WEF Global Risks Report 2023

January 12, 2023

The World Economic Forum’s annual Global Risks Report has highlighted the cost of living crisis as the biggest short-term risk facing the world right now, with climate change as the biggest long-term threat. The report, which is published ahead of the Davos summit, factors the views of 1,200 figures across the private and public sectors. This year’s edition was produced with professional services firm Marsh McLennan and Zurich Insurance Group.

Cost of Living Crisis

The report states that Russia’s war in Ukraine and the Covid-19 pandemic have propelled the energy crisis, food scarcity, and inflation as the most pressing global issues. The impact of the cost of living crisis on vulnerable populations is “very difficult to accept,” according to Carolina Klint, Risk Management Leader for Continental Europe at Marsh. Governments are now working towards mitigating the impact of the cost of living crisis while also trying to protect from spiralling inflation and servicing historically high debt loads.

Climate Change

The report states that the world must collaborate more effectively on climate mitigation and adaptation over the next decade to avoid “ecological breakdown” and continued global warming. Governments will face “trade-offs” in the coming years, as societal challenges, the environment, and security risks compete for their attention. The most-cited long-term risks included climate change, extreme weather, biodiversity loss, and human-made environmental damage.

Other Risks

The most-cited two-year term risks included natural disasters, geo-economic confrontation, the erosion of social cohesion, widespread cybercrime, large-scale involuntary migration, and natural resource crises, alongside climate change. Cybercrime and migration also featured as long-term risks, though climate-related issues took the top four spots. The cost of living was absent from the list.

The WEF Global Risks Report 2023 highlights the cost of living crisis and climate change as the top short and long-term risks facing the world. The report states that governments will face “trade-offs” in the coming years as they try to navigate societal challenges, the environment, and security risks. The report stresses the need for more effective collaboration on climate mitigation and adaptation over the next decade to avoid “ecological breakdown” and continued global warming.

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