Economic pressures dominate concerns of North American leaders-WEF – Gudstory

In the World Economic Forum’s (WEF) annual survey of the top business risks in the US and Canada, increased economic pressures led to long-term risks such as extreme weather events, artificial intelligence (AI) and cyber.

In response, business leaders are urged to plan over “multiple risk horizons” and build organizational resilience as short-term and long-term risks increase.

In WEF’s 2023 Executive Opinion Survey, more than 11,000 executives from around the world shared their views on the most significant risks to doing business in G20 countries over the next two years.

The risk of economic disruption, such as recession or stagnation, tops the list in many G20 countries. In the US and Canada, lingering fears over the pandemic also appeared on the list, as infectious diseases emerged as the second and fifth most important risks in those countries, respectively.

The survey was conducted in partnership with Marsh McLennan and Zurich North America.

Reed Sawyer (pictured right), head of the emerging risks group at Marsh, said the top five risks in the US reflect a theme of weakness among businesses.

“What this is telling us is continued weakness in the system and concerns over further shocks,” Sawyer said.

What are the top 10 risks of doing business in North America?

In Canada and the US, the top ten risks identified by business leaders in the WEF’s 2023 survey are:

Sawyer noted that the focus on short-term economic pressures is not surprising, especially in light of increasing global conflicts insurance business,

“It is not surprising that economic issues dominate when we think about recession fears. “There’s a proverbial soft landing that we’re all looking for in the economy,” Sawyer said. insurance business,

“Although we have made significant progress with the jobs report and the inflation report that came out this week, there is still an enormous concern when we think about how events in the Middle East could escalate and create other broader issues. Keeps maintained.”

Jessica Balsam (pictured at left) from Zurich North America’s Resilience Solutions sustainability team noted the uncertainty over climate and energy issues.

“From a resilience perspective, the issue is uncertainty around the depth and breadth of climate-related issues,” he said. “Climate and energy issues are very closely related, and seeing them both on the list is certainly something we are paying attention to and preparing for.”

WEF Conclusion – Risk managers must balance short- and long-term risks.

The WEF survey findings come as G20 countries prepare for COP28 in Dubai after a year of record-breaking global temperatures and severe weather events.

Globally, environmental risks such as extreme weather events and failure of climate change adaptation were mentioned only eight times in this year’s top five risks across G20 countries in the WEF survey from last year.

Technological risks, including threats related to artificial intelligence, appear only three times in the G20’s top five rankings.

For Sawyer, the absence of climate, cyber and AI risks among the top five concerns for US business leaders is notable.

“Cyber’s absence from the top five is significant when considering where it sits in other surveys. The fact is that AI risk and climate are not in the top five,” he said.

“What the last five years have taught us is that given the turmoil we are facing, we need to plan across multiple risk horizons. The challenge comes when we start aligning priorities and risk capital to deal with short-term risks but at the expense of the choices we are making in the future.”

Balsam has been in climate work for the past 15 years and has witnessed a dramatic shift among politicians and elected officials regarding their perception of climate risk. He emphasized that organizations should take active steps towards decarbonization in addition to enhancing climate resilience.

“I have seen how people are not only prioritizing climate change but also becoming aware,” he said. insurance business,

“The assumption is that we can understand or feel the coming climate crisis. We experience several extreme weather events at the same time. This is good and important, but we must also plan long-term from a resilience and decarbonization perspective.

Ultimately, Sawyer said the complex landscape of risks means North American organizations must stay abreast of global developments.

“If we turn the clock back 10 years, it’s easier to think about a much smaller list of risks,” he said. “There are more and more difficult concerns to think about as a risk manager and underwriter [such as] How do I think about the broader issues we face? How do I prioritize cap risk capital, and what will that mean as we move forward?

What are your thoughts on WEF’s 2023 list of the top risks in doing business? Tell us in the comments.