The report finds that the main risks in the next five to ten years will relate to climate change, technology and geopolitical instability. Risks are increasingly interconnected, meaning that protective measures must be considered through a global, interdisciplinary, and multi-stakeholder approach.
Find out the major trends in video:
Our changing risk landscape: environmental, technological and geopolitical risks dominate
The 2019 AXA-Eurasia Group Future Risks Report identified climate change as the most significant emerging risk, reflecting the growing awareness of the far-reaching consequences of environmental risks on society. Our experts emphasized that climate change, biodiversity loss, and environmental degradation are interlinked and self-reinforcing, while demographic trends are expected to increase these risks even further.
Technological risks are also among the greatest concerns of risk experts. These risks are rapidly evolving, increasingly complex, and becoming ever more associated with geopolitical and societal risks. Beyond cyber security risks, the future of data regulation, the challenges of artificial intelligence, and the prospects of quantum technology are all major factors to consider in the analysis of the technological risks of tomorrow.
This year’s report found geopolitical instability to be the third major emerging risk. Experts cite concerns over the socioeconomic consequences of the decline in multilateralism and the rise of populism. Consequently, some governments have a reduced ability to monitor and mitigate emerging risks, and to manage crises when they occur. No part of the world is immune to the moving geopolitical landscape and the ripple effects it has on other risks. For example, Europe faces important challenges from internal economic and political forces, and in establishing its place in a world increasingly at risk of dividing into US and China-led blocs.
Public authorities are not sufficiently prepared to face emerging risks, according to 83% of surveyed experts. Building resilience is key for all organizations, both public and private, and risk mitigation must not be left to governments only. Ultimately, private actors and civil society—in collaboration with policymakers—must step up to the challenge and play their part in preparing for the risks of tomorrow.
It may be surprising to see macro-economic risks occupy a relatively low position in this year’s top ten, but these concerns are no doubt embedded in other risks, especially geopolitical instability. And while the risk of pandemics and infectious diseases is the only health-related risk to appear in the top ten, these risks have generally increased. This rise is primarily due to the increasingly fragmented political landscape and economic constraints, which can hinder medical advances and increase health risks.
Climate remains risk number one
Climate change tops the table for the fourth consecutive year, with a compelling 67% of survey respondents identifying it as the most important emerging global risk. Experts cited concerns over extreme weather events such as floods, storms, and rising sea levels, which are perceived as having more tangible effects than financial or liability risks related to climate change.
The general public’s level of awareness is higher for climate change than for most risks. Conversely, perception of the ability of public authorities to address this most serious and immediate risk is among the lowest of all major risks. Frustration was expressed regarding the lack of globally coordinated action in terms of mitigation and adaptation strategies.
Converging perceptions across regions
To better understand the regional dimension of risk, Eurasia Group analysts have explored a set of domestic political and geopolitical challenges for three of the world’s major regions: Asia, Europe, and North America.
This year’s survey confirms a trend observed last year: the perception of major emerging risks is rising and converging across the world. Even though the three main risks may not materialize in the same way and to the same extent from one region to the next, experts agreed that they are high-stakes and highly complex risks.
Interrelated and interconnected
A central theme of this year’s report is the growing interconnectivity between many of the emerging risks. One risk can influence another, or even trigger new, previously unanticipated risks. For instance, climate change can foster social discontent and local conflict that can lead to geopolitical instability.
These complex links therefore demand a more transversal approach to risk identification, which must also translate into cohesive and integrated risk management.
For the 2019 edition, AXA has formed a partnership with Eurasia Group, a US-based leading geopolitical advisory and consultancy services firm. This collaboration has enabled AXA to enhance its in-depth risk knowledge and extend the scope of the report to encompass geopolitical trends, which are rapidly re-shaping the global risk environment.
More than 1,700 risk experts from over 50 countries contributed to the 2019 survey. These experts responded to open-ended questions with the aim of ascertaining their views on which emerging risks currently have the most significant implications for society.