Verisk Maplecroft highlights increasingly interconnected ecosystem of risk

The global risk landscape in 2024 “will remain locked in a process of sweeping realignment that is amplifying a complex set of systemic risks that are increasingly transcending borders and sectors”. This is according to Verisk Maplecroft’s Global Risk Agenda 2024, which has identified the top ten risk areas to watch. These comprise disruptive technologies, sustainability and resilience regulation, resource governance and security, global progress on human rights, transition and mitigation, threats to the natural environment, government change and political stability, impacts of climate change, conflict and security, and geo-economic fragmentation. Jimena Blanco, chief analyst, global risk insight, Verisk Maplecroft, said: “The common thread is a continued shift towards greater geostrategic misalignment between competing worldviews, which is manifesting across an increasingly interconnected ecosystem of risk. While multinational business has always had to manage political, economic, social, security, environmental, and regulatory risks, the difference now is not only the pace at which these issues are intersecting, but also the less predictable nature of how they are impacting each other.” She added: “The complexity and disruptive potential of these interconnecting risks has intensified rapidly since 2020, in a chain reaction that is delivering a higher risk baseline year on year. To be more resilient in the decades to come, businesses need to adjust their strategies now. This poses the challenge of managing short-term threats while laying the foundations to counter various future threat scenarios, increasing the risk of strategies throughout an organisation being derailed.” In Europe, corporates, investors, and insurers will need to contend with a dynamic risk landscape in 2024, said Verisk Maplecroft. It has identified the top five risks to keep tabs on, comprising the potential for an electoral swing to the right to deliver a less progressive and more Eurosceptic EU, weak economic fundamentals to erode the UK’s climate ambitions ahead of a crunch election, disruption and policy shifts linked to farmer protests, the continued geopolitical fallout from the war in Ukraine, and waning appetite to drive forward the energy transition in some quarters. On the latter, which Verisk Maplecroft calls “Europe’s transition conundrum”, continental Europe’s performance on the firm’s sovereign ESG ratings shows that 27 countries have registered declining scores this past year, compared with just 11 improvers (and six unchanged). Notable fallers are Germany, Belgium, Hungary, and Poland, as well as the likes of Portugal, Ireland, and the Scandinavians, mostly due to a significant deterioration on the transition risk dimension of the Verisk Maplecroft ratings, which it says underlines the continuing difficulties of reconciling energy security needs with the energy transition. It adds: “As inflation eases in 2024, recent social-pillar weaknesses should subside, with the notable exception of the UK, due to the ongoing impact of the cost-of-living crisis. Nevertheless, tensions surrounding the cost of the transition will continue to play out in multiple arenas, from farmers’ protests to the rise of the right-wing populist anti-ESG movement. This is also encouraging a more retrograde social policy stance on the part of certain governments, creating business-operating and investor risks.”

Verisk Maplecroft highlights increasingly interconnected ecosystem of risk

Global Risk Agenda 2024 report reveals global risk landscape

Want to read this article?

Read Next

Shipping and supply chains withstand Red Sea conflict

Rims inks education exchange agreement with auditing group

Transactional risk market in Asia continues to grow says Marsh

Ping An Insurance reports 48% increase in net profit

Deepseek AI model could improve Chinese insurers’ operating efficiency

Shipping and supply chains withstand Red Sea conflict

Rims inks education exchange agreement with auditing group

Transactional risk market in Asia continues to grow says Marsh

Ping An Insurance reports 48% increase in net profit

Deepseek AI model could improve Chinese insurers’ operating efficiency

Keep yourself informed

Sign up for Commercial Risk’s newsletters

Want to read this article?

Read Next

Shipping and supply chains withstand Red Sea conflict

Rims inks education exchange agreement with auditing group

Transactional risk market in Asia continues to grow says Marsh

Ping An Insurance reports 48% increase in net profit

Deepseek AI model could improve Chinese insurers’ operating efficiency

Related Articles

Keep yourself informed

Sign up for Commercial Risk’s newsletters