The report identifies climate action failure as the most impactful risk and the second most likely long-term risk.
The most imminent threats include employment and livelihood crises, youth disillusionment, digital inequality, economic stagnation, human-made environmental damage, erosion of societal cohesion, and terrorist attacks.
The World Economic Forum’s (WEF) Global Risks Report 2021 placed environmental degradation as the top long-term risk for the second year in a row. The report identifies climate action failure as the most impactful risk and the second most likely long-term risk.
The report derives from the results of an annual ‘Global Risks Perception Survey’ that is completed by over 650 members of the WEF’s diverse leadership communities. Respondents are asked to assess (1) the likelihood of a global risk occurring over the course of the next decade, and (2) the severity of its impact at a global level if it were to occur.
The 16th edition of the report titled, ‘The Global Risks Report 2021,’ analyzes the risks from societal fractures and widening inequalities. The report features special sections on the COVID-19 pandemic, barriers to digital inclusivity, lost opportunities for youth, middle powers and global divides, and markets and industries.
The report identifies the ten highest likelihood risks of the next decade as extreme weather, climate action failure, human-led environmental damage, infectious diseases, biodiversity loss, digital power concentration, digital inequality, interstate relations failure, cybersecurity failure, and livelihood crises. The highest impact risks of the next ten years include infectious diseases, climate action failure, weapons of mass destruction, biodiversity loss, natural resource crises, human environmental damage, livelihood crises, extreme weather, debt crises, and information technology (IT) infrastructure breakdown.
The most imminent threats (those most likely to occur in the next two years) include employment and livelihood crises, youth disillusionment, digital inequality, economic stagnation, human-made environmental damage, erosion of societal cohesion, and terrorist attacks. The report classifies climate change as a “catastrophic risk,” and stresses that a shift to a green economy cannot be delayed until the shocks of the pandemic recede.
On COVID-19, the report reflects that the 2006 Global Risks Report first “sounded the alarm on pandemics” and other health-related risks. The 2006 report warned that a “lethal flu” would impact travel, tourism, and other service industries, and pose long-term harm to investor risk appetites, global trade, and consumption demand. In 2020, COVID-19 resulted in “severe” human and economic costs, threatening to scale back progress on reducing poverty and inequality and to further weaken global cooperation and social cohesion. An uneven recovery from the pandemic could further exacerbate inequality, the report cautions. It further states that the ramifications of job losses, abrupt shifts in markets, a widening digital divide, and disrupted social interactions will shape the effectiveness of responses to future threats, including climate change, cyberattacks, and weapons of mass destruction.
The report examines lost opportunities for youth, many of whom are entering the workforce “in an employment ice age.” This generation of youth, the report warns, faces serious challenges related to their economic prospects, education, and mental health. If the current generation continues to lack pathways to future opportunities, there is a risk of youth disillusionment, it states. The report cautions that societal gains “could be obliterated” if the current generation lacks adequate pathways to education and employment opportunities.
The report credits middle powers – “states that lack superpower status but still play influential roles in international relations” – with often being the “champions” of multilateral cooperation in the areas of trade, diplomacy, security, and global health. “Uniquely positioned” to devise alternative pathways on trade, security, and technology, middle powers such as the EU or India could offer “a counterbalance in the evolving geopolitical order” in manufacturing and trade. However, the report finds, middle powers “will struggle to stand apart in digital and defense realms.”
Since the global pandemic became a reality, the report suggests the world has become more attuned to risk, which offers an opportunity to leverage this attention and identify more effective ways to communicate risk to decision makers. The report analyzes four areas of the COVID-19 response: institutional authority; risks financing; information collection and sharing; and equipment and vaccines. The report then considers national-level responses, and draws lessons for strengthening resilience and response through government decision making, health system capabilities, public communication, lockdown management, and financial assistance to the vulnerable. [Publication: The Global Risks Report 2021] [Report Landing Page] [WEF Story on Greatest Threats] [SDG Knowledge Hub Story on Global Risks Report 2020]