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Unemployment & Spread of Infectious Diseases Top the World Economic Forum’s Risk Report

Colin Calleja , Manager, Risk Advisory Services |

14 October 2020

 

Unemployment and the spread of infectious diseases are the top two risks for global business leaders in 2020, surpassing fiscal crises and cyberattacks that move into third and fourth place, according to the World Economic Forum’s (WEF) latest survey. Unemployment moved from third place globally last year to become the number one risk facing today’s business leaders.

 

The survey asked more than 12,000 business leaders to select their top risks from a list of 30. It was conducted between January and July. Profound social instability completed the top five global risks.

 

Meanwhile, spread of infectious diseases is the number one risk for European business leaders. Driven by COVID-19, the spread of infectious diseases rose 28 places in the global survey to second and also takes the top spot in Europe / Asia and East Asia/Pacific. Infectious diseases featured in the top five risks for all regions except South Asia.

 

However, it is evident that COVID-19 has “distracted” businesses from long-term risks that will outlive the current pandemic.

 

Cyberattacks, Europe’s top risk last year, take second place in the 2020 survey, followed by unemployment. Asset bubble risk has slipped from second place to fifth in Europe, behind fiscal crises in fourth position and asset bubble in fifth.

 

The top risks are mainly economy-related, even though climate-related risks have also risen up the chart. Globally, natural catastrophes increased seven places and averaged 15.8% of responses, while extreme weather rose by five places. Biodiversity loss and ecosystem collapse was up eight places and failure of climate-change adaption was two places higher in the 2020 survey. Terrorist attacks, meanwhile, fell nine places in the global survey.

 

The current pandemic is driving businesses to increase resilience as this is having the positive effect of leading many to reassess priorities. As firms look to the future, they are matching their risk and resilience arrangements with a threat landscape marked by significant customer and workforce behavioural shifts. This, hopefully, will ensure that businesses advance their risk resilience strategies and result in decisive and impactful action to combat existential risks like climate change.

 

Having said this, due to businesses relying more on digital infrastructures, cyber risk exposures are consequentially increasing. To optimise recovery, organisations will need to build greater preparedness into their business models in order to be more resilient in the face of future disruptions. This includes tackling the intersecting risks of pandemic, financial risks and climate change which will surely be a cornerstone of the desired new normal.

 

WEF’s Top 5 Global Risks 2020

WEF’s Top 5 Risks 2020

Unemployment

Spread of Infectious Diseases

Spread of Infectious Diseases

Cyberattacks

Fiscal Crises

Unemployment

Cyberattacks

Fiscal Crises

Profound Social Instability

Asset Bubble

 

The WEF’s Global Risks Report 2020 can be accessed through this link.

 

Independent Advice from BDO

Organisations are required to manage their risk profile to protect themselves from threats which may affect their interests and objectives, their market share, and their future perspectives.

 

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.

 

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 here:

 

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