Business leaders around the world rate unemployment as the most concerning risk followed by infectious diseases, fiscal crisis and cyberattacks, but climate risks are on the rise, according to a new report from the World Economic Forum, Marsh, and Zurich Insurance Group.
“The employment disruptions caused by the pandemic, rising automation and the transition to greener economies are fundamentally changing labor markets. As we emerge from the crisis, leaders have a remarkable opportunity to create new jobs, support living wages, and reimagine social safety nets to adequately meet the challenges in the labor markets of tomorrow,” said Saadia Zahidi, managing director for the World Economic Forum.
While most of the risks are financial in nature, the report shows a growing awareness of natural catastrophes, extreme weather events, biodiversity loss, collapse of ecosystems, and failure to adapt to climate change. These risk all rose on the radar for global executives.
“COVID-19 is distracting us from certain long-term risks that will be around long after the current crisis is resolved. But the pandemic is also having the positive effect of leading many to reassess priorities. This, I hope, will ensure that businesses advance their risk resilience strategies and result in decisive and impactful action to combat existential risks like climate change,” said Peter Giger, group chief risk officer for Zurich.
The report can be viewed on an interactive map outlining the top risks by region. In North America, cyberattacks remain the top concern, and data fraud/theft came in third after infectious disease. In Europe, infectious disease and cyberattacks took the top spots for risks, following by unemployment.
Understanding the risks that present the biggest challenges to businesses can help develop a plan for preparation and recovery.
“The COVID-19 crisis has shone a spotlight on organizational resilience. As firms look to the future, they are matching their risk and resilience arrangements with a threat landscape marked by significant customer and workforce behavioral shifts. Just as economic and climate concerns will require firms to refocus business plans, a greater reliance on digital infrastructures will mean a marked increase in cyber risk exposures. To optimize recovery, organizations will need to build greater preparedness into their business models in order to be more resilient in the face of future disruptions,” said John Doyle, president and chief executive officer of Marsh.