Top risks to world in 2020

Insurers and investment analysts spend much time scrutinising statistics that provide insights into global economic trends. The World Economic Forum’s Global Risks Report is part of broader assessment of risk launched by the WEF and includes analysis at global, regional and industry levels. The research was conducted in partnership with members of the business, academic and public-sector communities.

The report does not pull its punches; all five key risks (measured by which risks are the most likely) are environment related, and four of the five key risks as measured by impact are environmental related. The five most likely global risks were listed as extreme weather, climate action failure, natural disasters, biodiversity loss and human-made environmental disasters. The five most impactful global risks were listed as climate action failure, weapons of mass destruction, biodiversity loss, extreme weather and a water crisis.

The annual risk survey requires the WEF’s network of business, government, civil society and thought leaders to gauge the risks facing our world. This year, the sample group received 1,047 responses to the survey. The survey has three sections; in the first respondents are asked to say whether risks associated with forty issues would increase or decrease this year relative to last year, in the second, respondents are asked assess risks in terms of their impact over the next ten years and in the third respondents are asked to select between three and six of the most strongly interconnected global risks.

Table A below is a list of the top twenty perceived global risks for the next ten years as rated by perceptions of ‘likelihood’ and ‘impact’, according to survey respondents. Economic risks are denoted in blue, environmental risks are denoted in green, geopolitical risks are denoted in orange, societal risks are denoted in red and technological risks are denoted in purple. This is the first time one category has occupied all of the top slots since the report was launched in 2006. Clearly climate change is hitting harder and accelerating faster than many people initially predicted.

World Economic Forum ten year risk outlook

The table below shows the perception of short term risk outlooks, as evaluated by ‘multi-stakeholders’ and ‘global shapers’. This table shows that younger respondents, (dubbed ‘global shapers’) are generally more concerned about climate change issues than the ‘multi-stakeholder’ group which also includes older respondents.

Survey results of the perceptions of short term risks, classified by multi-stakeholders and global shapers.

With respect to other risk-categories, trade tensions and geopolitical turbulence are also adding to the economic uncertainty. The potential fallout from the United States and China’s trade stand-off is a highlighted as a significant risk. These countries account for more than 40% of global GDP and separately, are also world’s top two emitters of greenhouse gases. The report highlights how long-mounting interconnected risks are starting to be felt. The synchronised slowdown of the global economy, the warmest temperatures on record and an increasingly unstable geopolitical environment are creating significant challenges.

A total of The Global Risks Report 2020 is released ahead of the World Economic Forum’s annual meeting in Davos. To read more, click on this link: Global Risk Report 2020

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