Global Risks: Interactive Map Shows Climate Problems Are Growing

An overly simplistic view of the global economy has fueled climate denial and skepticism for decades. Some opponents of climate change mitigation policies argue that making any progress would require an impossible modernization of our economy and result in lower profits and fewer jobs. In fact, in many ways, climate action will help businesses be more resilient in tomorrow’s economy.

Interestingly, the rapid and widespread outbreak of COVID-19 has given the world an opportunity to test the hypothesis of whether and how an economic shutdown could affect climate outcomes.

Early data suggests annual 2020 emissions could decrease up to seven percent globally due to declining global energy demand. The resulting short-term cooling effect could last until 2025, even as economies reopen and travel restrictions are lifted. Moreover, even after economies return to full operating capacity, there may be changes in the workforce that are more climate-friendly, such as keeping meetings online and reducing travel.

Climate change is an urgent threat requiring decisive action. Communities around the world are already experiencing heightened climate impacts, from droughts to floods to rising seas. The World Economic Forum’s Global Risks Report continues to rank these environmental threats high on the list.

To limit the global temperature increase to well below 2°C and as close as possible to 1.5°C above pre-industrial levels, it is essential that businesses, policymakers and civil society advance short-term and long-term global climate actions in accordance with the objectives of the Paris Agreement on climate change.

The World Economic Forum Climate Initiative supports scaling and accelerating global climate action through public and private sector collaboration. The Initiative is working on several work streams to develop and implement inclusive and ambitious solutions.

This includes the Alliance of CEO Climate Leaders, a global network of business leaders from various industries developing cost-effective solutions for the transition to a low-carbon, climate-resilient economy. CEOs use their position and influence with policymakers and corporate partners to accelerate the transition and realize the economic benefits of a more secure climate.

Contact us to get involved.

While this data is encouraging, the reality is that economic shutdowns are not sustainable and any gains in GHG emissions will be negated by a return to business as usual, especially in the dirtiest industries. This is even more the case in a fractured geopolitical environment in which alignment towards common goals has proven more difficult to achieve. And without the support of the business community, real action on climate change can be a failure.

The good news is that the commitment to the environment is stronger today than it was in the past, and there may be room to make climate action good for business.

Each year, the World Economic Forum conducts its Leaders Opinion Survey, polling thousands of business leaders around the world. Among other questions, the survey asks these leaders to identify the main risks to doing business in their country over the next decade. This year, the survey was conducted between January and July, throughout the outbreak and spread of COVID-19 around the world. The risk question received 12,012 responses from 127 countries.

New Interactive Map of Regional Risks for Doing Business from the World Economic Forum shows that the five environmental risks included in the survey rose in the rankings and were among the top 10 growing global concerns for businesses. ‘Loss of biodiversity’ and ‘natural disasters’ were the second and third risks to increase in importance during the current crisis, by eight and seven places respectively – unsurprisingly, ‘infectious diseases’ were the main factor.

Economic risks are increasing.

Economic risks are increasing.

Image: World Economic Forum

In Europe and Sub-Saharan Africa, all five environmental risks rose in ranking, and four environmental risks also rose in Latin America and the Caribbean and the Middle East and North Africa. In East Asia and the Pacific, three environmental risks are a top business concern, while two top the list in North America.

How companies perceive environmental risks around the world.

Image: World Economic Forum

If the world can overcome COVID-19, we will not only have successfully fought off a global pandemic, but we will also have the data and support to continue the global transition to a green economy. Policy changes will be a major challenge.

The impact of market closures on lives and livelihoods has forced most governments to dramatically expand their role in their economies. Response plans worth trillions of dollars have been and are being rolled out, critical regulations are being changed and fundamental policy decisions are being made. More than at any other time in post-World War II history, government action is likely to cause permanent structural changes in national, regional and global economies.

Yet it’s still worrying how — or if — many governments will incorporate green policies into their stimulus packages. Public finance constraints, electoral incentives and populist rhetoric risk reinforcing the misguided belief that there must be a trade-off between economic growth and climate action. As the World Economic Forum’s COVID-19 Risk Outlook warned, some governments have relaxed, suspended or rolled back environmental protection regulations to stimulate industrial activity, and these decisions policies risk becoming permanent and causing a serious setback to long-term sustainability.

COVID-19 will lay out how, when and where the world can rapidly transition to a new nature economy without losing sight of the societal and technological challenges this will bring. At the same time, the regional risk map shows that the global business community is increasingly concerned about the future of the planet, even at a time when boosting production and creating jobs are a priority. .

Governments must not miss this unprecedented window of opportunity to use their expanded capabilities and increased power – combined with demonstrated business concern – to deliver a green recovery.

Teresa H. Sadler