The World Economic Forum has recently released its 2024 edition of the Global Risk Report. The Report examines global risks over one-, two-, and 10-year horizons to support decision-makers in adopting a “dual vision” that considers both short- and longer-term risks. The Report’s short-term outlook is predominantly negative globally, while the 10-year forecast is even more pessimistic, with 63% anticipating a stormy or turbulent future.
In line with the previous WEF reports, environmental risks continue to dominate the risk landscape over all three timeframes. The report also highlights the alarming possibility of crossing at least one climate tipping point within the coming decade. Recent research suggests that the threshold for triggering long-term, potentially irreversible and self-perpetuating changes to select planetary systems is likely to be passed at or before 1.5°C of global warming. This level of warming is expected to be achieved by the early 2030s, underscoring the urgency of the situation.
As can be seen in the figure above, the report identifies the four most critical risks for the coming decade as
- Extreme weather events
- Critical change to Earth systems
- Biodiversity loss and ecosystem collapse
- Natural resource shortages
Pollution is also noted as one of the top ten risks.
The report also includes short-term time horizon analysis drawn from the WEF’s 2023 Executive Opinion Survey, which shows that Australian businesses are currently most worried about economic downturn, inflation, household debt, energy supply shortage, and extreme weather events. The report emphasises that despite the potential for a “softer landing” from the environmental, economic, and social turbulence of recent years, the outlook remains highly uncertain.
Given the emerging trends in the risk landscape as identified by the report, it is not surprising that we are seeing companies increasingly engaged in the process of climate transition risk management and opportunity identification. While no one can predict exactly how the future will play out, it is certain that organisations positioning themselves early and effectively on these issues stand to be more resilient and competitive in the long run, while demonstrating leadership in an area of rapidly evolving stakeholder expectation and regulatory requirement. It is not just about mitigating and managing risk, but also capturing opportunities for sustainable growth and innovation. The pursuit of climate-related opportunities is not merely a strategic decision but a fundamental commitment to long-term viability, responsible business practices, and a positive impact on the global community.
If you need assistance with your climate risk management and transition planning, please feel free to reach out to us for a chat. Over the last few years, we have been actively developing a suite of climate transition support tools, resources, and workshops, all aimed at helping simplify this complex area for our clients, enabling the identification of clear, actionable and tailored strategies, depending on your specific needs and operational circumstance.
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