Net-zero ‘too far down’ leadership agendas, says Zurich

Immediate and interlinked economic, geopolitical and societal risks “dominate” the risk landscape among G20 business leaders, “overshadowing” environmental and cyber risks and pushing the transition to net zero way down the list of leaders’ priorities as market turbulence takes centre stage.

These were the main findings of the World Economic Forum’s Executive Opinion Survey with more than 12,000 business leaders from 122 countries between April and August 2022. It comes as leaders meet for COP27 in Egypt and prepare for the G20 summit in Indonesia later in November.

The survey found that rapid and/or sustained inflation is the most commonly cited top risk in G20 countries, with 37% identifying it as a top concern, followed jointly by debt crises and the cost of living crisis with 21%.

Geo-economic confrontation was identified as the top risk by two G20 countries, while other respondents referenced the potential for state collapse and lack of widespread digital services and digital inequality as top concerns.

The 2022 results are “in sharp contrast” to 2021’s findings, Zurich said, particularly in key areas such as technological and environmental risk.

In spite of growing environmental pressures and rising environmental regulation in the last 12 months, environmental issues featured significantly lower as a top five risk for G20 countries in this year’s report compared to 2021. And while awareness of the threat of cyber attacks, especially to critical infrastructure, has clearly increased, it and other technological risks were among the least commonly cited top five risks this year.

“After a jump of 2 billion tonnes in 2021, the rise in global CO2 emissions this year is much lower – closer to 300 million tonnes. This is thanks to growth in the use of renewable energy and electric vehicles. Despite these positive developments, we are still not on track to reach the 1.5°C target,” said Peter Giger, group chief risk officer at Zurich Insurance Group.

“The transition to net-zero has dropped too far down on the short-term agendas of many business leaders. Yet the impacts of climate change are both short term and long term. Even in the current geopolitical and economically challenging environment, we need to focus on building a cleaner, more affordable and more secure energy system, if we hope to keep a net-zero future within grasp.”

Carolina Klint, risk management leader, Continental Europe at Marsh, said: “G20 business leaders are rightly focused on the immediate and urgent economic and geopolitical risks they are facing right now. However, if they are overlooking major technological risks this could create future blind spots, leaving their organisations exposed to severe cyber threats that could seriously impact their long-term success.”

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