Global Risks Report 2024: a summary

The World Economic Forum recently released its Global Risks Report which explores some of the most severe risks we may face over the next two years and the next decade.

This much-anticipated report brings together the collective intelligence of nearly 1,500 global leaders across academia, business, government, the international community and civil society.

It’s not an easy read, but it’s hugely important because we need to be prepared and we need to help prepare our clients and beneficiaries. Crucially, even the most high-risk events can be avoided or weathered by collaboration and action.

They identify four structural forces that are the most materially influential to the global risks landscape:

·      technological acceleration;

·      geo-strategic shifts;

·      climate change;

·      and demographic bifurcation (changes in the size, growth and structure of populations around the world).

As the image below shows, over the next 2 years global risks ranked by severity are:

 

1.  Misinformation and disinformation

This is especially important as

'close to three billion people are expected to head to the electoral polls across several economies – including Bangladesh, India, Indonesia, Mexico, Pakistan, the United Kingdom and the United States – over the next two years.’

Interestingly, the report states that the risk doesn’t just relate to public discourse and elections, but also to how it’s being addressed, eg governments trying to control ‘what’s true’ can lead to the repression of the press and information sharing.

2.  Extreme weather events

We have seen many dramatic images of record-breaking heatwaves and extreme weather events in 2023. New records in heat conditions, drought, wildfires and flooding are anticipated.

Despite this, a failure to adapt to climate change is not a relatively high concern for some - and this failure, as much as the events themselves, can lead to more devastation.

3.  Societal polarisation

Political polarisation is due to increase, as people's distrust in media and governmental institutions deepens.

4. Interstate armed conflict

Armed conflict wasn't in the top 10 risks in their previous reports, but wars in Ukraine, Gaza, and Yemen have already changed the world, and might influence several currently frozen conflicts.

‘The growing internationalisation of conflicts by a wider set of powers could lead to deadlier, prolonged warfare and overwhelming humanitarian crises.’

5.   Cyber insecurity

Even though our understanding of AI and other technologies increases every day, our cyber vulnerability has never been greater.

6.  Lack of economic opportunity

'The narrowing of individual pathways to stable livelihoods would also impact metrics of human development – from poverty to access to education and healthcare.'

7.   Inflation

 

8. Involuntary migration

 

9.    Economic downturn

‘Any amplification of the Middle East conflict could trigger price spikes in energy and further disrupt shipping routes, compounding continued impacts from the war in Ukraine.

The cost-of-living impact of persistent inflation, perceived to be declining in 2024, could resurge as the continued impact of elevated prices persists.’

10. Pollution

The top five risks identified by the Executive Opinion Survey (EOS) in the United Kingdom are:

1. Economic downturn

2. Inflation

3. Energy supply shortage

4. Household debt

5. Labour shortage

The world in 2034

The top global risks over the next 10 years are dominated by climate issues.

1. Extreme weather events

2. Critical change to the Earth's systems

3. Biodiversity loss and ecosystem collapse

4. Natural resource shortages

Thresholds for large-scale and self-perpetuating changes to planetary systems are likely to be exceeded within the next decade, namely:

• low-latitude coral reefs die-off (high confidence),

• collapse of the Greenland and West Antarctic Ice Sheets (high confidence),

• and abrupt thawing of permafrost releasing huge amounts of carbon (medium confidence).

Environmental risks can lead to very real social risks, namely food, water, and health insecurity.

·      We already see these risks materialising today, but going forwards, reduced agricultural productivity and extreme weather can potentially cause simultaneous harvest failures in key regions.

·      The pace and scale of climate-change adaptation efforts are already falling short, with societies increasingly exposed to environmental impacts to which they may be unable to adapt, fuelling displacement and migration.

·      These impacts are affecting people in various previously underestimated ways. For example, nearly 521,000 homes in Australia are predicted to be uninsurable by 2030 due to the risks of extreme weather.

After the top 4 climate-related risks, the report features 6 other risks over the next decade:

• Misinfomation and disinformation

• Adverse outcomes of AI technologies

• Involuntary migration

• Cyber insecurity

• Societal polarisation

• Pollution

What can businesses do?

‘If companies adopt responsible business practices and investment decisions, they will reap reputational and performance benefits while making the wider economic and financial system more resilient and prepared to face the risk of Economic downturn.’

•  Responsible business practices include ethical and environmentally responsible supply chains.
  

• Cooperation is necessary to address these issues, but as global cooperation in an increasingly fragmented world is difficult, we should maximise alternative paths of varying degrees of collaboration.

This report reminds us that the world is more interconnected than ever and that each action can have multiple impacts - negative or positive.

Final words

As the report states:

‘The future is not fixed. A multiplicity of different futures is conceivable over the next decade. Although this drives uncertainty in the short term, it also allows room for hope. 

Alongside global risks and the era-defining changes underway lie unique opportunities to rebuild trust, optimism and resilience in our institutions and societies.’

Despite many challenges facing the world, this analysis definitely doesn't call for giving up, but instead for doubling down our efforts to build a better world.

Read the full report here.

You can find more information about our climate change courses for:

• Board Directors here

• Lawyers here, and

• Foundations here.