A new report has shown that issues of climate change and biodiversity loss may not be a top priority for business leaders as new financial risks are emerging every year and current economic disruptions take centre stage.
The report revealed that while issues like the cost of living crises have been mentioned as the top short-term danger by experts across industries, environmental challenges are the top long-term concerns across the board and are the issues that businesses are least prepared to tackle.
Over 1,200 experts from academia, business, government, the international community, and civil society contributed to the World Economic Forum’s (WEF) Global Risks Report 2023, which gathered their top ideas on how the world’s risks landscape is changing. The survey data for the report’s 18th edition was gathered from September to October 2022.
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The report said the cost-of-living crisis bubbled to the top of global short-term risks (over the next two years) as the Russia-Ukraine war and the aftereffects of the pandemic “ushered in skyrocketing inflation, a rapid normalization of monetary policies and started a low-growth, low-investment era”.
In order to manage current and upcoming shocks as effectively as possible, the report advised enterprises to improve their risk identification and foresight, adjust the present value of future risks, invest in multi-domain risk preparedness, and strengthen preparedness and response cooperation.
Story was adapted from Financial Management Magazine.
