Top Global Risks in 2022: Climate Failure and Social Crisis

Climate crisis, social divides, cyber risks, and uneven global recovery as pandemic lingers are top risks. 1 in 6 experts are optimistic and 1 in 10 believe the global recovery will accelerate. To resolve systemic issues, global leaders must adopt a coordinated multistakeholder response.

As the world enters the third year of the pandemic, climate risks are dominating global concerns. While climate is the top long-term risk, societal divides, livelihood crises, and mental health deterioration are the top short-term global concerns, according to the Global Risks Report 2022.

Furthermore, most experts believe that the global economic recovery will be volatile and uneven over the next three years.

The report, now in its 17th edition, encourages leaders to think beyond the quarterly reporting cycle and develop policies that manage risks and shape the agenda for the coming years. It investigates four emerging risks: cybersecurity, space competition, a disorderly climate transition, and migration pressures, each of which necessitates global coordination for successful management.

"Health and economic disruptions are exacerbating social cleavages. This is causing tensions at a time when collaboration within societies and among the international community will be critical to ensuring a more even and rapid global recovery. Global leaders must come together and take a coordinated multistakeholder approach to address unrelenting global challenges and build resilience ahead of the next crisis,"

said Saadia Zahidi, Managing Director of the World Economic Forum.

"As companies recover from the pandemic, they are rightly sharpening their focus on organizational resilience and ESG credentials,"

Carolina Klint, Risk Management Leader, Continental Europe, said.

"With cyber threats growing faster than our ability to eradicate them permanently, it is clear that neither resilience nor governance are possible without credible and sophisticated cyber risk management plans. Similarly, organizations must begin to understand their space risks, particularly the risk to satellites, on which we have become increasingly reliant as geopolitical ambitions and tensions have risen."

"The climate crisis remains the greatest long-term threat facing humanity,"

said Peter Giger, Group Chief Risk Officer at Zurich Insurance Group.

"Failure to act on climate change could reduce global GDP by one-sixth, and the commitments made at COP26 are still insufficient to meet the 1.5 C goal. It is not too late for governments and businesses to respond to the risks they face and drive an innovative, determined, and inclusive transition that protects economies and people."

The report concludes with reflections on year two of the COVID-19 pandemic, providing new insights on national-level resilience. The chapter also draws on the World Economic Forum's risk expert communities - the Chief Risk Officers Community and the Global Future Council on Frontier Risks - to provide practical advice for implementing resilience in organizations.

The World Economic Forum's Global Risks Advisory Board provided invaluable assistance in the creation of the Global Risks Report 2022. It also benefits from ongoing collaboration with its Strategic Partners, Marsh McLennan, SK Group, and Zurich Insurance Group, as well as academic advisers at the Oxford Martin School (University of Oxford), the National University of Singapore, and the Wharton Risk Management and Decision Processes Center (University of Pennsylvania).

Source: Marsh news