.

According to the GRPS, cyber threats are growing in prominence, with large-scale cyber attacks ranked third in terms of likelihood, while rising cyber dependency is ranked as the second most significant driver shaping the global risks landscape over the next 10 years.

John Drzik, president of Global Risk and Digital, Marsh, said the following.

Geopolitical friction is contributing to a surge in the scale and sophistication of cyber attacks. At the same time, cyber exposure is growing as firms are becoming more dependent on technology. While cyber-risk management is improving, business and government need to invest far more in resilience efforts if we are to prevent the same bulging "protection" gap between economic and insured losses that we see for natural catastrophes.

The Federation of European Risk Management Associations (FERMA) and its members urge companies to use the economic recovery to invest in increasing their resilience. "We believe that an enterprise risk management process with leadership from a risk management professional gives organizations the most effective way to make these investment decisions," said FERMA President Jo Willaert.

January 23, 2018