While this year’s Global Risks Report, appropriately, finds environmental risks predominating in 2020, the links to economic and financial risks are notably absent from the report. Rather than make the connections between the scale of environmental threats facing us and the political, economic and legal transformations that are needed to address them, the report side-steps such challenges to the political-economic status quo.
As a priority, these risks need to be clearly linked to the political-economic changes that are needed to avert them. Without this, the Global Risks Report goes the way of so much existing analysis – synthesis of trends and sentiments cut adrift from clear action.
The World Economic Forum’s Global Risks Report, launched today in the run up to its 50th Annual Meeting in Davos, is dominated for the first time ever by the likelihood of environmental risks. Extreme weather, climate action failure, natural disasters, biodiversity loss, and human made environmental disasters topped the list in terms of most likely risks for 2020.
The Global Risks Report, as implied by its name, does not make for encouraging reading. Of some 750 global experts and decision-makers, 70% believe that “extreme heat waves”, “destruction of ecosystems” and “health impacted by pollution” will be on the rise in 2020.
Likelihood vs Impacts
Members of the Global Shapers Community—the Forum’s younger constituents—show even more concern, ranking environmental issues as the top risks in both the short and long terms.
For the Global Shapers, almost 90% believe that these environmental risks will be aggravated this year. However, the report looks beyond likelihood to explore the expected potential impact of these risks. They place biodiversity loss as the most impactful risk of 2020, which may be a prescient view.
In the Executive Summary, the report accurately assesses that Biodiversity loss has critical implications for humanity, from the collapse of food and health systems to the disruption of entire supply chains, all factors of functional biodiversity loss. It also highlights the impacts of genetic biodiversity loss through the acceleration of extinction rates, as an important part of the risk of biodiversity loss. The report goes on to highlight the five drivers of biodiversity loss – land use change, exploitation, pollution, invasive species and climate change – and extrapolates to the indirect causes as population growth, trade, consumption patterns and urbanization.
Risks vs solutions
The chapter on biodiversity loss identifies five implications of global biodiversity loss for humanity: food insecurity, health risks, exacerbation of climate change, business risk, and indigenos community livelihood. It goes on to explore three likely scenarios and their consequences – insect decline, coral reef collapse, and disappearance of the Amazon. Grim reading for sure.
One of the commentaries on this year’s Global Risks Report highlights that the survey responses largely skip over the economic and financial risks, which don’t even make the top 10. The suggestions from the report, unfortunately, are largely in the form of precautions for companies and countries to limit their exposure. This is a missed opportunity, as it is exactly the restructuring of our political-economic and systems that is required to deliver more than an ineffective patch over deeper systems drivers.
After highlighting the shortcomings of the Aichi Biodiversity Targets, the report goes on to highlight the “critical moment” as leaders gather in Kunming, China later this year to revisit targets that have not been met. In the same paragraph, the report accurately but fleetingly highlights two of the greatest opportunities to address biodiversity loss.
It states that, “Messaging around biodiversity loss and its impacts is key to underscoring the meaning and impact of biodiversity loss for societies.” This could not be more true, and the current narrative of nature loss (and climate change) is disempowering and paralysing. Sadly, the narrative of this report misses the opportunity to deliver a message of agency, instead conveying another litany of doom and gloom.
It goes on to mention that, “Consumers also have a role to play in demanding sustainable policymaking and products.” Activating citizens to take action and hold their leaders responsible is probably the key to driving the political-economic rule change that is required. This civic mobilisation must be led by new narratives and renewed ownership by the world’s citizens of the natural systems that belong to everyone. Only then will the required political-economic rule change be possible.
Ultimately, the Global Risks Report is more evidence that the risks so clearly brought into focus in this report will be addressed only through profound political-economic rule changes. In a recent interview with the Financial Times, founder of the World Economic Forum Klaus Schwab mused that “My dream for Davos is to get the big investors and hedge funds…to finance only investments which are environmentally not damaging.”
A finance industry that allows no net harm to nature through its investments is perhaps a more strategic – and more fundamental – solution than he knows. It is also the type of solution that can make significant progress towards addressing the top risks highlighted in the Global Risks Report, and hopefully a tangible change on which the World Economic Forum and others can start making urgent headway.
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