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Global leaders meet on Climate risks

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Impressions from the World Economic Forum Annual Meeting 2020 inrDavos-Klosters, Switzerland, 18 January. Copyright by World EconomicrForum/Pascal Bitzr

MON, 21 SEPT, 2020-theGBJournal-Climate risks are a reminder of the need for proactive action to shape the desired new normal. This call to action from global leaders comes ahead of the World Economic Forum’s Sustainable Development Impact Summit (21-24 September) which will focus on action-oriented solutions to address the economic, human and environmental challenges of our time.

Leaders flagged severe threats to climate and the economy as top risks in the Global Risks Report 2020 published in January. For the first time, the top risks were all environment-related. However, climate and sustainability risks dropped down in rankings in the Forum’s COVID-19 Risk Outlook report.

For the first time in the survey’s 10-year outlook, the top five global risks in terms of likelihood are all environmental. The report sounded the alarm on:

Extreme weather events with major damage to property, infrastructure and loss of human life

Failure of climate-change mitigation and adaptation by government and business

Human-made environmental damage and disasters, including environmental crime, such as oil spills and radioactive contamination

Major biodiversity loss and ecosystem collapse (terrestrial or marine) with irreversible consequences for the environment, resulting in severely depleted resources for humankind as well as industry

Major natural disasters such as earthquakes, tsunamis, volcanic eruptions and geomagnetic storms

The report forecasts a year of increased domestic and international divisions and economic slowdown.

It adds that unless stakeholders adapt to “today’s epochal power-shift” and geopolitical turbulence – while still preparing for the future – time will run out to address some of the most pressing economic, environmental and technological challenges. This signals where action by business and policy-makers is most needed.

According to the report ‘’Geopolitical turbulence is propelling us towards an “unsettled” unilateral world of great power rivalries at a time when business and government leaders must focus urgently on working together to tackle shared risks.’’

“The political landscape is polarized, sea levels are rising and climate fires are burning. 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,” said Borge Brende, President of the World Economic Forum.

The Global Risks Report is part of the Global Risks Initiative which brings stakeholders together to develop sustainable, integrated solutions to the world’s most pressing challenges.

Over 750 global experts and decision-makers were asked to rank their biggest concerns in terms of likelihood and impact and 78% said they expect “economic confrontations” and “domestic political polarization” to rise in 2020.

‘’Environmental risks topped the Global Risks Report in January, however the global pandemic has since then unleashed untold damage to our economies and societies. As new partners to the initiative we are working to better understand the interconnection between climate and the pandemic. What we already know is that tackling climate change will be a cornerstone of the desired new normal,’’  said Lee Hyung Hee President, Social Value Committee, SK Group.

Again, climate spending has become a lower priority despite clear lessons to be learned from the pandemic on the importance of resilience planning. There is also a bigger case for tackling climate change due to its interconnection with risks related to jobs, health and the economy.

Risks can be tackled through public-private collaboration, which has already helped to solve some of the most urgent challenges associated with the pandemic.

WHAT THE LEADERS ARE SAYING

Peter Giger, Group Chief Risk Officer, Zurich Insurance Group said, “huge investments are being made to support COVID-hit economies. Meanwhile, repositioning the global economy for a greener future also requires tremendous resources. We should not miss a unique opportunity to tackle these two crises together, turning the COVID-19 support measures green, and building back better.”

“The crisis has devastated lives and livelihoods. It has triggered an economic crisis with far-reaching implications and revealed the inadequacies of the past. As well as managing the immediate impact of the pandemic, leaders must work with each other and with all sectors of society to tackle emerging known risks and build resilience against the unknown. We now have a unique opportunity to use this crisis to do things differently and build back better economies that are more sustainable, resilient and inclusive,” said Saadia Zahidi, Managing Director, World Economic Forum.

“COVID-19 has left businesses and societies more vulnerable to climate-related disasters such as wildfires, storms and floods. Supply chains are frail, balance sheets are stretched, and lockdowns and social distancing make emergency response harder. Meanwhile the risk of a chaotic transition, where societal concerns eventually compel governments to take drastic and costly action to reduce emissions, remains real. The recovery from COVID-19 must spur greater resilience and set a clear path to a low-carbon future,” said Scott McDonald, President & CEO, Oliver Wyman Group, Vice Chair, Marsh & McLennan.

The Forum’s Global Risks Team will release new country and regional data Thursday 8 October on https://www.weforum.org/global-risks

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