Extreme weather conditions single most prominent risk to global economy: World Economic Forum

New Delhi: Extreme weather events have been seen as the single most prominent risk to the global economy by business leaders and policymakers, the World Economic Forum said on Wednesday.

Its annual Global Risks Report says that in 2017, the environment was by far the greatest concern raised by experts.

The report was made public just a week ahead of the World Economic Forum's 48th annual meeting that will take place on January 23-26 in Switzerland.

This year Prime Minister Narendra Modi will open the forum, while US President Donald Trump will close it, according to organisers.

The report says among the 30 global risks the experts were asked to prioritise in terms of likelihood and impact, all five environmental risks - extreme weather, biodiversity loss and ecosystem collapse, major natural disasters, man-made environmental disasters and failure of climate-change mitigation and adaptation - were ranked highly on both dimensions.

The report has a message - the prospect of strong economic growth presents leaders with a golden opportunity to address signs of severe weakness in many of the complex systems that underpin the world, such as societies, economies, international relations and the environment.

The report, which every January shares the perspectives of global experts and decision-makers on the most significant risks that face the world, cautions that "we are struggling to keep up with the accelerating pace of change".

It highlights numerous areas where "we are pushing systems to the brink, from extinction-level rates of biodiversity loss to mounting concerns about the possibility of new wars".

The annual Global Risks Perception Survey (GRPS) suggests that experts are preparing for another year of heightened risk.

"When we asked nearly 1,000 respondents for their views about the trajectory of risks in 2018, 59 percent of their answers pointed to an intensification of risks, compared with seven percent pointing to declining risks," said the World Economic Forum.

A deteriorating geopolitical landscape is partly to blame for the pessimistic outlook in 2018, with 93 percent of respondents saying they expect political or economic confrontations between major powers to worsen, and nearly 80 percent expecting an increase in risks associated with war involving major powers.

John Drzik, President - Global Risk and Digital at Marsh & McLennan insurance group, said: "Geopolitical friction is contributing to a surge in the scale and sophistication of cyber attacks. At the same time, cyber exposure is growing as firms are becoming more dependent on technology."

"While cyber risk management is improving, business and government need to invest far more in resilience efforts if we are to prevent the same bulging 'protection' gap between economic and insured losses that we see for natural catastrophes."

Economic risks, on the other hand, feature less prominently this year, leading some experts to worry that the improvement in global GDP growth rates could lead to complacency about persistent structural risks in the global economic and financial systems.

Even so, inequality is ranked third among the underlying risk drivers, and the most frequently cited interconnection of risks is between adverse consequences of technological advances and high structural unemployment or under-employment.

Steve Waygood, Chief Responsible Investment Officer with Aviva Investors, said: "It is important that the World Economic Forum is once again recognising the risk that the unchecked climate change poses to global prosperity."

"As a global insurer, we recognise that a world that warms by four degrees would pose an existential threat to our sector."