{"id":3820,"date":"2020-01-16T08:57:51","date_gmt":"2020-01-16T07:57:51","guid":{"rendered":"https:\/\/www.sonnenseite.com\/economy\/top-risks-are-environmental-but-ignore-economics-and-theyll-be-harder-to-fix.html"},"modified":"2020-01-16T08:57:51","modified_gmt":"2020-01-16T07:57:51","slug":"top-risks-are-environmental-but-ignore-economics-and-theyll-be-harder-to-fix","status":"publish","type":"post","link":"https:\/\/www.sonnenseite.com\/en\/economy\/top-risks-are-environmental-but-ignore-economics-and-theyll-be-harder-to-fix\/","title":{"rendered":"Top risks are environmental, but ignore economics and they&#8217;ll be harder to fix"},"content":{"rendered":"<p>Climate-related risks overshadow all other risks &ndash; in particular economic risks &ndash; undermining cohesive action and creating blind spots &#8211; Society needs a new &ldquo;growth paradigm&rdquo; that addresses the interconnectedness of socio-economic factors with climate change &#8211; Businesses need to adapt their metrics to assess the value of nature.<\/p>\n<p> <!--more--> <\/p>\n<div class=\"st__content-block st__content-block--searchable-list st__content-block--searchable-list-default list-group\">\n<div>This year&rsquo;s risks landscape is green. The urgency of climate  change dominates everything: all five of the top risks by likelihood and  three by impact are climate related. The backdrop of geopolitical and  geo-economic tensions in 2019 sparked unease as the world grappled with  &ldquo;challenges&rdquo; such as environmental degradation and technological  disruption. Fast forward to 2020, and there is a climate emergency.<\/div>\n<\/p><\/div>\n<div class=\"st__content-block st__content-block--text\">\n<p>Economic risks are absent from the top five. This is worrying,  given the continuing global economic malaise that will limit progress in  all other areas, including climate action. As lead author, Emilio  Granados Franco, Head of Global Risks and Geopolitical Agenda at the  World Economic Forum, <a href=\"https:\/\/www.weforum.org\/discom?bobulate=cCNHn3lkgomX6vuaBDWzS6V94UPt9j9bYN%2Brirnyq0PG0q%2BKYgudds88klh6%0AxRnQDAJlsdJnHDUGSWPYVzeA0A%3D%3D%0A\">suggests<\/a>,  perhaps it is this year&rsquo;s blind spot, &ldquo;Because environmental and  economic risks are inextricably linked, risk perceptions that account  for only one over the other mean blind spots may be arising and  integrated mitigation efforts may be lacking.&rdquo;<\/p>\n<\/p><\/div>\n<div class=\"st__content-block st__content-block--text\">\n<p><strong>The top five global risks in terms of likelihood <em>and<\/em> severity of impact are:<\/strong><\/p>\n<\/p><\/div>\n<div class=\"st__content-block st__content-block--text\">\n<ul>\n<li>1. Extreme weather events with major damage to property, infrastructure and loss of human life.<\/li>\n<li>2. Failure of climate-change mitigation and adaptation by government and business.<\/li>\n<li>3. Major biodiversity loss and ecosystem collapse (terrestrial or  marine) with irreversible consequences for the environment, resulting  in severely depleted resources for humankind as well as industries.<\/li>\n<li>4. Major natural disasters such as earthquakes, tsunamis, volcanic eruptions and geomagnetic storms.<\/li>\n<li>5. Human-made environmental damage and disasters, including  environmental crime, such as oil spills and radioactive contamination. <\/li>\n<\/ul><\/div>\n<div class=\"st__content-block st__content-block--text\">\n<p><strong>Traps and blind spots<\/strong><\/p>\n<\/p><\/div>\n<div class=\"st__content-block st__content-block--text\">\n<p>To younger generations especially, the health of the planet is  alarming. The report highlights how risks are perceived differently by  those born after 1980. They ranked environmental risks higher than other  respondents in the short and long terms. Almost 90% of these  respondents