It’s the last day of the World Economic Forum Annual Meeting in Davos, Switzerland. Some of us would really like to be there for the skiing. But seriously and professionally, the meeting and related Global Risks Report have relevance for all of us attempting to create a more secure and resilient world through our work in Third-Party Risk Management.
About the WEF 2024 Global Risks Report
Last week, just before the Annual Meeting, the WEF released the 2024 Global Risks Report which identifies the biggest global challenges world leaders will be discussing at the meeting.
Summarizing the collective worries of 1,400 global risk experts, policymakers, and industry leaders, the Risks Report attempts to answer “What are the biggest challenges facing us as people, companies, and countries?”
The full WEF 2024 Global Risks Report consists of 124 pages of detailed text and crisp infographics that will keep you up at night – first with the reading itself, and later, with the anxiety of looming catastrophes.
The 2024 Risk Landscape
The WEF 2024 Global Risks Report summarizes the risk landscape in a few gloomy sentences:
“Underlying geopolitical tensions combined with the eruption of active hostilities in multiple regions is contributing to an unstable global order characterized by polarizing narratives, eroding trust and insecurity…Despondent headlines are borderless…and a sense of frustration at the status quo is increasingly palpable. Together, this leaves ample room for accelerating risks – like misinformation and disinformation – to propagate in societies that have already been politically and economically weakened in recent years.”
Quick Glance Resources
If you are not up for the Big Read, we have a few resources to suggest for gathering the essential ideas of the WEF 2024 Global Risks Report:
Podcast: On the go? Listen and learn about the “big issues facing leaders at Davos 2024” from this podcast from the WEF.
Article: This article from the WEF summarizes the report and provides two quick-glance lists along with a stunning map. List 1 in the article shows the Top 10 Risks in the Long Run (over the next 10 years): environmental concerns fill the top half of the lineup. List 2 in the article shows the Top 10 Risks in the Short Term (over the next 2 years): technology risks are top concerns along with geopolitical and societal risks.
Risk Interconnections Map: If you do nothing else, look at the Risk Interconnections Map. You will quickly notice the large nodes; Economic Downturn, Societal Polarization, and Involuntary Migration dominate the visualization. You can then trace lines of relative influence illustrating how risks interconnect and drive one another. This map really delivers the substance of the WEF Risk Report in one picture and nods to the “bowl of spaghetti” metaphor (perhaps the best risk management metaphor of all time) used by Carolina Klint, Managing Director at Marsh McLennan, in the podcast.
Shared Assessments (And Friends) Reflect
Here are some insights from Elizabeth Dunsmoor (TPRM Principal, Shared Assessments) and Chris Johnson (Senior Advisor, Shared Assessments), along with wisdom from Gary Roboff (Senior Advisor, Shared Assessments) and industry friend Cathy Allen (Founder and Chair of The Board, Board Risk Committee):
Elizabeth Dunsmoor sees value in the WEF report for Third-Party Risk Management as it “identifies and prioritizes risks, provides insights into the potential causes and consequences of various risks, helps businesses to build resilience to shocks and disruptions, and highlights the importance of global cooperation in addressing systemic risks, such as climate change and pandemics.”
Chris Johnson explains that “while the report presents a deteriorating global outlook with a focus on risks like societal polarization, technological risks, and economic downturns” it also “highlights opportunities for action to address these global risks. This dual perspective helps in balancing risk mitigation with seizing potential opportunities for positive change.”
What stands out to Dunsmoor in this year’s report is “how heavily the growing risk of livelihood crises is highlighted. Driven by factors like climate change, automation, and inequality, the WEF report warns that livelihood crises could have a domino effect, triggering other risks such as social unrest, political instability, widespread unemployment, and even conflict.”
Johnson elaborates on the richness of the content in this year’s report, lauding “the volume of information used to produce the report – insights from the Global Risks Perception Survey (GRPS), which includes views from nearly 1500 global experts, results from the Executive Opinion Survey that surveyed over 11,000 business leaders in 113 economies, and qualitative insights from 160 experts across academia, business, government, and the international community – and how the diversity of thought contributes to a product that accounts for a broad range of global risks.”
Gary Roboff and Cathy Allen collaborated in the most recent issue of the Board Risk Report to deliver a thorough review the 2024 WEF Global Risks Report. (The Board Risk Report is the flagship publication of the Board Risk Committee.)
Roboff and Allen reflect “We wish this Board Risk Report were more optimistic about the year ahead, but it is better to be aware and prepare than be caught by surprise. We think there are five things board members can do amidst the chaos and velocity of change…”
Roboff and Allen go on to detail how to develop awareness, scenario planning, transparency, flexibility, and adaptability in organizations in response to the risks presented by the WEF Risks Report. You can learn more about and subscribe to the full Board Risk Report here.
Some Good News: See You In Fort Lauderdale In March
Dunsmoor, Johnson, Roboff and Allen tease out threads of optimism from a dark forecast. In the end, the 2024 WEF Risks Report itself also offers a glimmer of hope.
Chapter 3 (pages 85-92) of the WEF Global Risks Report details strategies, endeavors and actions that are working to combat risk. Figure 3.5 details Risk Governance, or the approaches expected to “drive action on risk reduction and preparedness over the next 10 years.”
Of the 34 factors visualized in the Risk Governance graphic within the WEF Risks Report, the Shared Assessments Standardized Information Gathering Questionnaire (SIG) has the velocity of change covered in more than several areas (AI, cybersecurity, supply chain, infrastructure, human rights, extreme weather events). Conversations on our committees and our events will cover the rest! Be there or be square.
Optimism will be on tap at the Shared Assessments 17th Annual Third Party Risk Summit March 20-21 2024 at the Westin Fort Lauderdale. Our upcoming Summit By The Sea is the place to see and be seen in third-party risk management. Join us to gain awareness of and solutions to the biggest challenges facing us as risk management people, practitioners, and programs.