World Economic Forum calls for multi-stakeholder approach to mitigating risk

Economic and political polarisation will rise this year, and collaboration between world leaders, businesses and policymakers is urgently needed to stop severe threats to our climate, environment, public health and technology systems. These are the findings of the World Economic Forum’s Global Risks Report 2020, published today.

The report, produced in partnership with Marsh & McLennan and Zurich Insurance Group, highlights the need for a multi-stakeholder approach to mitigating risk at a time when the world cannot wait for the fog of geopolitical disorder to lift.

It forecasts a year of increased domestic and international divisions and economic slowdown. According to the report, geopolitical turbulence is propelling us towards an “unsettled” unilateral world of great power rivalries at a time when business and government leaders must focus urgently on working together to tackle shared risks.

Over 750 global experts and decision-makers were asked to rank their biggest concerns in terms of likelihood and impact and 78 percent said they expect “economic confrontations” and “domestic political polarisation” to rise in 2020. The report predicts that this would prove catastrophic, particularly for addressing urgent challenges like the climate crisis, biodiversity loss and record species decline.

The report points to a need for policymakers to match targets for protecting the Earth with ones for boosting economies – and for companies to avoid the risks of potentially disastrous future losses by adjusting to science-based targets.

For the first time in the survey’s 10-year outlook, the top five global risks in terms of likelihood are all environmental. The report sounds the alarm on: extreme weather events; failure of climate-change mitigation and adaptation by governments and businesses; human-made environmental damage and disasters; major biodiversity loss and ecosystem collapse resulting in severely depleted resources for humankind as well as industries; and major natural disasters such as earthquakes, tsunamis, volcanic eruptions, and geomagnetic storms.

John Drzik, chairman, Marsh & McLennan Insights, said: “There is mounting pressure on companies from investors, regulators, customers, and employees to demonstrate their resilience to rising climate volatility. Scientific advances mean that climate risks can now be modelled with greater accuracy and incorporated into risk management and business plans. High profile events, like recent wildfires in Australia and California, are adding pressure on companies to take action on climate risk at a time when they also face greater geopolitical and cyber risk challenges.”