Global Risks Report 2025: Is your business future proof?

Introduction 

Managing risks and leveraging opportunities are critical components of a board director's role. On 7th May, the Climate Governance Initiative took a deep dive into the key takeaways from the World Economic Forum's Global Risks Report and how those takeaways will influence boardroom decisions. The webinar covered the findings of the report over both the short term and long-term global outlook, with 5 of the top 10 risks in the 10-year horizon being environmental risks. A panel of board directors reflected on the outcomes of this Report and how those outcomes will influence strategy planning to ensure the long-term sustainability of the company. 

It is essential for all organisations to take the risk landscape seriously, to understand it and then to use that as a platform for figuring out what are the solutions and what are the ways forward – Mark Elsner 

View the recording of the webinar here: 

Key takeaways for board directors

• Adopt a Long-Term Risk Perspective: Boards are often adept at addressing short-term issues, but long-term strategic risks require equal attention. A reactive, "wait and see" approach is inadequate. Proactive oversight and foresight are essential to build resilience and create long-term value.
• Understand Your Operating Context: Risks may not always be immediately visible. If their impact on the business isn't clear, it suggests a need for deeper analysis. Boards must ensure management is rigorously assessing the broader operating environment—only through this understanding can meaningful, forward-looking strategies be developed. 

I have two key messages that I think board members and executives should have in mind. The first is we have to deal with the circumstances that we have, not the ones that we would like. We have to fully understand context: we’re moving away from globalisation to fragmentation and also living in very noisy times, so I think we need to be realistic about this. The second is the only way to cope with fragmentation is promoting a shared vision at all levels. We need business strategies that align individual interests with the common good. – Alejandro Díaz de León 

Practical insight: how can boards address risk?

• Align Short-Term Performance with Long-Term Vision: Effective governance requires integration of short-term KPIs with long-term strategic objectives. Delegating specific topics—such as risk, audit, and sustainability—to dedicated committees allows for deeper exploration and better-prepared recommendations for full board consideration. Boards must actively seek the intersection between short-term outcomes and long-term goals.
• Institutionalise Scenario Planning: Boards should cultivate a culture of scenario thinking. Preparing for extreme but plausible events—such as geopolitical shocks or system failures—enhances psychological readiness and strategic agility. Regular exposure to these scenarios helps directors manage uncertainty and can become a source of competitive advantage.
• Clarify Purpose and Align on Shared Goals: A clearly defined organisational purpose that links business performance with societal benefit is key to unifying stakeholders and mitigating internal fragmentation. This alignment reinforces strategic clarity and strengthens stakeholder trust.

There are so many issues on the table, but it's also the speed of these issues. And if you haven't really adjusted your long-term vision, it's much harder to have something to hold onto and it's much easier to react to what's coming. Most boards can do better on spending a bit more time on the longer perspectives, more support for management on the shortest perspectives and actually help with clarifying the direction. – Liselotte Engstam 

Global Risks – Key findings from the report

• The world is becoming increasingly fragmented and polarised. Both short-term (2025–2027) and long-term (2035) outlooks reflect growing pessimism. Respondents anticipate continued volatility, with increasing fragmentation in global systems.
• Inequality emerges as the most interconnected global risk. Addressing it could mitigate the severity of many other systemic threats, underscoring the need for holistic business strategies.
• Short-term risks (2025–2027): Geopolitical conflict and confrontation dominate the immediate horizon. However, by 2027, societal risks—particularly misinformation and disinformation—surge in prominence.  
• Long-term risks (2035): Environmental threats, particularly extreme weather events and biodiversity loss, take precedence in the long term.  
• While geopolitical dynamics have evolved in recent months, report authors affirm that long-term risk rankings remain robust. The consistency of findings over several years reinforces the credibility of the long-range outlook. 

You can read the full 2025 Global Risks Report here.