Grappling with new risks on the register

Wednesday 21 July 2021

Governments and organisations of all types are grappling with the usual risks as well as new ones that are emerging as a result of the ongoing pandemic and changing societal, environmental, technological, economic and geopolitical landscapes.

For example, how many risk registers in Jersey actually included ‘pandemic/public health crisis’ before covid hit?

How about ‘power/internet connectivity’ before the most recent fishing stand-off and threat from a French politician post-Brexit?

Two recent reports may be helpful to shed light on the broader context to help understand the changing risk landscape.

Pictured: "The World Economic Forum (WEF) looks at the top global risks identified by surveyed leaders around the world each year." (WEF Global Risks Report)

In the 2021 Global Risks Report, the top global risks were identified by more than 800 respondents and mapped according to impact and likelihood of occurrence.

The new global risks identified include youth disillusionment and mental health deterioration (as ‘pandemials’- young people aged 15-24 are experiencing high levels of distress due to disruptions in education and economic prospects), backlash against science (due to resistance and large-scale dissemination of false information about vaccination and immunization efforts), potential debt crisis (as debt to GDP ratios continue to rise along with concerns about loan defaults), digital inequality and digital power concentration.

From a business perspective, the 2021 Allianz Risk Barometer surveyed 2,769 risk management experts across 92 countries where each respondent was asked to identify up to three of the most important corporate risks facing their respective industries. The results are in the table below with the top three forming a ‘covid trio’.

Pictured: "From a business perspective, the 2021 Allianz Risk Barometer surveyed 2,769 risk management experts across 92 countries where each respondent was asked to identify up to three of the most important corporate risks facing their respective industries."

Business interruption remains at the top of the list where it was positioned seven times in the last decade. 94% of surveyed companies reported a supply chain disruption with most due to the pandemic and cyber incidents.

The pandemic has also accelerated adoption of digital technologies to enable remote working and service delivery which provides fertile ground for cyber incidents so these top three business risks are intrinsically linked.

Both reports are a worthwhile read to provide broader context that will help to identify and understand the specific risks and potential scenarios that will be unique to Jersey. 

As organisations work to update their risk registers, it may be useful to focus on two key takeaways: (a) the importance of identifying and understanding how risks are interconnected, and (b) the need for more cross-disciplinary and multi-generational thinking to better understand impacts, their ripple effects, and devise more appropriate and realistic mitigation strategies.

This article first appeared in Connect magazine, which you can read here.