Climate Crisis Dominates WEF's Risks Report
Thu, February 2, 2023

Climate Crisis Dominates WEF's Risks Report

Environmental risks top this year's World Economic Forum (WEF) Risks Report for the first time on record, indicating that the world's elite are worried about the ongoing climate crisis / Photo by: World Economic Forum via Wikimedia Commons


Environmental risks top this year's World Economic Forum (WEF) Risks Report for the first time on record, indicating that the world's elite are worried about the ongoing climate crisis.

Respondents consisting of global experts and decision-makers identified environmental risks as the concerns that will most likely have a major impact on the world over the next 10 years.

As sea levels continue to rise and climate fires burn, WEF president Børge Brende said world leaders need to work with all sectors to address and revive the current systems of cooperation to tackle deep-rooted risks.

"We have only a very small window," Brende said, noting that if the world ignores that window in the next decade, "we will be moving around the deckchairs on the Titanic.”

Biggest Global Risks

The WEF asked over 750 global experts and decision-makers to rank their biggest concerns that will likely happen and will heavily impact the world. A majority of the respondents (78%) believe "economic confrontation" and "domestic political polarization" will rise this year.

This divide will be catastrophic, especially in regards to addressing urgent crises like climate change, biodiversity loss, and the decline of species. Younger respondents (those born after 1980) ranked environmental risks as the most concerning issues that need immediate action, both in the short- and long-term.

The report shows 88.8% of the young respondents believe heatwave will worsen this year along with the destruction of ecosystems (87.9%), the impact of pollution on health (87%), water crises (86%), and uncontrolled fires (79.8%).

In comparison, other generations believe economic confrontations (78.5%) and domestic political divide (78.4%) are the top short-term risks along with cyberattacks on infrastructure (76.1%). These generations, however, also see issues like extreme heat waves (77.1%) and the destruction of natural ecosystems (76.2%) as the risks to worsen in 2020.

Both generations believe environmental risks are the most likely issues that will worsen and have a great impact in the next 10 years, the WEF said in a statement. It added that over the next decade, the top five risks by likelihood are: extreme weather events; failure of climate change mitigation and adaptation; major natural disasters; major biodiversity loss and ecosystem collapse; and human-made environmental damage and disasters.

By the severity of the impact, the top five risks are failure of climate change mitigation and adaptation; weapons of mass destruction; major biodiversity loss and ecosystem collapse; extreme weather events; and water crises.

The report shows the need for policymakers to come up with science-based targets and actions that will not only boost economies and help companies avoid the risks of disastrous future losses, but also protect the Earth.

Stepping Up

According to the WEF, failure to adapt to "today's epochal power-shift" and geopolitical turbulence, while also planning for the future, may lead to the failure of addressing some of the most urgent economic, environmental, and technological concerns.

"There is mounting pressure on companies from investors, regulators, customers, and employees to demonstrate their resilience to rising climate volatility," said John Drzik, the chairman of Marsh & McLennan insights, which helped to compile the report.

"Scientific advances mean that climate risks can now be modeled with greater accuracy and incorporated into risk management and business plans."

Drzik added that recent events like the bushfires in Australia and California are adding to the current pressure on firms to address climate risk while they also take acton on geopolitical and cyber risk challenges.

Zurich Insurance Group Chief Risk Officer Peter Giger also emphasized the need for faster adaption to avoid the worst and irreversible effects of climate change and put more effort into biodiversity protection.

Not only do diverse ecosystems capture and store large amounts of carbon, but they also provide great economic benefits at an estimated $33 trillion per year—the same amount of the combined GDP of the US and China.

"It’s critical that companies and policy-makers move faster to transition to a low carbon economy and more sustainable business models. We are already seeing companies destroyed by failing to align their strategies to shifts in policy and customer preferences."

"Transitionary risks are real, and everyone must play their part to mitigate them. It’s not just an economic imperative, it is simply the right thing to do."

A Difficult Dance

The WEF Global Risks Report comes ahead of the group's annual meetings in Davos, Switzerland next week. Business and political leaders will be flying to Davos for the conference, ironically, aboard private jets and luxury cars.

With the seemingly emerging gap between the WEF's call to address climate change and the reality of world and business leaders gathering via private flights to Davos, the group is under pressure to up its efforts to reduce the meetings' impact on the environment.

These efforts include the WEF's promise to buy carbon credits to offset flights, redesigning the conference center, a menu filled with locally-sourced food, and shuttles that are 88% electric or hybrid to carry many of the attendees around the venue, CNN reports.

It adds that the carbon credits purchased this year will fund projects aiming to address the deforestation in the Amazon and convert methane from cow dung into energy. Last year, the group reportedly had offset 35,000 emissions that helped fund efficient cooking stoves in China, Mali, India, and South Africa and also restored peatlands in Davos.

However, offset programs have drawbacks such as having to maintain them over time and waiting for a long time for the effects to kick in, according to Lucy Gilliam, an aviation and shipping specialist at Transport & Environment.

"You're not actually removing the emissions that have been created by that plane," she told CNN. "The plane will have burned that fuel, and the carbon has been released into the atmosphere."

It goes against the WEF's efforts for a sustainable conference, especially with the sheer number of flights needed to fly 3,000 delegates from around the world to the venue—as well as the delegates' entourage, conference staffers, security personnel, and the global media.

This reality further supports the flight shaming movement in Europe, which airline company LunaJets is responding to by encouraging private jet-riding clients to opt for more fuel-efficient planes.