Davos – Extreme Weather Events Top Risks

In advance of the discussions, the Forum published the 19th edition of their Global Risks Report. The Global Risks Report was built around two surveys designed to assess risk perception and capture executive opinion.  Those surveyed included 11,000 business leaders in 113 economies along with approximately 1,500 experts across “academia, business, government, the international community and civil society”.[i] The compilation of responses resulted in near- and short-term rankings, by severity, of perceived global risks.

Survey results starkly highlight the escalating global concern around environmental issues.  In the short term, “Extreme weather events” ranked as the #2 global risk behind “Misinformation and disinformation.”  Over a 10-year horizon, “Extreme weather events” was identified as the top risk and the remainder of the top four were also in the environmental space. The table below represents the respondents’ rankings in the severity of a set of global risks over 2- and a 10-year periods.

Coming away from the meeting, McKinsey, in crafting their 10 key takeaways from the 2024 Forum in Davos cited “Sustainability is a business imperative”[ii] as #4. This reinforces that world leaders at Davos believe that business has a key role to play in tackling sustainability issues.

COP28 – Beginning of the End

Just prior to Davos, in December, the United Nations hosted a 2-week-long Climate Change Conference in Dubai (COP28). A key outcome from COP28 called on Parties to “take actions towards achieving, at a global scale, a tripling of renewable energy capacity and doubling energy efficiency improvements by 2030”. UN Climate Change Executive Secretary Simon Stiell called the agreements reached the “beginning of the end” of the fossil fuel era.[iii]

Despite the challenges to implementation, we see these events as crucial steps forward and are cautiously hopeful. However, given the fragility of intention when geopolitical threats take center stage, we recognize that goals like those presented at Davos and COP28 require sustained effort and collaboration.

Investment Screening for Environmental Risks

As a fiduciary financial advisor, 1% for the Planet member, and a Certified B Corp, we help clients align their financial goals with their values. We are heartened that the link between investment and environmental outcomes has a platform with global reach. While there’s no one solution, we take pride in the care we bring to creating diversified portfolios for clients who choose to reduce their exposure to environmental risks.

[i] https://www.weforum.org/publications/global-risks-report-2024/

[ii] https://www.mckinsey.com/featured-insights/themes/10-key-takeaways-from-davos-2024

[iii] https://unfccc.int/news/cop28-agreement-signals-beginning-of-the-end-of-the-fossil-fuel-era