The World Economic Forum's Global Risks 2013 report issued in January 2013 was the gloomiest yet. It highlighted wealth gaps (severe income disparity) followed by unsustainable government debt (chronic fiscal imbalances) as the top two most prevalent risks, in a survey of over 1,000 experts and industry leaders, which reflects a slightly more pessimistic outlook overall for the coming 10 years.

Environment Risks
Following a year scarred by extreme weather, from Hurricane Sandy to flooding in China, respondents rated rising greenhouse gas emissions as the third most likely global risk overall, while the failure of climate change adaptation is seen as the environmental risk with the most knock-on effects for the next decade.
Two leading experts are extremely worried:

• John Drzik, Chief Executive Officer of Oliver Wyman Group, a part of Marsh & McLennan Companies, said: "Two storms – environmental and economic – are on a collision course. If we don't allocate the resources needed to mitigate the rising risk from severe weather events, global prosperity for future generations could be threatened. Political leaders, business leaders and scientists need to come together to manage these complex risks."
• David Cole, Group Chief Risk Officer of Swiss Re, said: "Coping with the economic and climate-change crises is unfortunately no longer seen as a continuum, but as opposing choices. The idea has gained ground that we can't have solutions to both. But we need to go beyond this thinking-in-boxes approach. So because smart risk management is about taking a holistic stance on situations, we should do the same when it comes to the economic and climate-change challenges we're facing."

Digital Wildfires
The authors of the report also believe that the digital age brings with it new risks. 'From the printing press to the Internet, it has always been hard to predict how new technologies might shape society. While in many ways a force for good, the democratization of information can also have volatile and unpredictable consequences, as reflected in the riots provoked by an anti-Islam film on YouTube. As the media's traditional role as gatekeeper is eroded, this case considers how connectivity enables "digital wildfires" to spread, and asks what can be done to put them out.'

Impact on Corporate Treasury
These conclusions have profound implications for how businesses operate and also for the corporate treasury department:

• supply chains will need to be diversified, so not to be dependent on just one producer, e.g. impact of the hurricanes and earthquakes in Japan on the semi conductor industry
• choice of operational centres - including SSCs and corporate treasury departments - will have to take into account these new risks. Maybe two or more corporate treasury departments and SSCs are needed to minimise the new operational risks
• procedures for mitigating the impact of potential 'digital fires' which could damage an organisation's reputation or share price needs to be put in place.

New Country Resilience Rating in development
The Forum is carrying out the groundwork for a new country resilience rating, which would allow leaders to benchmark their progress in managing these risks. It will be based upon the notion that no nation alone can prevent exogenous, global risks occurring, which makes national resilience a crucial first line of defence.

This new resilience rating will be an important indicator for corporate treasurers as to how safe their investment in a country really is.