The 15th Global Risk Report released in January 2020 by World Economic Forum shows some of the top risks that would impact the world in 2020 and ahead. The report highlights the top risks that organizations might face in 2020. It also throws a light on key issues like the environment, global economy, healthcare, technological advancements and threats related to cyber security.
The survey depicts how the top risks are inter-related. E.g. climate change is the reason for collapsing ecosystem, extinction of many species and a loss of biodiversity. From a broader perspective, we can divide these top-rated risks as follows:
- Global Economic Stability – Global trade has been one of the biggest factors of growth. However, some of the world’s biggest economies are facing a slowdown due to various factors. Debts are higher and growth is slower. Moreover, as the world’s two largest economies America & Russia have come face to face due to their trade policies, it has worsened the slowdown. So, this will also affect the organizational growth. The board member should have policies in place to mitigate such risks, and to reduce the effects of such slowdown on their organization.
- Climate Change and Environmental Issues – Climate change and global warming, are one of the top-rate risks and have affected our environment adversely. Apart from rising global temperature; melting of polar ice, severe carbon emissions and loss of habitat for wildlife are also now major concerns due to the global warming. A further delay in adapting greener practices by organizations to reduce their carbon footprint and control emissions will only worsen the environmental impact. Hence, with stringent rules & regulations in place, it is possible to control and reduce the environmental impact.
- Biodiversity Loss and ecosystem collapse – Loss of biodiversity is directly associated with climate change. Every living organism on Earth plays an important role in maintaining the nature’s balance. And, humans are destroying this balance by excessive deforestation for industrial and agricultural expansion. Due to this, we are losing our biodiversity at the fastest rate ever recorded in history. This has also resulted in extinction of thousands of species. The ultimate results will be food insecurity and adverse effects on the human health. This again emphasizes on the need of implementation of greener practices and reduction in emissions and carbon footprints of the organizations.
- Cybersecurity – Experts also worry about digital data privacy and security. With technological innovations, cybercrimes are also increasing. Governments across the globe are worried about their nation’s digital security. With technological advances, digital dependency and economic risks are also increasing as we move towards a digital era. This needs to be dealt with by the board members in the form of having better cybersecurity laws for their organization.
The board and the organization as a whole should review various kinds of risks associated with the environment. They should also have damage control policies in place in case if such threats arise, and before they inflict a long-lasting damage. The risks stated above are real and humans are its main cause. Directors need to understand this and should take initiatives to conserve nature and stop global warming by creating agile governance through greener organizations.