G20 business leaders are more focused on short-term economic concerns – like rapid inflation, debt crises, and the cost of living crisis – than on environmental and cyber risks, according to a recent survey.
- These findings were published in this year’s Executive Opinion Survey, conducted by the World Economic Forum’s Centre for the New Economy and Society.
- Over 12,000 business leaders from 122 countries participated in this survey, which comes ahead of the G20 summit in Indonesia later this month.
- Geo-economic confrontation was identified as the top risk by two G20 countries.
According to the survey, a 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.
This was followed jointly by debt crises and the cost of living crisis (21%). Other respondents referenced the potential for state collapse and lack of widespread digital services and digital inequality as top concerns.
In the US, the top five risks are debt crisis, rapid and/or sustained inflation, geo-economic confrontation, cost of living crisis comes in fourth place, followed by failure of climate-change adaptation.
In Canada’s case, like for the UK, the cost of living crisis is its top risk, followed by debt crisis, rapid and/or sustained inflation, failure of climate-change adaptation and asset bubble burst.
This year’s findings are in sharp contrast to 2021’s findings, particularly in key areas such as technological and environmental risk, the survey found.
Environmental issues featured significantly lower as a top five risk for G20 countries compared to last year.
Business leaders are not prioritising these issues despite mounting environmental pressures and rising environmental regulation over the last 12 months – and factoring in adjustments to the list of risks surveyed this year in response to evolving economic, geopolitical, and environmental trends.
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.
More broadly, the findings also highlight marked regional variations between the advanced economies and emerging markets. While the economic risks associated with rapid and/or sustained inflation were identified as the top risk by respondents in Europe, Latin America and the Caribbean, and East Asia and Pacific, societal concerns associated with the cost of living crisis dominated in the Middle East and Africa and Sub-Saharan Africa.
In Central Asia and South Asia, interstate conflict and debt crises topped concerns respectively.
G20 business leaders are rightly focused on the immediate and urgent economic and geopolitical risks they are facing right now.Carolina Klint, Risk Management Leader, Continental Europe, Mars
If they are overlooking major technological risks this could create future blind spots, leaving their organisations exposed to severe cyber threats that could seriously impact their long-term success.
After a jump of 2 billion tons in 2021, the rise in global CO2 emissions this year is much lower – closer to 300 million tons. This is thanks to growth in the use of renewable energy and electric vehicles. Despite of these positive developments, we are still not on track to reach the 1.5°C target.
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, insurers 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.