Our key takeaway: The top ten greatest risks for the next decade span pretty much every category you can think of, from climate change and biodiversity loss, to food insecurity and the cost-of-living crisis, to economic instability and conflict. These crises won’t play out alone; rather they have complex interdependencies and are likely to roll up into what the World Economic Forum (WEF) has termed “polycrises”—“where disparate crises interact such that the overall impact far exceeds the sum of each part.” This may be disheartening news for anyone who sees how challenging it is to deploy sufficient resources and capacity to resolving specific issues, let alone resolving multiple problems at one go. However, the WEF report sees daylight in the development of multi-pronged solutions to address multi-horned problems. Creating these solutions will not be easy and will require deeper understanding of the different ways that risks interact. From our perspective, the private sector has a vantage point at the forefront of many of these colliding crises, meaning there is a unique role it can play in identifying and investing in these solutions. Some key actions can include bolstering risk assessment and preparedness; looking at issues holistically with considerations for people and planet alongside business risk; protecting workers and ensuring fair wages and decent work; and seeking to partner with other stakeholders to multiply impact.
The World Economic Forum (WEF) published its annual Global Risks Report (January 2023), which presents the results of its latest Global Risks Perception Survey (GRPS) for the coming decade:
- The next ten years will see increasingly interconnected global crises: WEF reports that “[c]oncurrent shocks, deeply interconnected risks and eroding resilience are giving rise to the risk of polycrises – where disparate crises interact such that the overall impact far exceeds the sum of each part.” These polycrises are exponentiated in light of the growing volatility we are seeing in many spaces, including our planet, our societies and our economies: “In the years to come, as continued, concurrent crises embed structural changes to the economic and geopolitical landscape, they accelerate the other risks that we face. More than four in five GRPS respondents anticipate consistent volatility over the next two years at a minimum, with multiple shocks accentuating divergent trajectories.” This includes volatility in climate, economies and political systems, as well as scarcity of food, water and crucial resources—all driving towards increased conflict and humanitarian crises. That said, respondents still see “a window to shape a more secure future through more effective preparedness.” Investments in resilience by governments and the private sector “must focus on solutions that address multiple risks, such as funding of adaptation measures that come with climate mitigation co-benefits, or investment in areas that strengthen human capital and development.”
- Solutions need to address multiple crises, while looking out for “complex externalities and consequences”: Because of the interconnections of polycrises, inputs into addressing global challenges—such as emerging technology, climate-mitigation efforts, approaches to increase food production, etc.—are primed to create multilayered solutions while also posing unintentional consequences for people and planet. One of the key findings of the survey is that “[c]limate mitigation and climate adaptation efforts are set up for a risky trade-off, while nature collapses”; these are the risks that respondents see the world as least prepared for. Specifically, “growing demands on public-and private-sector resources from other crises will reduce the speed and scale of mitigation efforts over the next two years. … As current crises diverts resources from risks arising over the medium to longer term, the burdens on natural ecosystems will grow given their still undervalued role in the global economy and overall planetary health. Nature loss and climate change are intrinsically interlinked – a failure in one sphere will cascade into the other. Without significant policy change or investment, the interplay between climate change impacts, biodiversity loss, food security and natural resource consumption will accelerate ecosystem collapse, threaten food supplies and livelihoods in climate-vulnerable economies, amplify the impacts of natural disasters, and limit further progress on climate mitigation.” Likewise, some of the solutions that could help reduce the pressure of other crises may come with trade-offs of their own. For example, the use of emerging technology may drive better data solutions for food production, environmental protection and beyond, but can also cause externalities like social inequality while allowing governments to restrict privacy, control movement, limit civil society and erode other crucial underpinnings of respect for human rights.
- Acting today to “avert the tipping points” of the future: The report indicates that resolving short-term and medium-term polycrises will require action on multiple fronts and, importantly, a growing recognition of the way in which different stressors act on one another. Protecting against environmental collapse—one of our greatest and most interdependent risks—will take “a combination of conservation efforts, interventions to transform the food system, accelerated and nature-positive climate mitigation strategies, and changes to consumption and production patterns.” “Although the relationship between climate and nature heightens the likelihood of a series of escalating and potentially irreversible feedback loops, it can equally be leveraged to broaden the impact of risk mitigation activities.” For actors like companies, investors and their partners, this means that “investment in resilience must focus on solutions that build preparedness for multiple risks. By restoring biodiversity in soils, for example, regenerative agriculture has the potential to store large amounts of carbon.”