The Cost Of Resilience In A More Fragmented World

2025-06-03 11:05:00 ET

Summary

• While extreme weather events have unfortunately become more common and already figured last year in the top three, geopolitical risk is something business leaders increasingly have to deal with.
• Over the past few years, most indicators assessing the global risk environment have increased. Since 2022, the geopolitical risk index has averaged 50% higher than the previous decade. Currently, it remains about one standard deviation above its long-term average.
• This uncertainty impacts the economy and business activity through various channels. Consumer sentiment might be affected negatively. The business sector is also impacted by uncertainty.

By Peter Vanden Houte

The view from business leaders

Based on its annual Global Risks Perception Survey, the World Economic Forum identified earlier this year the three biggest risks for 2025: state-based armed conflict, extreme weather events, and geoeconomic confrontation. While extreme weather events have unfortunately become more common and already figured last year in the top three, the first and the third risk can be relabelled as geopolitical risk - something business leaders increasingly have to deal with....

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