The five global risks perceived as most likely to occur are all environmental, according to the World Economic Forum’s Global Risks Report 2020, produced in partnership with Marsh & McLennan and Zurich Insurance Group.
It was the first time the top five risks outlined in the survey were all environmental. Extreme weather events with major damage to property, infrastructure and loss of human life was the top risk, followed by failure of climate-change mitigation and adaptation by governments and businesses, and human-made environmental damage and disasters, including environmental crime.
Major biodiversity loss and ecosystem collapse, either terrestrial or marine, creating irreversible consequences for the environment, was the fourth biggest risk. Major natural disasters such as earthquakes, tsunamis, volcanic eruptions, and geomagnetic storms, came in at fifth.
The report also warned that the world will see increased domestic and international divisions and economic slowdown in 2020. Nearly four fifths (78 percent) of global experts and decision makers surveyed for the report expect economic confrontations and domestic political polarisation to rise this year. This would have devastating implications for the world’s ability to tackle climate crisis, biodiversity loss and record species decline.
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, the report said.
Policy-makers need to match targets for protecting the planet with targets for boosting economies, the report said. Companies must also avoid the risks of potentially disastrous future losses by adjusting to science-based targets, it warned.
John Drzik, chairman of 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 modeled 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.”
World Economic Forum, Global Risks Report 2020, John Drzik, Marsh & McLennan, Zurich Insurance Group