More than 750 global experts and decision-makers were asked to rank their biggest concerns in terms of likelihood and impact for the annual global risks survey.
The top five long-term risks in terms of likelihood in 2020 were all environmental:
- Extreme weather
- Climate action failure
- Natural disasters
- Biodiversity loss
- Human-made environmental disasters
The top five risks in terms of impact were:
- Climate action failure
- Weapons of mass destruction
- Biodiversity loss
- Extreme weather
- Water crises
Younger respondents were even more concerned about the environment, ranking environmental issues as the top risks for both likelihood and impact. Climate change and biodiversity loss were key themes throughout the report, and a chapter was devoted to each. Below is a summary of the key points.
Climate
According to the report, 2020 is a critical year for climate change. The report says:
“Climate change is striking harder and more rapidly than many expected. The last five years are on track to be the warmest on record, natural disasters are becoming more intense and more frequent, and last year witnessed unprecedented extreme weather throughout the world. Alarmingly, global temperatures are on track to increase by at least 3°C towards the end of the century — twice what climate experts have warned is the limit to avoid the most severe economic, social and environmental consequences. The near-term impacts of climate change add up to a planetary emergency that will include loss of life, social and geopolitical tensions and negative economic impacts.”
The risks of climate change are well known and include loss of life; stress on ecosystems; food and water crises; increased migration; economic impacts; exacerbation of geopolitical tensions; capital market risks; and trade, labour and supply chain disruption.
According to the report, the next 10 years will shape the outlook for climate risk for the rest of the century.
Alongside the risks, the next decade brings tremendous opportunity, since technological breakthroughs are happening all the time. Yet, governments need to urgently prioritise adaptation to climate change.
Biodiversity loss
Biodiversity is declining faster than at any other time in human history. The current rate of extinction is tens to hundreds of times higher than the average over the past 10 million years, and is accelerating.
The dramatic loss of biodiversity brings serious risks for societies, economies and the health of the planet.
Biodiversity loss has come to threaten the foundations of our economy. One attempt to put a monetary value on goods and services provided by ecosystems estimates the worth of biodiversity at US$33 trillion per year. That’s close to the GDP of the United States and China combined.
Risks arising from biodiversity loss include food insecurity; health risks; exacerbation of climate change; business risk; and indigenous community livelihood and culture risks.
While trade-offs may be unavoidable, there are also potential ‘win-wins’. An example is the circular economy. Besides helping decouple resource demand from economic growth, this can contribute to lower emissions and less habitat loss.
Another opportunity is through diet. Livestock are responsible for about 14% of global greenhouse gas emissions, so reducing meat consumption would be good for nature and the climate. In a growing number of countries it would be good for people as well.
The most effective solutions may mean significant disruption or shifts to existing business models. In just one example, the fashion industry could reduce its impacts on biodiversity by shifting towards transforming old clothes into new ones and creating garments that are durable rather than disposable – an opportunity worth US$560 billion.