World Economic Forum: Global risks update 2020

Risk is of critical importance to internal auditors. It is at the heart of our assurance and advisory work and forms the basis for an important Global Risk Report by the World Economic Forum, which brings with it key challenges for the profession.

In this piece, we explore WEF’s Global Risks Report 2020 and focus on top global, European and UK risks. As audit leaders, we ask you to think about how these risks relate to your organisation’s activities and your audit plan.

Top Global Risks

WEF’s Global Risks Report 2020 is the output of a survey of 800 forum members together with 200 members of a newly formed Global Shapers Community – recognising a younger generation of emerging global social entrepreneurs and leaders.

For the first time in its 15-year history, the top five risks in terms of likelihood all relate to one category – climate change and related environmental issues.

Top 5 global risks in terms of likelihood

In terms of impact, climate action failure heads the list and unsurprisingly given the ongoing geopolitical tensions across the globe, weapons of mass destruction is the only non-climate related risk to feature for the fourth year running, although it has dropped into second place behind climate action failure. A clear sign of the magnitude of the threat.

Top 5 global risks in terms of impact

  • What climate change and related environmental risks has your organisation identified?
  • Is climate risk a priority is your sector?

The Institute’s Risk in Focus 2020 highlighted that of the 528 chief audit executives surveyed across Europe, environment and climate change was only a top five risk for 14% of organisations. Even more concerning is that less than 30% thought it would be in their top five over the next five years.

Why is this?…