believe &ldquo;extreme heat waves&rdquo;, &ldquo;destruction of ecosystems&rdquo;  and &ldquo;health impacted by pollution&rdquo; will be aggravated in 2020, compared  to around 70% for other generations. They also believe that the impact  from environmental risks by 2030 will be more catastrophic and more  likely. <\/p>\n<\/p><\/div>\n<div class=\"st__content-block st__content-block--text\">\n<p>Cyberattacks on critical infrastructure come fifth. Digital  fragmentation more broadly is probably one to watch in the coming years  as society grapples with the forces of privacy, ethics, profit and  security.<\/p>\n<\/p><\/div>\n<div class=\"st__content-block st__content-block--text\">\n<p>As the 15-year history of the Global Risks Report shows, risks  are complex and interconnected. Lose sight of the bigger picture and the  headlines can be misleading. <\/p>\n<\/p><\/div>\n<div class=\"st__content-block st__content-block--text\">\n<p>Looking back to the beginning of the last decade, the 2010 report  warned, &ldquo;while sudden shocks can have a huge impact &hellip; the biggest risks  facing the world today may be from slow failures or creeping risks.  Because these failures and risks emerge over a long period of time,  their potentially enormous impact and long-term implications can be  vastly underestimated.&rdquo;<\/p>\n<\/p><\/div>\n<div class=\"st__content-block st__content-block--text\">\n<p>Climate was cited as one of these slow burners. It was a prescient warning that went unheeded. <\/p>\n<\/p><\/div>\n<div class=\"st__content-block st__content-block--text\">\n<p>Peter Giger, Group Chief Risk Officer, Zurich Insurance Group,  now urges businesses to develop metrics that assess the value of nature  to their work. He highlights how the staggering loss of biodiversity &ndash;  83% of wild mammals and one-half the world&rsquo;s plants &ndash; makes it harder  for ecosystems to adapt to change. The degradation of wetlands,  mangroves and coral reefs translate into insurance costs for local  businesses. &ldquo;Investment in sensible, ecological forestry practices would  reduce insurance costs for sectors like power and water utilities that  might be exposed to wildfire risks.&rdquo;<\/p>\n<\/p><\/div>\n<div class=\"st__content-block st__content-block--text\">\n<p>Sandrine Dixson-Decl&egrave;ve, Co-President of the Club of Rome,  stresses that our &ldquo;patterns of economic growth, development, production  and consumption&rdquo; have not only tipped ecosystems, but &ldquo;created severe  socio-economic hotspots and greater inequality&rdquo;. She says: &ldquo;The  emergency is not just about ecological breakdown. It is about societal  breakdown and acknowledging that as we urgently address the climate and  biodiversity risks, we must simultaneously build new economic, social  and financial systems&rdquo;. <\/p>\n<\/p><\/div>\n<div class=\"st__content-block st__content-block--text\">\n<p><strong>Who&rsquo;s in charge?<\/strong><\/p>\n<\/p><\/div>\n<div class=\"st__content-block st__content-block--text\">\n<p>This year economic and political polarization is on the rise, at a  time when there is more need than ever to unify the response and  despite warnings in 2010 of gaps in global governance and inadequate  investment in infrastructure. Of some 750 global experts and  decision-makers, 78% think &ldquo;economic confrontations&rdquo; and &ldquo;domestic  political polarization&rdquo; are likely to rise and will have severe impact  in 2020<a><\/a>.<\/p>\n<\/p><\/div>\n<div class=\"st__content-block st__content-block--text\">\n<p>John Drzik, Chairman of Marsh &amp; McLennan, puts the onus on  the private sector to take the lead. He highlights that with limited  multilateral progress, businesses must act cohesively to mitigate risk  and find opportunity. He sets out clear guidance on how to become more  strategically resilient in the face of climate threats to business  operations and explains how to find new and expanded market  opportunities.