Yesterday, the World Economic Forum released a new report: COVID-19 Risks Outlook: A preliminary mapping and its implications, to raise awareness and trigger timely debate as governments and businesses design post-lockdown measures.
The report is informed by the views of nearly 350 senior risk professionals and identifies the main emerging concerns and fallouts. It provides an analysis of the pandemic’s implications and its effects, going beyond the immediate crisis response and providing insights on the current and future global risk landscape.
It’s not specific to financial advice or insurance, but provides a macro view that is a worthy read on the business risks associated with the next 18 months or so.
Key findings include:
- Economic risks are the most likely and concerning fallout, in particular the risk of a prolonged recession of the global economy. That in itself is not surprising, but these risks also have far-reaching environmental, societal and technological implications and interconnections. An increase in indebtedness, both public and private will inevitably push some companies into bankruptcy.
- One of the most important fallouts for the world of dealing with such a global crisis as COVID19 is ignoring other existential global risks. In this case a shortfall of activity to address climate change adaptation and mitigation. As countries emerge from the immediate health crisis and reboot their economies, changed working practices, attitudes towards travelling, commuting and consumption might make it easier to find business opportunities to capitalise on a lower carbon and more sustainable recovery.
- In addition to the dangers to public health, the pandemic and the resulting lockdowns and shutdowns, could have long-lasting effects on people and societies. High structural unemployment is likely to affect consumer confidence, and the speed of economic recovery as well as exacerbate inequality, mental health problems and lack of societal cohesion.
- Although technology has been central to the way people, companies and governments have managed the COVID-19 crisis, it is also challenging the relationship between technology and governance, while mistrust or misuse of technology could have long-lasting effects on society. New business and employment opportunities are being created, but a greater dependence on technology has also increased cybersecurity risks
- For business people there are many decisions that are being taken now and in the coming months that will determine how to respond, as these risks or opportunities emerge and play out. In particular these include;
- To what extent do we manage the operational trade-offs between a quick return to work, but still protect our employees and customers?
- At a time of change for our business, with changing industry structures, changing competitive positions, how do we not only survive, but also find the silver linings?
- How can we accelerate our commitments to sustainability and drive a low-carbon transition?
- How will consumer behaviour change in our sector and how will that affect our propositions and the way we deliver them?