Every year the World Economic Forum releases its Global Risk Report with the aim of addressing the key current and emerging risks and advancing thinking about their mitigation. It’s no suprise that financial risks top this year’s list. The potential for further deterioration of asset prices and fiscal positions could be exacerbated by a potential slowdown in the Chinese economy and gaps in global governance that could allow a problem to reach critical mass before it is addressed. Meanwhile, natural resource concerns, particularly about water scarcity, loom as does the possibility of increased levels of chronic disease around the world. In all, 36 risks are mentioned in the report and very few are seen to be decreasing in terms of possible severity and liability. It’s enough to give you nightmares.
As with any report of this kind, there is a temptation to dismiss the findings as far-fetched and unlikely — the kind of thing best left to the Chicken Littles of the world who want to live in fear that the sky is falling. But what if the sky does fall? What do you do then? As John Merkovsky, managing director of Marsh Risk Consulting, said during Marsh’s analysis of the report this morning, “It doesn’t matter if you’re out of business for reason A, B, C or D. You’re still out of business.”
Risk is increasingly interconnected and any risk manger can visualize a scenario where a global concern can quickly become a personal concern. Now is not the time for what the World Economic Forum calls “risk myopia.” The impacts are too great. After all, if the extremes on the bell curve can kill you, it would be crazy not to pay attention.
Below is a video from a World Economic Forum panel discussion on the survey’s results from January.