Climate action failure is named as the number one long-term threat to the world, as well as the risk with the potential to cause the most severe impact over the next decade, in the World Economic Forum’s (WEF) 2022 Global Risks Perception Survey.
The Global Risks Report 2022, produced in partnership with Marsh McLennan, SK Group and Zurich Insurance Group, also found that survey respondents perceive societal risks — such as social cohesion erosion, livelihood crises and mental health deterioration — to have worsened the most since the beginning of the COVID-19 pandemic.
With only 11 per cent citing they believe that the global recovery will accelerate, the majority of respondents anticipate that the next three years will be characterised by either consistent volatility or fractured trajectories.
Concerns over cybersecurity failure persist, particularly as the COVID-19 pandemic has increased digital dependency and the majority of industries have endured rapid digitalisation over the last 18 months.
This has intensified the vulnerability of companies and entire industries to cyber threats, with malware and ransomware attacks increasing by 358 per cent and 435 per cent respectively in 2020.
The report states that “threats are outpacing societies’ ability to effectively prevent or respond to them”, warning that greater cyber threats may hinder cooperation and collaboration between states if governments continue to adhere to unilateral protocols to control risks.
However, while technological risks such as digital inequality and cybersecurity failure were found to be important short- and medium-term threats, these fell behind in the long-term rankings.
Societal and environmental risks are identified as the most troubling by respondents over the next five years, though from a long-term perspective, concern over the health of the planet dominates the 10-year horizon.
Environmental risks — namely climate action failure (42.1 per cent), extreme weather (32.4 per cent) and biodiversity loss (27.0 per cent) — are named as the top three critical long-term threats to the world, as well as the most damaging to people and the planet.
The report noted that a “disorderly climate transition”, characterised by divergent trajectories worldwide and across sectors, will create international barriers to cooperation to tackle these risks.
WEF explained: “In a recovering yet diverging global economy, countries will need to transition at varying paces to prevent short-term disruptions from offsetting long-term gains, but the consequences of disparate transitions will be felt worldwide. The least disruptive climate transition measures will be those that holistically integrate the needs of individuals, societies, businesses and planet.”
Captive Insurance Times recently examined trends in climate change-related risks and how a captive can be used to help address these risks as they evolve in frequency and severity.
