Climate change, cybersecurity risks, and geopolitical instability are viewed as the three emerging risks most likely to have a significant impact in the near future, according to a new report from AXA.
The report, which was based on the results of AXA’s 2019 Emerging Risks Survey, highlighted the “sheer number and complexity of risks on the horizon,” many of which are intensifying at an unprecedented pace.
In particular, environmental risks, technological risks, and political risks dominated responses to the survey, with AXA suggesting that the top concerns this year were “emblematic” of how experts prioritise emerging risks.
“Indeed, other top risks can be clustered around the top three, since they also arise from concerns related to the natural environment, new technologies, and the socio-political landscape,” the report stated.
The consensus around climate change as the foremost risk continued to solidify this year, with cybersecurity risks in second place. These two risks have remained stable at the top of AXA’s survey for four consecutive years.
Geopolitical instability, however, is more of a newcomer, joining the top three for the first time last year and making another large jump in 2019.
“As in recent years, climate change, risks associated with new technologies, and rising geopolitical instability are seen as the most urgent challenges for the future,” said Thomas Buberl, CEO of AXA. “Our report also underlines that all these risks are now interconnected, requiring protection to be considered through a global, interdisciplinary, and multi-stakeholder approach.”
AXA also believes that the perception of major emerging risks is rising and converging across the world, reinforcing the consensus around the main risks confronting societies across the globe.
“Even though the three main risks may not materialize in the same way and to the same extent in their respective regions, surveyed experts across the world recognize them as high-stakes, complex global risks,” the insurer explained.
Notably, economic risks and health risks are less prominent in this years’ survey results, although AXA again suggested that some of these concerns are likely to be embedded in other higher ranked risks, particularly geopolitical instability.
“There is growing concern about the consequences of human actions, from unsustainable growth damaging the environment, to new technologies threatening our private lives and the rise of populist politics challenging our ability to shape an inclusive destiny,” Buberl continued.
“In short, part of what has allowed us to live a better life in the past has turned into challenges for the future,” he added. “This situation entails a profound change in the way risks are approached. It obviously requires new expertise, but above all collective action by public authorities, companies, and citizens.”
AXA produced its latest Future Risks Report in collaboration with Eurasia Group, a political risk research and consulting firm.
Ian Bremmer, President & Founder of Eurasia Group, commented on the findings: “The biggest risks facing the global economy today—from climate to technology and geopolitics—are all deeply interconnected. These are all urgent problems, and they are all hitting at the same time. Smart leaders need to be considering them together and not as a series of independent risks.”
He went on: “Taking a comprehensive approach to all these challenges reveals a complex series of trade-offs at virtually every turn; taken together, they create the most challenging global business risk environment of my lifetime. CEOs around the world still face the same short-term pressures to hit their bottom-line targets, but they now also need to respond to an expanding set of constituents and obligations relating to the environment, technology, ethics, and social responsibility.”
“And all this comes against a global backdrop in which technology makes everything move faster, and where the increasingly volatile geopolitical environment makes taking global action—for companies and for governments—both harder and less effective.”