Global Risks Report 2013 Risk Talk: experts discuss resilience in the face of the unthinkable

Environmental sciences expert says human activities have become a geological force of change, but not always for the good. Deforestation, air pollution, loss of bio-diversity and climate change are all symptoms of this development.

Speaking with attendees at the Swiss Re Centre for Global Dialogue Risk Talk "Resilience in the face of the unthinkable," Johan Rockström, executive director of the Stockholm Resilience Centre, said that there was solid empirical evidence that the world was close to "tipping points," critical planetary boundaries beyond which our biosphere would no longer be able to absorb damaging pressure in predictable ways.  One example of this phenomenon, he said, might be the relatively sudden "tipping" of the Amazonian rainforest into a savanna landscape.

The 21 February Risk Talk also focused on the findings of this year's Global Risks Report, the flagship publication of the World Economic Forum. The 2013 edition highlights economic and environmental resilience, digital wildfires in a hyper-connected world and the dangers of hubris on human health.

Lee Howell, member of the WEF Managing Board, pointed out that the GRR 2013 not only benefitted from the specialist insights of its key partners, including Swiss Re, but also reflected the analyses of 1,000 other risk experts around the world.

Encouraging signs of progress

Expert Johann Rockström at the GRR 2013 Risk Talk. Photo: Alain Camenzind

Even with his initial warnings concerning the state of our environment, Rockström believes there is hope.

"Something has been happening in fact under the radar screen over the past 5-6 years, and that is these issues are moving from being regarded as CSR issues into core concerns for the boardrooms of corporations," he told the audience.

"We're starting to see at least the private sector leadership being more genuinely concerned, and seeing opportunities in that transition to sustainable production and consumption patterns."

Swiss Re Chief Risk Officer David Cole added that the only sensible approach was to concentrate on concrete measures we can take to mitigate these risks rather than worry about developments beyond our control.

Country risk officers

The Talk also focused on strategies to navigate successfully through the risks – seen and unseen - and the concept of country risk management (CRM).

"An idea that we've been discussing for some time is a 'CRO,' not in the form of a chief risk officer, but in the form of a country risk officer," Cole said.

"This year, in a number of discussions that took place in Davos this year at the WEF Annual Meeting signaled that this idea is starting to develop feet.  A lot of folks are talking about it, and once again, some people are doing something with it."

Cole also stated that Hurricane Sandy had also spurred momentum for concrete CRM policy.

Immediate remedial action

According to Rockström, vital short-term measures to address these dangers would be to monitor and value risks, much in the way that the insurance industry does. This, he said, needed to be reinforced by strong political leadership willing to regulate risk.

Rockström also mentioned two "fast-track opportunities" in the agriculture and energy sectors.  On the agricultural side, to feed the world's growing population, this would entail transitioning to sustainable, resource-conserving methods of farming.

At the conclusion of the panel discussion, Cole commented that whatever strategy permutations were ultimately adopted, they needed to be complemented by a willingness to track emerging risks, to assess what their impact might be and to take mitigating action as early as possible.

Image: New York skyline in darkness after Hurricane Sandy

Published 6 March 2013

Managing our risks

Risk Management at Swiss Re aims to ensure an appropriate risk-reward balance in all of the Group's risk taking activities. This requires a strong and independent risk management organisation and comprehensive...

Read the whole story

Cyber resilience for the 21st...

The news is increasingly dominated by stories of cyber attacks on large organisations. Recent examples serve as a blunt reminder of the substantial financial and reputational impacts that such events...

Read the whole story