Having warned of the risk of a global “lethal flu” back in 2006, this year’s Global risks report 2021 focuses on the further risks and consequences of today’s pandemic. In particular, the report’s authors – World Economic Forum – said that the event would lead to widening inequalities and social fragmentation.
“In some cases, disparities in health outcomes, technology, or workforce opportunities are the direct result of the dynamics the pandemic created,” the report says. “In others, already- present societal divisions have widened, straining weak safety nets and economic structures beyond capacity.”
A failure to deal with the aftermath of Covid-19 could impact the world’s ability to deal with the existential threat of climate change, the report said.
The three risks that topped the table of short-term (0-2 year) dangers in the report’s annual survey were infectious diseases, livelihood crises and extreme weather events.
The anticipated three-five-year knock-on effects were most likely to include an asset bubble burst, IT infrastructure breakdown, price instability, commodity shocks and debt crises. These events could be followed by breakdowns in interstate relationships and interstate conflict, said the report.
And the survey identified the use of weapons of mass destruction as the most likely longer-term threat, with state collapse, biodiversity threat and adverse advances in technology also featuring prominently.
The top global risk by likelihood in 2021 was the threat of extreme weather events – this has been the report’s top risk every year now since 2017. That was followed by climate action failure and human environmental damage.
While infectious diseases topped the list for the most impactful event for 2021, four of the top seven were climate-risk related.
The report said that climate change impacts were likely to play out disproportionately across countries, exacerbated by long-existing inequalities. “There is only a short window to redress these disparities,” the report said. “A shift towards greener production and consumption cannot be delayed until economies are revived.”
Governments—individually and in coordination—need to catalyse a transformation that amalgamates investment in green and inclusive economic recovery, the report said, using short-term measures to bridge gaps in health, education, employment prospects and social safety nets.
Risk managers also had a role to play. “As governments, businesses and societies survey the damage inflicted over the last year, strengthening strategic foresight is now more important than ever,” the report said. “With the world more attuned to risk, there is an opportunity to leverage attention and find more effective ways to identify and communicate risk to decision-makers.”
Read the World Economic Forum’s The Global risks report 2021, 16th edition.
For a summary of last year’s report, see here.