<\/p>\n<\/p><\/div>\n<div class=\"st__content-block st__content-block--text\">\n<p><strong>Risk is a risk in itself<\/strong><\/p>\n<\/p><\/div>\n<div class=\"st__content-block st__content-block--text\">\n<p>Risk analysis should not be seen in an ahistorical context. The  evaluation of risk first gained momentum in the 18th century with a  flurry of intellectual activity on the mathematical theory of  probability &ndash; which can in part be linked to the rise of capitalism &ndash; or  the desire of the growing private sector for improved methods of  business calculation and economic security. Modern-day risk analysis  shapes decisions, sets forecasts and reveals opportunities. It&rsquo;s why the  World Economic Forum sets the agenda for the year with the launch of  the Global Risks Report every January.<\/p>\n<\/p><\/div>\n<div class=\"st__content-block st__content-block--text\">\n<p>By definition, however, risks have uncertain outcomes. The human  system of risk analysis emphasizes instinct over intellect and emotion  over reason. Perception is necessarily subjective,which is a risk in  itself. There is an imperative, therefore, to heed what is unsaid, avoid  reductionism and watch out for the silent, but potentially deadly risks  that are masked by the more obvious ones. Climate-related issues have  been simmering for at least a decade and now the world is at a tipping  point. This year&rsquo;s hidden risks &ndash; like the economy &ndash; are unwisely  ignored. <\/p>\n<\/p><\/div>\n<div class=\"st__content-block st__content-block--text\">\n<p>The question is how to use the now highly sophisticated risk  awareness to read between the lines, to understand the  interconnectedness of risks and to use a systems-change approach to  propel change. So the 50th Annual Meeting in Davos approaches, the  relevance of cohesive action is ever-more compelling as all stakeholders  gather to focus on shared, critical global tasks.&nbsp;<\/p>\n<\/p><\/div>\n<ul>\n<li><a href=\"https:\/\/www.weforum.org\/reports\/the-global-risks-report-2020\">The Global Risks Report 2020<\/a><\/li>\n<li><a href=\"http:\/\/www3.weforum.org\/docs\/WEF_Global_Risk_Report_2020.pdf\">The Global Risks Report 2020 (pd)<\/a><\/li>\n<\/ul>\n<div class=\"article-images\"><img loading=\"lazy\" decoding=\"async\" width=\"400\" height=\"571\" src=\"https:\/\/www.sonnenseite.com\/wp-content\/uploads\/2020\/01\/WorldEconomicForum_GlobalRisksReport2020.jpg\" class=\"alignleft\" alt=\"weforum.org\" srcset=\"https:\/\/www.sonnenseite.com\/wp-content\/uploads\/2020\/01\/WorldEconomicForum_GlobalRisksReport2020.jpg 400w, https:\/\/www.sonnenseite.com\/wp-content\/uploads\/2020\/01\/WorldEconomicForum_GlobalRisksReport2020-210x300.jpg 210w\" sizes=\"auto, (max-width: 400px) 100vw, 400px\" \/><\/div>\n<h5 class=\"green\">Source<\/h5>\n<p><a href=\"https:\/\/www.weforum.org\/agenda\/2020\/01\/what-s-missing-from-the-2020-global-risks-report\/\" target=\"_blank\" rel=\"noopener noreferrer\">The World Economic Forum 2020<\/a><\/p>\n<div class=\"shariff shariff-align-flex-start shariff-widget-align-flex-start\"><div class=\"ShariffHeadline\">Diese Meldung teilen<\/div><ul class=\"shariff-buttons theme-round orientation-horizontal buttonsize-medium\"><li class=\"shariff-button facebook shariff-nocustomcolor\" style=\"background-color:#4273c8;border-radius:1%\"><a href=\"https:\/\/www.facebook.com\/sharer\/sharer.php?u=https%3A%2F%2Fwww.sonnenseite.com%2Fen%2Feconomy%2Ftop-risks-are-environmental-but-ignore-economics-and-theyll-be-harder-to-fix%2F\" title=\"Bei Facebook teilen\" aria-label=\"Bei Facebook teilen\" role=\"button\" rel=\"nofollow\" class=\"shariff-link\" style=\";border-radius:1%; 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