Climate and cyber risks topped by short-term economic concerns for business

The impact of rapid inflation, debt crises, and the cost of living crisis are the biggest threats to doing business over the next two years in G20 countries, according to new data from the World Economic Forum.

The survey of over 12,000 business leaders from 122 countries between April and August 2022, comes against a backdrop of COP27 in Egypt and the G20 summit in Indonesia later this month. It found that 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.

Rapid and/or sustained inflation is the most commonly cited top risk in G20 countries surveyed this year, with over one-third (37%) of G20 countries identifying it as a top concern, followed jointly by debt crises and the cost of living crisis (21%). 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.

This year’s findings are in contrast to 2021’s findings, particularly in areas such as technological and environmental risk. Despite mounting environmental pressures and rising environmental regulation over the last 12 months, environmental issues featured significantly lower as a top five risk for G20 countries in this year’s report, compared to 2021. In addition, despite the growing threat of cyber-attacks on critical infrastructure, this and other technological risks ranked among the least commonly cited top five risks this year.

Carolina Klint, risk management leader for continental Europe at Marsh, said: “G20 business leaders are rightly focused on the immediate and urgent economic and geopolitical risks they are facing right now. However, if they are overlooking major technological risks this could create future blind spots, leaving their organizations exposed to severe cyber threats that could seriously impact their long-term success.”

Peter Giger, group chief risk officer at Zurich Insurance Group, added that environmental concerns must not be dismissed as a problem to deal with at a later date: “The transition to net-zero has dropped too far down on the short-term agendas of many business leaders. 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.”

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