A majority of business leaders across G20 nations remain concerned about the risks of economic downturns, labour shortages, and rising inflation, despite some signs of global economic recovery.
The annual survey, which gathered input from over 11,000 business leaders in 121 countries, outlines the five most pressing risks for businesses in the next two years. Economic downturns, talent shortages, and inflation ranked as the top three concerns among respondents from G20 countries, followed by poverty and inequality.
Extreme weather events, linked to climate change, completed the top five risks, reflecting the severe weather impacts experienced in several G20 nations, including Brazil, Germany, Indonesia, and the United States, over the past year.
Chris Lay, CEO of Marsh McLennan UK, noted the uncertainty facing UK businesses. He highlighted economic pressures, labour shortages, and inflation as persistent challenges, compounded by demographic shifts.
“Equally concerning are the implications of new technologies, which, while offering tremendous potential for growth and innovation, present exposures that require careful management. Businesses need to shore up their defences against these new and emerging risks, to stay resilient and adaptable to future challenges,” Lay said.
The labour shortage issue underscores ongoing demographic and structural changes. In many sectors, businesses are struggling to attract and retain skilled workers, which has become a critical operational risk.
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The report also revealed an increased awareness of technological risks, such as potential adverse effects from artificial intelligence (AI), including misinformation and disinformation. These risks were listed six times in country-specific rankings, compared to three mentions in the previous year.
For instance, technological risks were the top concern for businesses in Indonesia, ranked third for the United States, and fourth for the United Kingdom.
This growing concern reflects the dual nature of emerging technologies, which offer opportunities for growth while introducing new vulnerabilities. Lay observed that although technological advancements hold the potential to drive innovation, they also require careful risk management to mitigate exposure.
The inclusion of extreme weather events as a top-five concern across G20 nations highlights the rising impact of climate-related risks. Severe flooding, wildfires, and extreme heat in recent years have brought these challenges into sharp focus.
Peter Giger, group chief risk officer at Zurich Insurance Group, emphasised the importance of addressing climate risks alongside economic challenges.
“2024 is on track to be the warmest year on record, and so the escalating impacts of climate change must not be ignored. The rapid advancement of emerging technologies will help to overcome the growing challenges, but they also pose new threats,” Lay said.
Giger also stressed the importance of broadening risk management strategies to include non-economic risks, such as climate impacts. By adopting a proactive approach, businesses can enhance their resilience while positioning themselves for sustainable growth.
The survey’s findings reflect an increasingly complex risk environment for businesses worldwide. While economic risks remain at the forefront, emerging challenges like climate change and technological vulnerabilities are gaining prominence.
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