As the world takes its next steps in the COVID-19 pandemic, the World Economic Forum’s 2020 Global Risks Report provides context.
For the first time in the history of the Global Risks Perception Survey, environmental concerns dominate the top long-term risks by likelihood among members of the World Economic Forum’s multistakeholder community; three of the top five risks by impact are also environmental.
The graphic at right paints this picture starkly and colorfully. Whether measured by likelihood or impacts, the blue economic risks that dominated survey results from 2008-2012 have given way to a solid wall of green environmental risks in 2020. These environmental risks include:
- climate action failure
- biodiversity loss
- extreme weather
- natural disasters
- human-made environmental disaster
The World Economic Forum is not a tree-hugging organization. It is a members only group of some 1,000 companies that “engages businesses in projects and initiatives – online and offline – to address industry, regional and systemic issues.” Members work in all sectors of the economy: from aerospace to banking, manufacturing to agriculture, IT to insurance, mining to retail. Most of us know of the Forum’s posh annual meeting in Davos. Likely fewer of us noticed its new manifesto on the “universal purpose of a company in the fourth industrial revolution” and its core tenets:
- “The purpose of a company is to engage all its stakeholders in shared and sustained value creation.”
- “A company is more than an economic unit generating wealth. It fulfills human and societal aspirations as part of the broader social system. Performance must be measured not only on the return to shareholders, but also on how it achieves its environmental, social and good governance objectives.”
- “A company that has a multinational scope of activities not only serves all those stakeholders who are directly engaged, but acts itself as a stakeholder – together with governments and civil society – of our global future.”
Chapter 3’s title does not sugar coat climate change: A Decade Left, Confronting Runaway Climate Threat. It relies on the most recent reports of the IPCC, UNEP, and IRENA, as well as those of insurance giant Swiss Re and the Bank of England, to conclude that “climate change is striking harder and more rapidly than
many expected.” Businesses feel this impact, whether from the costliness of delaying the transition away from fossil fuels, uncertainty and riskiness of relying on geoengineered emissions mitigation, or failure of multilateral political cooperation to settle fair rules for all. Ending on this “geopolitical unsettling” that affects environmental, economic, and social wellness, the 2020 Global Risks Report reminds us that
Powerful economic, demographic and technological forces are shaping a new balance of power. The result is an unsettled geopolitical landscape—one in which states are increasingly viewing opportunities and challenges through unilateral lenses. … Beyond the risk of conflict, if stakeholders concentrate on immediate geostrategic advantage and fail to reimagine or adapt mechanisms for coordination during this unsettled period, opportunities for action on key priorities may slip away.