After another year of extreme heat and ice sheet melt, environmental issues are now considered to be the top five long-term risks confronting the global economy, organizers of next week’s gathering of elites in the Swiss resort of Davos said Wednesday.
Citing a survey of more than 750 key decision-makers, the World Economic Forum said catastrophic trends such as global warming and the extinction of animal species would be front and center at next week’s meeting.
But while the environment has surpassed risks such as cyberattacks and recession on the list of priorities for policymakers, concerns are compounded by growing international divisions, evident in disputes such as the U.S.-China trade war.
“The political landscape is polarized, sea levels are rising and climate fires are burning,” said Borge Brende, president of the World Economic Forum.
“This is the year when world leaders must work with all sectors of society to repair and reinvigorate our systems of cooperation, not just for short-term benefit but for tackling our deep-rooted risks.”
Brende said that the world has a decade to deal with the climate emergency, and that not doing so within that time frame would be akin to “moving deck chairs on the Titanic.”
Those surveyed in the World Economic Forum’s Global Risks Report 2020 identified economic disputes as the No. 1 risk to the global economy this year. For the longer-term outlook, however, environmental concerns accounted for the top five risks.
The findings illustrate how environmental issues have become more important to the public and to policymakers, particularly after campaigning efforts from the likes of Swedish teen activist Greta Thunberg and the Extinction Rebellion group. Evidence of a man-made climate emergency is piling up, in light of events such as the wildfires in Australia, as well as heat waves that made 2019 the second-warmest year ever recorded on Earth and the last decade as a whole the hottest.
The biggest long-term risk cited in the report was the possibility of extreme weather events, such as floods or storms. The others were the failure to properly plan for climate change, man-made environmental disasters such as oil spills, major biodiversity loss and natural disasters such as earthquakes or tsunamis.
The pressure to turn things around doesn’t just lie with government leaders. Company executives are also facing calls to change their business models to set aside anything that might worsen climate change.
“There is mounting pressure on companies from investors, regulators, customers and employees to demonstrate their resilience to rising climate volatility,” said John Drzik, chairman of Marsh & McLennan Insights, which, along with Zurich Insurance Group, helped the World Economic Forum compile the report.
“High-profile events, like recent wildfires in Australia and California, are adding pressure on companies to take action on climate risk at a time when they also face greater geopolitical and cyber-risk challenges.”
The trend was highlighted this week when BlackRock CEO Laurence Fink said his firm, which manages about $7 trillion for investors, will put climate change and sustainability at the heart of its investing approach.
“When your stakeholders align, I think there is an impact on CEOs whatever their underlying philosophy,” Drzik said.
The annual gathering of the business and political elites in Davos can help in that process, he said, as it assembles “the influencers from the sectors that have to work together.”
The annual Davos meeting has been criticized over the years by those who say it’s just a talking shop for leaders flying in on their private jets to enjoy some winter snow.
Adrian Monck, the World Economic Forum’s managing director, defended his organization’s role when it came to climate issues. He noted that most people who go to Davos travel from Zurich by train. He also pointed out that the forum has carbon-offsetting programs and that biofuels are available at Zurich Airport to those who opt to jet in.
“It is something we take very seriously,” he told a news briefing in London. “There is nothing worse than an organization identifying a risk and doing nothing about it.”
President Trump, who has taken a more unilateralist approach to international issues than his predecessors, is likely to be one of the main points of interest next week, alongside Thunberg, who is appearing at the forum for the second year running.