Extreme weather tops the list of risks considered most likely to cause a “material” global crisis in the year ahead, and in Australia it is viewed as a major threat to the economy, according to a World Economic Forum (WEF) report produced in partnership with Zurich and Marsh McLennan. 

About 66% of nearly 1500 respondents to the report’s Global Risks Perception Survey picked extreme weather, followed by 53% who chose misinformation and disinformation generated by artificial intelligence (AI), 46% societal and/or political polarisation, 42% the cost-of-living crisis and 39% cyberattacks. 

In a separate Executive Opinion Survey, respondents in Australia listed economic downturn as the biggest threat to the country in the next two years. Inflation placed second, followed by household debt, energy supply shortages and extreme weather. 

Zurich Australia and New Zealand Chief Risk Officer Jaimie Sach says an array of risks dominate global concerns in the near term, and in the Australian context, their impact will be just as substantial. 

“Climate change in particular will drive a worsening natural peril environment combined with an urgency for national energy transition, leading to significant risks relating to energy supply and reliability unless appropriate resilience considerations are actioned,” he said. 

“This grid fragility, highlighted in recent Zurich research, will present a core opportunity and central challenge to energy policy in the near and long term. Likewise, as other nations seek to achieve climate targets and accelerate investments in renewable energy technology, the demand for finite and geographically concentrated critical minerals – such as graphite, lithium and cobalt – will present both a risk and opportunity for Australia given its key role in the global supply chain.” 

The WEF report says advanced economies such as Australia will not be insulated from potentially irreversible changes to the world’s climate patterns. “For example, in Australia, nearly 521,000 homes are predicted to be uninsurable by 2030 due to the risks of extreme weather,” it says, citing the United Nations’ 2023 Interconnected Disaster Risks report. 

On AI-generated misinformation, Marsh McLennan Europe Chief Commercial Officer Carolina Klint says AI breakthroughs will radically disrupt the risk outlook for organisations and many will struggle to react to threats arising from misinformation, disintermediation and strategic miscalculation. 

“At the same time, companies are having to negotiate supply chains made more complex by geopolitics and climate change and cyber threats from a growing number of malicious actors,” she said. “It will take a relentless focus to build resilience at organisational, country and international levels – and greater co-operation between the public and private sectors – to navigate this rapidly evolving risk landscape.”  

The survey questioned 1490 experts across academia, business, government, the international community and civil society. Click here for more from the Global Risks Report 2024.