Global risks

Interconnected to global trends

The World Economic Forum (WEF) recently published its 11th edition of The Global Risks Report. The annual publication defines, prioritises and describes global risks affecting societies and business per year. It also shows the interconnections between various categories of risks and major global trends. At The Natural Step, we use these data to strongly underline the challenge and the indispensability of a systems perspective and approach.

Classification of global risks

In 2016, the WEF identified a total of 29 global risks. The content and nature of the set of risks change over time. The current global risks are grouped into five different categories: environmental, societal, economic, geopolitical and technological.

Environmental risks

  • Extreme weather events, e.g. floods, storms, etc.
  • Failure of climate-change mitigation and adaptation
  • Major biodiversity loss and ecosystem collapse, in regard to land or ocean
  • Major natural catastrophes, e.g. earthquakes, tsunamis, volcanic eruptions or geomagnetic storms
  • Man-made environmental catastrophes, e.g. oil spills, radioactive contamination etc.

Societal risks

  • Failure of urban planning
  • Food crisis
  • Large-scale involuntary migration
  • Profound social instability
  • Rapid and massive spread of infectious diseases
  • Water crises

Economic risks

  • Asset bubble in a major economy
  • Deflation in a major economy
  • Failure of a major financial mechanism or institution
  • Failure/shortfall of critical infrastructure
  • Fiscal crises in key economies
  • High structural unemployment or underemployment
  • Illicit trade, e.g. illicit financial flow, tax evasion, human trafficking, organised crime, etc.
  • Severe energy price shocks, upward or downward
  • Unmanageable inflation

Geopolitical risks

  • Failure of national governance, e.g. failure of rule of law, corruption, political deadlock, etc.
  • Interstate conflict with regional consequences
  • Large-scale terrorist attacks
  • State collapse or crisis, e.g. civil conflict, military coup, failed states, etc.
  • Weapons of mass destruction

Technological risks

  • Adverse consequences of technological advances
  • Breakdown of critical information infrastructure and networks
  • Large-scale cyber-attacks
  • Massive incidence of data fraud/theft

Global risks from a regional perspective

In Germany, large-scale involuntary migration is currently perceived as the most likely global risk, followed by unemployment or underemployment, and the risk of a fiscal crisis.

Source: The Global Risks Reports 2016, World Economic Forum

Global risks from climate change to large-scale involuntary migration are becoming increasingly imminent, sometimes in new and unexpected ways. If we want to preserve and save the planet, we need to move beyond risk mitigation to build resilience.

Global risks outlook

The Top Five Global Risks of Highest Concern

For the next 18 months
  • Large-scale involuntary migration 52%
  • State collapse or crises 27.9%
  • Interstate conflict 26.3%
  • Unemployment or underemployment 26%
  • Failure of national governance 25.2%
For the next 10 years
  • Water crises 39.8%
  • Failure of climate-change mitigation and adaption 36.7%
  • Extreme weather events 26.5%
  • Food crises 25.2%
  • Profound social instability 23.3%
Global risks from climate change to large-scale involuntary migration are becoming increasingly imminent, sometimes in new and unexpected ways. If we want to preserve and save the planet, we need to move beyond risk mitigation to build resilience.