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Climate risk at tipping point

The top five global risks in terms of likelihood and severity of impact are:

1. Extreme weather events with major damage to property, infrastructure and loss of human life.

2. Failure of climate-change mitigation and adaptation by government and business.

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.

4. Major natural disasters such as earthquakes, tsunamis, volcanic eruptions and geomagnetic storms.

5. Human-made environmental damage and disasters, including environmental crime, such as oil spills and radioactive contamination.

That’s according to Global Risks Report 2020 by the Switzerland-based World Economic Forum (WEF), ahead of its meeting from January 21 to 24, in Davos. It describes risks as complex and inter-connected. Climate-related issues have been simmering for at least a decade and now the world is at a tipping point, the WEF warns.

Peter Giger, Group Chief Risk Officer at Zurich Insurance Group, one of the strategic partners behind the report, urges businesses to develop metrics that assess the value of nature to their work. He highlights how the loss of biodiversity – 83pc of wild mammals and one-half the world’s plants – makes it harder for ecosystems to adapt to change. The degradation of wetlands, mangroves and coral reefs translate into insurance costs for local businesses, he says. “Investment in sensible, ecological forestry practices would reduce insurance costs for sectors like power and water utilities that might be exposed to wildfire risks.”

John Drzik, Chairman of Marsh & McLennan, the other strategic partner, puts the onus on the private sector to take the lead. He says that with limited multilateral progress, businesses must act cohesively to mitigate risk, and find opportunity. For the 100-page report in full visit www.weforum.org.

See also https://www.weforum.org/agenda/2020/01/climate-resilience-is-set-to-make-or-break-businesses/.


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