Everyone’s favourite risk report is back, with the 20th edition of the World Economic Forum (WEF) Global Risk Report making its way into your writer’s inbox late last week. The report, as always, coincides with the popular WEF Annual Meeting held in Davos, Switzerland, 20-24 January 2025.
Disclaiming and explaining
Like most of the reports of this nature, Global Risk Report 2025 is full of disclaimers and explainers. Early on, it offers some fascinating insights into the survey process and its outcomes, stating that, “The findings, interpretations and conclusions expressed herein are a result of a collaborative process facilitated and endorsed by the WEF, but whose results do not necessarily represent [our] views.” The ‘our’ in this quote spans the WEF, its members, and other stakeholders.
So, while the forum endorses the process for identifying and ranking global risks, it is not beholden to the findings. This should not concern the thousands of corporate risk managers who use the report findings to anchor or influence their risk management plans. After all, the report merely serves as a starting point for businesses to assess the risk landscape they operate in. This year’s report offers the usual triple-ranking of risks: First, the risks that will most likely present a material crisis on a global scale in 2025; then, the global risks ranked by severity over the short- and long-term, two years and 10 years respectively.
The report encapsulates findings from the Global Risks Perception Survey (GRPS) 2024-2025, which captures insights from over 900 experts worldwide. Per the report’s executive summary, it considers not only the survey findings and the range of implications, but also provides six in-depth analyses of selected risk themes.
So, what does the overarching picture look like? For 2025, respondents were most concerned over state-based armed conflicts (23%); extreme weather events (14%); geoeconomic confrontation (8%); misinformation and disinformation (7%) and social polarisation (6%).
Environmental concerns dominate long-term tables
On a two year view, the top five risks were misinformation and disinformation, followed by extreme weather events, state-based conflict, social polarisation, and cyber espionage and warfare. These risks slotted under four of the five overarching risk categories tracked by the report, namely environmental; geopolitical; social; and technological. On a 10 year view, four of the top five risks fell under the ‘environmental’ heading, including extreme weather events, biodiversity and ecosystem collapse, critical change to earth systems, and natural resource shortages. Misinformation and disinformation, a technological risk, came in fifth.
Your writer was surprised by the absence of economic risks in the top five risk rankings, regardless of time frame. The top ranking for a risk under this category was for an economic downturn in the current year; 5% of survey respondents were concerned about this, ranking it in sixth place. Another economic risk, crime and illicit economic activity (2%) came in at a lowly 15th on the 2025 ranking. Risk events belonging to the ‘economic risks’ category did not feature in the top 10 global risk concerns over two or 10 years, perhaps highlighting humanity’s increasing preoccupation with abstract issues over tangible metrics.
Today’s newsletter is a precis of the key findings shared in the 100-page report. “As we enter 2025, the global outlook is increasingly fractured across geopolitical, environmental, societal, economic, and technological domains,” notes the report, under the heading ‘declining optimism’. Yes, dear reader, it seems you will encounter more ‘cup half empty’ types during your 2025 interactions. Reasons for pessimism include the rising frequency and severity of extreme weather related catastrophes, and the potential for major conflicts to expand or escalate.
Real danger in overconfidence
“Optimism is limited as the danger of miscalculation or misjudgement by political and military actors is high,” the report notes. They may be onto something here, given how confident incoming US President Donald Trump is in his capability to end Middle East tensions and the Russia-Ukraine war. According to the latest report, the majority of respondents (52%) anticipate an unsettled global outlook over the coming two years with another 31% expecting turbulence. The outlook is pessimistic on a two year view, and even worse over 10 years.
The latest survey reflects “scepticism that current societal mechanisms and governing institutions are capable of navigating and mending the fragility generated by the risks we face today.” Under its second key findings heading, the report laments what it describes as ‘deepening geopolitical and geoeconomic tensions’. Immediate concerns centre around state-based armed conflict, singled out by 23% of respondents as the most impactful risk globally for the current year. Aside from the two conflicts already mentioned, the report flags Sudan as an area of concern.
One of the challenges your writer faces in commenting on this type of research is the vagueness and leading nature of its findings. The third heading shared in the ‘key findings’ section is referenced as ‘a growing sense of societal fragmentation’. Fair enough; but what does this phrase mean. According to the report, “Societal fractures are central to the overall risks landscape … [with] inequality in wealth and income perceived as the most central risk of all.” Your writer reckons has long maintained that levels of absolute poverty is a better measure than inequality here. Phrased differently, inequality in the US is way less of a risk than inequality in South Africa.
Sculpting the risk landscape
“Inequality,” continues the report, “is weakening trust and diminishing our collective sense of shared values.” It then goes on to list a number of other social risk catchphrases like “societal polarisation; involuntary migration; and the displacement and erosion of human rights and /or civic freedoms.” Herein the rub, dear reader: it is hard to imagine that these ‘risks’ would feature on a risk manager’s radar without prompting. There is a sense that reports of this nature are heavily influenced by those commissioning, designing or implementing them, bending the risk landscape to suit their agendas. But we digress.
The fourth issue highlighted in the opening passages of the report is that environmental risks have shifted from long-term concern to urgent reality. “The impacts of environmental risks have worsened in intensity and frequency since this report was launched in 2006,” they write. “Extreme weather events are anticipated to become even more of a concern than they already are, with this risk being top ranked in the 10-year risk list for the second year running.”
There were some interesting insights linked to demographics. For example, younger survey respondents were more concerned about pollution over the next 10 years than older age groups. This risk was also ranked much higher by public sector correspondents than the private sector. The full report dedicates an entire section to pollution, exploring under-appreciated pollutant risks with an aim of raising greater awareness around such risks for future policy agendas.
Technology risks seem understated
The insurers and risk managers in our readerships will be interested in the coverage of technology risks, which the report author’s feel are underrepresented. “In a year that has seen considerable experimentation by companies and individuals in making the best use of artificial intelligence (AI) tools, concerns about adverse outcomes of AI technologies are low in the risk ranking on a two year outlook; however, complacency around the risk of such technologies should be avoided given the fast-paced nature of change in the field of AI and its increasing ubiquity,” they write.
The Global Risk Report 2025 offers a stark assessment of a world defined by deepening divisions and declining global cooperation; an unsettling reality for those tasked with navigating and managing today’s interconnected risks. And ongoing attacks against the Western-led narrative are not helping, making risk mitigation and strategic decision making more difficult. “The decade ahead will be pivotal as leaders will be confronted with increasingly complex global risks,” the report cautions, underlining the need for decisive action.
For brokers and risk managers, the shifting risk landscape demands an agile, globally-informed approach to identifying and addressing emerging threats. Anticipation, collaboration, and consensus stand out as key traits for risk management processionals to succeed in a divided and uncertain world.
Writer’s thoughts:
The WEF Global Risk Report has always offered a useful starting point for risk management discussions. How do you convert the abstract risks that feature in this report into your corporate risk management planning? Please comment below, interact with us on X at @fanews_online or email us your thoughts editor@fanews.co.za.
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