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Environment Dominates the Risk Outlook of Younger Stakeholders

Economic, environmental and domestic political risks all dominate the short-term concerns of respondents to the Global Risks Perception Survey. Its results are presented in the 2020 Global Risks Report from the World Economic Forum, produced with support from Marsh McLennan and other partners. 

The first column shows risks that are expected to increase by the WEF’s multistakeholder community, while the second column shows the concerns of WEF’s younger constituents. 

It illustrates the different priorities of each group, with the latter being much more focused on climate change and its impacts. 

Economic confrontations and their effects on trade — complicated by protectionism and the lack of a resolution to 2019’s trade war — mostly concern the group of WEF multistakeholders, along with the potential for a recession in a major economy.  

Economic inequality and social issues are another focal point: The domestic political fractures and protests seen in 2019 are expected to continue as people demand more from and remain critical of their governments. Without social stability, countries will find it more difficult to address key global issues, the report says. 

The interrelated nature of global risks complicates their potential solutions, for example, “a growth in nationalist policies risk[s] preventing meaningful action,” against climate change, the report notes. 

Lower-Income Households Are At Risk of the ‘Homework Gap’

Source: Pew Research Center

Remote learning during the pandemic exposed the already fragile technological gap among income groups — 46% of lower-income families report having at least one problem related to the “homework gap.” Pew Research identifies this gap as “school-age children lacking the connectivity they need to complete schoolwork at home.”

Ninety percent of Americans state in a Pew Research report that the internet has been essential during COVID-19; however, about a quarter of home broadband users and smartphone owners cite affordability as a key concern as the pandemic continues. 

Over 60% of Americans believe that the government should take responsibility and ensure fair access to high-speed internet. And, as COVID-19 continues to expose the digital divide, more U.S. adults are in favor of schools providing digital technology for online learning than they were in April 2020. 

Shipliner Schedule Reliability Halves to 40% Compared to 2019

Source: Sea-Intelligence

The reliability of shipliners’ schedules has dropped by 38.2 percentage points, compared to 2020. Sea-Intelligence analyzed 34 different trade lanes and more than 60 carriers in its Global Liner Performance report and notes that “None of the top-14 carriers recorded a Y/Y improvement in schedule reliability, with all carriers recording double-digit declines of over -31.0 percentage points.”

Vessels’ late arrival times increased by almost half a day to 6.41 days. “The level of delays in 2021 have been the highest across each month compared to previous years,” notes Sea-Intelligence.

Efforts to stay on schedule have been hindered by a block in the Suez Canal in March, the Yantian terminal closure, and “border restrictions and port worker absences,” according to The Financial Times, as well as a “partial shut down of Ningbo-Zhoushan port.” High shipping prices and congestion at ports are also contributing to the logistical issues, which are expected to continue into next year. 

Ransomware Attacks on Critical Infrastructure Are Surging

According to Temple University’s Cybersecurity in Application, Research & Education Laboratory, ransomware attacks on critical infrastructure are on the rise, with about 75% of recorded incidents since 2013 having taken place in the last 18 months. The increasing frequency and severity of ransomware attacks are reflected by the steady increase in cyber insurance prices.

Threat actors can target critical infrastructure with geopolitical or financial motivations. They are well aware of the potential knock-on impacts on businesses and economies, as these attacks can cripple unprepared organizations by halting operations for extended periods.

A failure to prevent or respond to ransomware incidents can lead to reputational and liability risks, with lasting impacts on trust dynamics between infrastructure operators and key stakeholders such as governments, investors and consumers. These trust implications are further discussed in Built to Last: Infrastructure and Trust In A Changing World, a new report from Marsh McLennan.

European Banks Lead With 80% of Assets Aligned to Net-Zero Targets

Net Zero Banking Alliance Regional

With COP26 approaching, the past few months have seen a surge in the number of banks committing their lending and investment portfolios to net-zero targets. Activity is concentrated among listed banks. As of now, the total assets of net-zero aligned listed banks amount to $51 trillion, accounting for 38% of global listed banking assets and representing 93% of global net-zero aligned assets.

Progress, however, is uneven across geographies. European banks lead the way, having committed about 80% of listed banking assets to net-zero targets, followed by North America at 56%. Latin America, Asia Pacific, and Middle East and Africa made slower progress, with only 29%, 11% and 1% of their listed assets being currently aligned.

As more institutions pledge to reach net-zero financed emissions globally, borrowers that accelerate their decarbonization efforts and incorporate carbon disclosure practices are likely to gain preferential access to capital across geographies.

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