The 16th edition of the World Economic Forum’s Global Risks Report analyses the risks from societal fractures—manifested through persistent and emerging risks to human health, rising unemployment, widening digital divides, youth disillusionment, and geopolitical fragmentation.
While, unsurprisingly, one of the big changes between this year and last, in terms of risks, has been brought about by the COVID-19 coronavirus pandemic, environmental risks continue to threaten, according to this year’s Global Risks Report, which identified “Climate action failure” as the most impactful and second most likely long-term risk identified in the GRPS (Global Risks Perception Survey).
Despite a drop in carbon emissions caused by lockdowns and disruption to international trade and travel, there are concerns that as economies start to recover, emissions will soar.
Among the highest likelihood risks of the next ten years are extreme weather, climate action failure and human-led environmental damage; as well as digital power concentration, digital inequality and cybersecurity failure.
Among the highest impact risks of the next decade, infectious diseases are in the top spot, followed by climate action failure and other environmental risks; as well as weapons of mass destruction, livelihood crises, debt crises and IT infrastructure breakdown.
As with COVID-19, climate change impacts are likely to play out disproportionately across countries, exacerbated by long-existing inequalities, the report reads.
There is only a short window to redress these disparities. A shift towards greener production and consumption cannot be delayed until economies are revived. Governments—individually and in coordination—need to catalyse a transformation that amalgamates investment in green and inclusive economic recovery, with short-term measures to bridge gaps in health, education, employment prospects and social safety nets. A fractured future can be avoided by bridging these gaps and enabling opportunities for everyone.
Future Preparedness for Global Risks
- Frameworks: Formulating detailed analytical frameworks that take a holistic and systems-based view of risk impacts will help to surface potential dependencies at a fitting moment, spill-over consequences, vulnerabilities and blind spots. This is critical in environmental risk mitigation, for example, where interventions such as developing climate-resistant crop varieties could impact food system resilience. Multilateral institutions, public-private arrangements and civil society all have a role in facilitating such systemic outlooks. Holistic analysis provides a foundation for stress-testing assumptions; identifying and comparing the tradeoffs required by different mitigation proposals and examining responsive capabilities against emerging crises and forward-looking scenarios.
- Risk champions: Investing in high-profile “risk champions” who can bring together different stakeholders to spur innovation in risk analysis, financing and response capabilities, and improve relationships between scientific experts and political leaders. The 2nd edition of the Global Risks Report proposed the concept of a “National Risk Officer” with a remit to enhance resilience by improving the decision-making culture. Risk champions should be positioned before the frenzy of the next crisis—whatever it proves to be—yet, even with risk champions in place, the importance of leadership attention to risk at the highest levels in business and government is by no means lessened.
- Communication: Improving the clarity and consistency of risk communications and combating misinformation. Most crises require all-of-society responses—and there is enormous goodwill and energy to leverage—but confusion and frustration can undermine efforts to build trust and align responsibilities between the public sector, private sector, communities and households. There is huge scope to enhance self-organized resilience at the community and national levels. For example, more can be done to understand—and therefore tackle—biases at the individual level regarding spread of misinformation. Better coordination among private sector technology companies and government can help to alert users to misinformation.
- Public-private partnerships: Exploring new forms of public-private partnership on risk preparedness in technology, logistics and manufacturing. The pandemic has shown that innovation can be sparked when governments engage the private sector to respond to large-scale challenges—if risks and rewards are shared fairly and appropriate governance is in place. Vaccine deployment will be a test case in resiliency: while it will raise new challenges, partnerships could prove effective in meeting demand for glass vials, managing cold-chain logistics, recording doses given, and even countering vaccine hesitancy. The COVID-19 crisis also highlighted the need for greater coordination on financing to improve resilience and expedite recovery, from pre-emptive investment and contingency budgets to insurance pools with government backstops. The lesson for crisis management is that details matter and need to be addressed collaboratively.
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