Heads of state and chief executives are still debating topics such unemployment levels and “Recharging Europe” at the World Economic Forum in Davos, yet the very element they are drinking has now been voted as one of the largest global risks.
For the first time the topic of “water crises” has ranked first in the top ten risks in terms of impact, voted for by 900 global leaders in business, academia and government.
The 10th edition of the Global Risks report published ahead of the Davos gathering featured an assessment by experts on the top global risks, in terms of likelihood and potential impact over the coming 10 years.
Water featured above weapons of mass destruction and interstate conflict. Last year water was ranked third.
Axel P. Lehmann, chief risk officer at Zurich Insurance Group, said: “Without doubt, urbanization has increased social well-being. But when cities develop too rapidly, their vulnerability increases: pandemics; breakdowns of or attacks on power, water or transport systems; and the effects of climate change are all major threats.”
The World Economic Forum noted the presence of environmental risks among the top risks when compared with economic ones.
The report’s executive summary said that: “At the same time, past warnings of potential environmental catastrophes have begun to be borne out, yet insufficient progress has been made – as reflected in the high concerns about failure of climate-change adaptation and looming water crises in this year’s report.”
Top 5 Global Risks in Terms of Likelihood
- Interstate conflict with regional consequences (geopolitical risk)
- Extreme weather events (environmental risk)
- Failure of national governance (geopolitical risk)
- State collapse or crisis (geopolitical risk)
- High structural unemployment or underemployment (economic risk)
Top 5 Global Risks in Terms of Impact
- Water crises (societal risk)
- Rapid and massive spread of infectious diseases (societal risk)
- Weapons of mass destruction (geopolitical risk)
- Interstate conflict with regional consequences (geopolitical risk)
- Failure of climate-change adaptation (environmental risk)
John Drzik, president of global risk and specialties at Marsh, said: “Innovation is critical to global prosperity, but also creates new risks. We must anticipate the issues that will arise from emerging technologies, and develop the safeguards and governance to prevent avoidable disasters.”
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