The continuing, devastating effects of unabated climate change pose a significant risk across the globe. While that’s not a new observation, there’s an important emerging realization. Climate risk is beginning to be seen as part of a group of inter-connected risks, and as this group intersects and combines, it creates a cascade of risks with the potential to threaten every nation, every business, and indeed, every person on the planet. That’s the view captured in the World Economic Forum’s (WEF) 11th annual Global Risks Report.
The Report presents the results of nearly 750 surveys conducted with WEF members representing business, government, and academia. The respondents were asked to rate the perceived magnitude of impact and likelihood of 29 identified global risks. Analyzing those responses provides insights into not only which risks are perceived as both serious and likely, but how they might interact with each other.
For 2016, the Report highlights and provides deep analyses of three areas of risk:
- The failure of climate change mitigation and adaptation, which poses the most significant global risk and is the driving force behind many other identified risks, including
- Large-scale involuntary migration, seen as the most likely risk to occur; and
- Profound social instability, driven by the migration crisis, among other forces.
The mapped global risks for 2016 are presented in this matrix:
The Report examines the inter-connections among the forces driving the risks. The result is a convergence of risks into something larger. The effects of a changing climate – in the form of extreme weather events, water crises and natural catastrophes – feed into the continuation of the global refugee crisis, viewed as virtually unstoppable. The migrations in turn place huge, unsustainable strains on social systems. And formerly disempowered populations, now armed with digital access to communication and information, have the potential to force a breakdown in or failure of institutions of governance.
Reading the Report can leave you with a feeling of dread. But, as challenging as things are, hope remains. The Report cites the adoption of the Paris Agreement as a major turning point in the global fight against climate change. And groups that haven’t been deeply engaged (businesses, investors, cities) are mobilizing alongside longer-term climate advocates (NGOs). All of this activity is creating opportunities to address some of these risks now, whether to manage or reduce them. And there are new reports being published that will guide on what you and your company could be doing to find hidden opportunities and better manage your risks. Stay tuned for our upcoming Noteworthy in Sustainability update on these positive ideas.
You can read the full 2016 World Risks Report here.