A prolonged global recession, a surge in bankruptcies and a rise in cyberattacks due to a sustained shift in working patterns are the top three near-term risks facing business from Covid-19. These findings emanate from a new survey of risk professionals commissioned by the World Economic Forum (WEF).
The survey polled nearly 350 risk specialists from business, government civil society and academia. It asked them to look ahead to the next 18 months and rank their biggest concerns in terms of likelihood and impact facing business and the world. The findings are presented in the Covid-19 Risks Outlook: A Preliminary Mapping and Its Implications report.
The survey ranked a prolonged global recession as the most worrisome risk for business at 66.3%, followed by a surge in bankruptcies with a wave of consolidation at 52.7%. Cyberattacks and data fraud due to a sustained shift in working patterns was the joint-third most-feared business risk at 50.1%, along with a failure of industries or sectors in certain countries to properly recover.
Protracted disruption of global supply chains was fourth at 48.4%, with tighter restrictions on cross-border movement of people and goods next at 42.9%. That was followed by another global outbreak of Covid-19 or different infectious disease at 35.4%.
The report, published in partnership with Marsh & McLennan and Zurich Insurance Group, also puts prolonged global recession as the most likely Covid-19 fallout facing the world and of the greatest concern, at 68.6% and 58.5%, respectively.
The next most likely risks facing the world were a surge in bankruptcies and a wave of industry consolidation (56.8%), failure of industries or sectors in certain countries to properly recover (55.9%), high levels of structural unemployment – especially among the youth (49.3%), and tighter restrictions on the cross-border movement of people and goods (48.7%).
The top five risks of greatest concern were completed by high levels of structural unemployment – especially among the youth (43.8%), another global outbreak of Covid-19 or different infectious disease (40.1%), weakening fiscal positions in major economies (39.2%), and failure of industries or sectors in certain countries to properly recover (35.4%).
The report also sounds the alarm bell on longer-term risks. It argues that we are not ready for the knock-on effect of far-reaching environmental, societal, and technological risks. But a “green recovery” and more resilient, “cohesive, inclusive and equal societies” can emerge if leaders act now, it adds.
It calls on leaders to consider an “avalanche of future systemic shocks” such as the climate crisis, geopolitical turbulence, rising inequality, strains on people’s mental health, gaps in technology governance, and health systems under continued pressure.
“The crisis has devastated lives and livelihoods. It has triggered an economic crisis with far-reaching implications and revealed the inadequacies of the past. As well as managing the immediate impact of the pandemic, leaders must work with each other and with all sectors of society to tackle emerging known risks and build resilience against the unknown. We now have a unique opportunity to use this crisis to do things differently and build back better economies that are more sustainable, resilient and inclusive,” commented Saadia Zahidi, managing director of the WEF.
The WEF has also published a second report – Challenges and Opportunities in the Post-COVID-19 World – that draws on the experience and insights of thought leaders, scientists and researchers to outline emerging opportunities to build a more prosperous, equitable and sustainable world.
BDO is here to help.
We do not merely see “more controls are required” or “risks need to be mitigated further” as the answer to every question. We take a broader look and consider the business environment as well as its requirements when recommending or implementing solutions.
BDO Malta has put together a COVID-19 Risk Response Team to assist you in keeping your business running. Our Risk Response Team includes Business Risk Advisory, Technology & Cybersecurity Advisory and People Services who come together to ensure your business continuity and plan for recovery.
If you would like to learn more about how BDO Malta can help your business, contact us today on [email protected] or get in touch:
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