Huge opportunity for risk profession as WEF suggests a well managed fallout from COVID-19 could unleash new era of prosperity

As lockdowns are eased and economies restart, leaders and policy makers are at a crucial stage in shaping the outcome following the COVID-19 pandemic, according to the World Economic Forum.

Broadly outlining the potential outcomes in two polarised scenarios, it points to the opportunity leaders now have to embed "greater societal equality and sustainability" into the recovery, thereby unleashing a "new era of prosperity"; or else risk considerable economic distress and social discontent.

These are the conclusions of a WEF report released today and based on the views of almost 350 senior risk professionals.

Unsurprisingly, the immediate economic fallout from the pandemic and the responses to it dominates companies’ risks perceptions. Prolonged recession, weakened fiscal position of major economies, greater protectionism and the collapse of a major emerging market feature amongst respondents' key concerns.

There is also quite justified anxiety that some known risks may be amplified by the crisis and new ones may emerge. Half of the respondents identified bankruptcies and industry consolidation, failure of industries to recover and a disruption of supply chains amongst their immediate concerns. Cyber attacks and data fraud also feature high on this list.

There is a huge opportunity here for risk professionals to make demonstrable contributions to the recovery of their own organisations.

“The crisis has devastated lives and livelihoods. It has triggered an economic crisis with far-reaching implications and revealed the inadequacies of the past,” said managing director of WEF, Saadia Zahidi. "As well as managing the immediate impact of the pandemic, leaders must work with each other and with all sectors of society to tackle emerging known risks and build resilience against the unknown. We now have a unique opportunity to use this crisis to do things differently and build back better economies that are more sustainable, resilient and inclusive."

Peter Giger, group CRO of Zurich Insurance Group and WEF partner, added: “COVID-19 has shown it is crucial to keep existential risks in focus, and climate change is one of these. As we reboot our economies, changes in working practices and in attitudes towards travelling, commuting and consumption all point to new ways to achieve a lower-carbon and more sustainable future.

"Decisions taken now will determine how these risks or opportunities play out.”

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