Climate Change Tops WEF Risk Ranking
For the first time, the World Economic Forum (WEF) has ranked an environmental risk—climate change—as the most severe economic risk facing the world. Global Risks Report 2016 says climate change is compounding and intensifying other social, economic, and humanitarian stresses such as mass migration, which it ranked as the threat most likely to materialize in the next 18 months.
“Climate change is exacerbating more risks than ever before in terms of water crises, food shortages, constrained economic growth, weaker societal cohesion and increased security risks,” said Cecilia Reyes, chief risk officer of Zurich Insurance Groups, one of the report collaborators.
Along with interaction with other risks, Margareta Drzeniek-Hanouz, head of global competitiveness and risks at the WEF, pointed to recent weather events and the frequency of natural disasters as justification for climate change’s top ranking this year. “We do see more severe and more likely weather events,” she said. “There are more droughts and floods. We have a higher and higher assessment of climate change.”
Among the priority actions outlined in the report: modifying financial systems to “unleash climate-resilient, low-carbon investments.” The authors found that incentives for such investments have yet to be incorporated into financial decision making despite increasing recognition of climate-change-related economic risks.
The report is based on a survey of 750 experts from economic, environmental, geopolitical, societal, and tech sectors about the perceived impact and likelihood of 29 prevalent global risks over a 10-year period.
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