The cost of living has emerged as the biggest risk over the next two years, with the threat of natural disasters and extreme weather events ranking second in the World Economic Forum’s (WEF’s) latest ‘Global Risks’ report.

The report draws on the views of more than 1 200 experts, policymakers and industry leaders.

The cost of living has spiked on the back of the Ukraine conflict and other geo-economic tensions over the last two years, which have, in turn, triggered a series of deeply interconnected global risks, including on energy and food supply.

WEF expects energy and food supply crunches to persist for the next two years, alongside strong increases in the cost of living and debt servicing.

These risks undermine efforts to tackle longer-term risks, the WEF states, notably those related to climate change, biodiversity and investment in human capital.

The ‘Global Risks 2023’ report argues that the window for action on the most serious long-term threats, including climate adaptation and mitigation, is closing rapidly.

The WEF reports that, unless the world starts to cooperate more effectively on climate mitigation and climate adaptation, global warming and ecological breakdown will worsen over the next ten years.

“Failure to mitigate and adapt to climate change, natural disasters, biodiversity loss and environmental degradation represent five of the top ten risks – with biodiversity loss seen as one of the most rapidly deteriorating global risks over the next decade. In parallel, crises-driven leadership and geopolitical rivalries risk creating societal distress at an unprecedented level, as investments in health, education and economic development disappear, further eroding social cohesion.

“Finally, rising rivalries risk not only growing geo-economic weaponisation but also remilitarisation, especially through new technologies and rogue actors,” says the WEF.

The coming years will present tough trade-offs for governments facing competition concerns for society, the environment and security.

WEF believes short-term geo-economic risks are already putting net-zero commitments to the test and have exposed a gap between what is scientifically necessary and what is politically palatable.

The report calls for dramatically accelerated collective action on the climate crisis, and for leaders to act collectively and decisively to balance short- and long-term views.

In order, the respondents to the Global Risks survey cites the top ten risks over the next two years as being cost of living, natural disasters and extreme weather events, geo-economic confrontation, failure to mitigate climate change, erosion of social cohesion and societal polarisation, large-scale environmental damage incidents, failure of climate change adaptation, widespread cybercrime, natural resource crises and large-scale involuntary migration.

Over the longer term, experts cite the top ten risks as being failure to mitigate climate change, failure of climate change adaptation, natural disasters and extreme weather events, biodiversity loss and ecosystem collapse, large-scale involuntary migration, natural resource crises, erosion of social cohesion and societal polarisation, widespread cybercrime, geo-economic confrontation and large-scale environmental damage incidents.