Risk proofing supply chains will be critical
The rosy glow of Christmas has been quickly banished by two new reports highlighting supply chain risks, one of which proclaims: “World enters critical period of intensified risks in 2018”.
Malory Davies, Editor.
The Global Risks Report published by the World Economic Forum found that 59 per cent of experts are expecting an intensification of risks compared to only seven per cent that pointed to a decline.
Almost coincidentally with the WEF study is the Kroll Annual Global Fraud & Risk Report, which found that 97 per cent of UK executive said they had experienced a fraud incident last year – up from 90 per cent the year before.
That’s 13 percentage points higher than the global average of 84 per cent.
It’s no surprise then, that Kroll found that fraud, cyber and security risks are at an all-time high. Last year saw viruses such as WannaCry and Petya hit supply chains across the world. In fact, 41 per cent of executives surveyed said their companies had been impacted by a virus or worm attack – a year-on-year increase of eight percentage points.
The WEF study, which is produced in collaboration with Marsh & McLennan Companies and Zurich Insurance Group, ranks cyber attacks as third in terms of likelihood while rising cyber-dependency is the second most significant driver shaping the global risks landscape over the next decade.
The environment was by far the greatest concern of experts in the WEF study with five environmental risks – extreme weather; biodiversity loss and ecosystem collapse; major natural disasters; man-made environmental disasters; and failure of climate-change mitigation and adaptation – were ranked highly both in terms of likelihood and impact.
Economic risks feature less prominently in the WEF survey this year, leading some experts to worry that the improvement in global GDP growth rates could lead to complacency about persistent structural risks in the global economic and financial systems.
Of course, it takes action at governmental level to address many of these issues, but risk-proofing supply chains will still be an essential task in 2018.