Global risks “stretching the world’s adaptive capacity to its limit,” WEF warns

Global risks “stretching the world’s adaptive capacity to its limit,” WEF warns


Global risks “stretching the world’s adaptive capacity to its limit,” WEF warns | Insurance Business America















AI-driven misinformation, climate change emerge as top concerns in World Economic Forum risk report

Global risks


Risk Management News

By
Gia Snape

Systemic changes in global power dynamics, climate, technology, and demographics are pushing the world’s adaptive capacity to the edge, research from the World Economic Forum (WEF) has found.

The increasing complexity of the global risk landscape demands urgent collaboration and novel approaches, according to the latest WEF Global Risks Report.

Leaders of the WEF, Marsh and Zurich Insurance Group unpacked the 2024 Global Risks Report at a media conference in London on Wednesday (January 10).

The 19th edition of the annual report found that misinformation and disinformation are the most significant short-term concerns, while extreme weather and climate change pose the greatest long-term challenges. More than 1,400 global risk experts, policymakers, and industry leaders contributed their views.

“We’re entering a new era of risk now,” said Carolina Klint (pictured – middle right), chief commercial officer of Europe at Marsh McLennan. “It’s time to be a little more creative and collaborative in our approach to building resilience.”

John Scott (pictured – far right), head of sustainability risk at Zurich Insurance Group, doubled down on the need for collaboration, especially when it comes to the energy transition.

“While there are many different approaches to managing risks, there’s no one silver bullet. We need to pull together all these different approaches,” Scott said.

“We need to do a lot more in terms of tightening, deepening, and speeding up emissions reductions around the world.”

WEF Global Risks Report 2024 – Misinformation and disinformation could topple world order, risk experts warn

The growth of artificial intelligence (AI) has driven concerns over misinformation, cyberattacks, and cyber insecurity, which have emerged as top risks across all time horizons in the 2024 report.

Klint painted a stark picture of the potential outcomes of AI-driven misinformation.

“The potential impact on elections worldwide over the next two years is significant. It could lead to elected governments’ legitimacy being put into question, and this, in turn, could threaten democratic processes and lead to further social polarization, riots, strikes, or even intra-state violence,” the Marsh McLennan leader said.

Saadia Zahidi (pictured – middle left), managing director of the WEF, noted it was the first time that disinformation and misinformation had been specifically spelled out in the WEF’s annual survey.

The fact that it had jumped to the number-one risk in the two-year outlook showed it was a risk that needed to be taken seriously, especially as many countries are preparing to elect new leaders.

“The speed with which some of that synthetic content can be created, and the fact that it is not tagged or watermarked in many parts of the world, combined with the fact that most people are not educated at present as to the risks of synthetically generated mis- and disinformation – that’s a very potent mix,” Zahidi said.

“Throw that on top of a situation where there are already a lot of economic grievances, and we’re looking at a very difficult combination going into elections.”

Global outlook deteriorating amid escalating risks, WEF report finds

The 2024 risk report also revealed that leaders’ longer-term outlook has turned pessimistic.

About half of those surveyed said that the world was on the precipice of fairly severe risks in the next two years. Meanwhile, another 30% said that catastrophic risks could potentially unfold in that period, Zahidi told reporters at the briefing.

“When you look 10 years out, that 30% grows to nearly 60%,” she said. “Two-thirds of people have an incredibly negative outlook in 10 years’ time, and that is… quite different from last year, where, in the longer term, there was still optimism.”

Zahidi also drew attention to risks like the adverse impact of AI, which ranked relatively low in the two-year outlook but jumped significantly in the 10-year outlook.

“Deep concern around the short-term crises that are absorbing leadership today is simply not leading to the kind of planning that can deal with some of these longer-term risks,” she said.

Klint pointed out that continuing economic hardship has contributed to a gloomier outlook in 2024.

“We might be starting to control inflation, but it still means that prices are a lot higher than they were a year or two years ago,” she said.

“While the largest economies and the largest companies might be fairly insulated from the impact of [increasing interest rates], smaller businesses and mortgages are not, so we’re starting to feel that bite.”

Last year, the cost-of-living crisis was named the most significant risk in the two-year outlook, followed by natural disasters and extreme weather events and geoeconomic confrontation. Failure to mitigate climate change emerged as the top long-term risk.

What are your thoughts on the World Economic Forum’s top global risks for 2024? Tell us in the comments.

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