Global risks are dominated by the environment and climate change, and by the connected world and Internet of Things, according to the World Economic Forum’s annual Global Risks Report, which also named inequality among the three major risks.
The WEF survey – which polled 750 global risk experts – last year named energy price shocks among its most significant risks, but that concern has receded, and at the report launch Cecilia Reyes, chief risk officer at Zurich Insurance, noted that the capital cost of renewable energy installations had continued to fall dramatically. But despite positive action on climate change such as continued support for the Paris Agreement, environment risk remains top of the agenda, partly because the outcomes – such as extreme weather events – have major societal impacts.
Last year the WEF found that while US interviewees rated cybersecurity rated one of the highest risks it was rated low elsewhere. But this year it was one of the issues that rated the connected world one of the most important risks. The proliferation of sensors in the business and domestic sphere, the use of robotics and the spread of artificial intelligence presented a ‘broad attack surface’ for cuber attacks, WEF said. The connected world also raised issues around liability, because consumers would be less accepting of errors in ‘balck box’ decision-making than human error. Changing patterns of employment would also have societal effects. The WEF said the connected world offered major benefits as well as potential risks, and said it urgently needed better and more agile governance.