As the acute impacts of the pandemic subside in many countries, organizations worldwide are still set to encounter significant risks in 2023, according to the International SOS Risk Outlook 2023 report findings.
The report is based on a survey of 1,218 senior risk professionals across 108 countries and provides a detailed view of some of the major risks that organizations must address in 2023.
1. The impact of geopolitical shifts
The Russian invasion of Ukraine was the defining security issue of 2022, highlighting how geopolitics and the threat of interstate conflict are back on the corporate risk agenda. The conflict will still have an impact in 2023, so it is beneficial for organizations to learn how to handle the shifting global risk environment effectively.
Geopolitical volatility will also spread beyond Russia and Ukraine in the next 12 months, as increasing fissures between Russia and the West will impact other conflicts and exacerbate longstanding geopolitical tensions.
Many crisis management teams are learning to deal with a state of “perma-crisis.” It will benefit organizations in 2023 to provide the proper training, investment and support for these teams, as experts have drawn attention to significantly high levels of crisis management fatigue. Managing crisis management fatigue is critical in moving from “perma-crisis” to crisis resilience. Organizations that effectively embed learnings from the last two years will emerge with more robust capabilities to manage challenges.
Top drivers of productivity loss in the next 12 months, International SOS Risk Outlook 2023 Report. Image courtesy of International SOS
2. Social unrest
Social unrest will be a significant item on the C-suite agenda in 2023, as the problem is multifaceted, affecting organizations and employees in many ways. Some themes and critical points for 2023 include:
- Volatility in energy and agricultural markets will fuel unrest, particularly in unstable, fragile economies. Most likely locations: Sub-Saharan Africa, Egypt, Lebanon
- Lack of progress on resolving underlying economic or political issues will provoke growing public dissatisfaction and cycles of unrest where the risk of violence grows over time. Most likely locations: Pakistan, Sri Lanka, Ecuador, Peru, Iraq
- Polarization at a global level will be reflected in further domestic polarization inflaming pre-existing triggers for social unrest and, in extremis, influencing more localized violence and criminal activity.
3. Climate change
Experts advise that climate change is contributing to an acceleration in the emergence of infectious diseases, illustrated by the multiple “unusual” outbreaks of the 21st century, including SARS, Ebola, COVID-19 and Mpox. A briefing published in Nature Climate Change estimates that “over half of known human pathogenic diseases can be aggravated by climate change.”
Climate change is expected to increase mosquito-borne diseases as temperatures and standing water levels increase. This situation could potentially cause outbreaks of Malaria, Dengue Fever and Zika in places where they have never been present before and more frequent outbreaks in areas where they already exist.
Best practices for combatting these threats include undertaking risk assessments of existing and potential health threats and incorporating forecasts for potential geographic extension of hazards due to climate change and other forces.
4. Business travel
The report also highlights that most organizations (86%) are keeping travel risk management budgets the same or increasing, so travel will likely continue to grow and return to pre-pandemic levels.
This trend is supported by the International SOS case data, which shows international travel now at 83% of pre-COVID volumes, but travelers are twice as likely to call for advice or assistance.
Business travel is going to be complex in 2023, and mitigation of many issues is essential. It is, however, encouraging that despite rising costs, experts predict that travel management budgets will increase or stay the same in 2023. This investment will be vital to keeping business travelers safe in the year ahead.
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