Climate change is the biggest global risk

O 15th Global Report of Risks of the World Economic Forum points out that all “major long-term risks, relative to probability” are related to environmental problems. Before, economic and financial crises were the main concerns, now risk perceptions are associated with climate change and its consequences, such as loss of biodiversity and environmental disasters.

“Climate change is a very real and serious threat to society. Extreme weather events such as heat waves and floods are becoming more common and severe. Leaving communities with often devastating humanitarian and economic costs,” says Alison Martin, member of financial services group Zurich Insurance Group, who worked on compiling the publication.

Top 5 risks, by likelihood, over the next 10 years:

  1. Extreme weather events;
  2. Failure to mitigate and adapt to climate change;
  3. Major natural disasters;
  4. Major loss of biodiversity and ecosystem collapse;
  5. Man-made environmental damage and disasters.

Top 5 risks, by severity of impact, over the next 10 years:

  1. Failure to mitigate and adapt to climate change;
  2. Weapons of mass destruction;
  3. Major loss of biodiversity and ecosystem collapse;
  4. Extreme weather events;
  5. Water crises.

“There is increasing pressure on companies from investors, regulators, customers and employees to demonstrate their resilience to increasing climate volatility. Scientific advances mean that climate risks can now be modeled more accurately and incorporated into risk management and business plans,” says John Drzik, president of Marsh & McLennan Insights.

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