Economic concerns move ahead of environmental and cyber risk in WEF survey

Business leaders in G20 countries are now most concerned by economic threats, according to the World Economic Forum’s (WEF) latest Executive Opinion Survey, with experts warning that the world could be creating cyber and environmental risk blindspots as these two issues drop down the agenda.

The annual WEF survey asked more than 12,000 business leaders from 122 countries between April and August what they see as the biggest risks currently, with the results released ahead of the COP27 in Egypt this week and the G20 summit in Indonesia later this month.

The research found that rapid and/or sustained inflation is the most commonly cited top risk in G20 countries this year, with 37% of respondents identifying it as a top concern. Next came debt crises and the cost-of-living crisis, both on 21%.

According to the survey results, interlinking economic, geopolitical and societal risks are dominating the risk landscape among G20 business leaders as they continue to address immediate concerns around significant market turbulence and intensifying political conflict.

Geo-economic confrontation was identified as the top risk by two G20 countries. Other respondents referenced the potential for state collapse and lack of widespread digital services and digital inequality as top concerns.

The top risk in Europe is rapid and/or sustained inflation, followed by the cost-of-living crisis, severe commodity price shocks or volatility, geo-economic confrontation and severe commodity supply crises.

The study also highlights marked regional variations between advanced economies and emerging markets.

While economic risks associated with rapid and/or sustained inflation were identified as the top risk by respondents in Europe, Latin America and the Caribbean, east Asia and the Pacific, societal concerns associated with the cost-of-living crisis dominated in the Middle East and Africa, and sub-Saharan Africa. In central Asia and south Asia, interstate conflict and debt crises topped concerns respectively.

The top risks by region are shown in the chart below.

Click to open in larger view. Credit: Marsh McLennan/WEF

This year’s results are in sharp contrast to 2021’s findings, when cyber and environmental risks featured much more prominently.

Environmental issues featured “significantly lower” as a top five risk for G20 countries, noted the WEF. And despite the growing threat of cyberattacks on critical infrastructure, this and other technological risks ranked among the least commonly-cited top five risks this year, it added.

Zurich Insurance, which supported the survey along with Marsh, warned that environmental risks and the transition to net zero cannot be ignored. It urged business leaders not to take their eyes off this pressing issue.

Peter Giger, group chief risk officer at Zurich Insurance, said: “The transition to net zero has dropped too far down on the short-term agendas of many business leaders.

“After a jump of two billion tons in 2021, the rise in global CO2 emissions this year is much lower – closer to 300 million tons. This is thanks to growth in the use of renewable energy and electric vehicles. Despite these positive developments, we are still not on track to reach the 1.5°C target.

“Yet the impacts of climate change are both short term and long term. Even in the current geopolitical and economically challenging environment, we need to focus on building a cleaner, more affordable and more secure energy system, if we hope to keep a net-zero future within grasp,” he added.

Carolina Klint, risk management leader in continental Europe at Marsh, said G20 business leaders are rightly focused on the “immediate and urgent” economic and geopolitical risks they face.

“However, if they are overlooking major technological risks this could create future blindspots, leaving their organisations exposed to severe cyber threats that could seriously impact their long-term success,” she warned.

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