The risk of failure to tackle the climate crisis dominates the concerns of global experts as the world enters the third year of the pandemic.
The World Economic Foundation’s Global Risks Report 2022 found that although shorter-term global concerns include societal divides, livelihood crises and mental health deterioration exacerbated by the pandemic, over a 10-year horizon environmental risks are perceived to be the five most critical long-term threats to the world as well as the most potentially damaging to people and planet.
Climate action failure, extreme weather, and biodiversity loss rank as the top three most severe risks with natural resource crises and human environmental damage also considered significant long-term risks.
Although covid-19 lockdowns saw a global dip in greenhouse gas (GHG) emissions, upward trajectories soon resumed. The report warns countries that continue their reliance on carbon-intensive sectors risk losing competitive advantage through a higher cost of carbon, reduced resilience, failure to keep up with technological innovation and limited leverage in trade agreements.
Business leaders are encouraged to think outside the quarterly reporting cycle and create policies that manage risks and shape the agenda for the coming years.
The report cautions, however, that short-term domestic pressures will make it harder for governments to focus on long-term priorities and will limit the political capital allocated to global concerns.
“The climate crisis remains the biggest long-term threat facing humanity,” said Peter Giger, group chief risk officer at Zurich Insurance Group. “Failure to act on climate change could shrink global GDP by one-sixth and the commitments taken at COP26 are still not enough to achieve the 1.5C goal. It is not too late for governments and businesses to act on the risks they face and to drive an innovative, determined and inclusive transition that protects economies and people.”
Responding to the report, WWF-UK chief executive Tanya Steele said the cost of inaction far outweighed the cost of action and urged the UK government to lead by example. “Building a greener future now will save money in the long term and provides opportunities for better jobs, improved health and a thriving natural world.”