The annual Global Risks Reports from the World Economic Forum are based on the belief that: “The world faces risks that can be addressed only by long-term thinking and collaboration among business, governments and civil society.” 

The Global Risks 2014 report aims to support this process by:

• exploring the nature of systemic risks
• mapping 31 global risks according to the level of concern they arouse, their likelihood and potential impact, as well as the strength of the interconnections between them 
• looking in-depth at the ways in which three constellations of global risk – centred on youth, cyberspace and geopolitics – could interplay and have systemic impact.

The report is based on a survey of the World Economic Forum’s multistakeholder communities - a wide range of institions and other organisations, mapping 31 global risks according to level of concern, likelihood and impact and interconnections among them. The respondents felt that the risks of highest concern are fiscal crises in key economies, structurally high unemployment and underemployment, and water crises - see table. 

Ten Global Risks of Highest Concern in 2014

Several of these risks may sound esoteric and not related to corporate treasury, yet for many corporate treasury departments each of these risks could, somewhere around the world, impact their business and cash flows. 

Three risks in focus

The Global Risks Report 2014 makes scary reading, and the risks should be of concern to us all. Three risks are explored in depth:

• instabilities in an increasingly multipoloar world
• generation lost?
• digital disintegration

The World Economic Forum are very concerned about the risks cyberspace calling the risk Digital disintegration. They write that so far, cyberspace has proved resilient to attacks, but the underlying dynamic of the online world has always been that it is easier to attack than defend. The world may be only one disruptive technology away from attackers gaining a runaway advantage, meaning the Internet would cease to be a trusted medium for communication or commerce. Fresh thinking at all levels on how to preserve, protect and govern the common good of a trusted cyberspace must be developed. 

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CTMfile take: These risks are what Enterprise Risk Management is about. Ignore them at your peril.