Comment - Why the Global Risks Report Matters to You
The latest edition of the Global Risks Report may seem far removed from the world of selling drinks, or food, but it raises some difficult challenges for the sector.
Every year, the World Economic Forum releases its report on all the ways the world may end and how likely they are to happen. For dramatists, it's pure gold.
Indeed, it would be easy to dismiss the 2012 report, released today (11 January), as another nugget of speculative hyperbole. To do that, though, one would have to ignore that many of the main risks highlighted by the report could impact strongly on so-called emerging markets in general, and on food and drink specifically.
For example, water supply crises, food shortages, "extreme volatility in energy and agriculture prices" and rising greenhouse gas emissions are four of the most pressing challenges the world faces in 2012, according to the new report. Others include severe income disparity, which is the report's top concern for the year ahead, and - obvious I suppose - global financial crisis.
There is nothing particularly new about these challenges, but what is new in the 2012 report is their increased potential to cause disruption to governments and businesses. And, this is no lightweight document: it is produced in collaboration with Marsh & McLennan, SwissRe, Wharton Center for Risk Management, the University of Pennsylvania and Zurich Financial Services.
Of the main societal challenges expected over the next ten years, the report flags food and water as key. "Water supply crisis has the highest impact and highest likelihood, with food shortage crisis following closely behind," it says.
There are several follow-on risks to businesses, particularly for those operating in emerging markets, which face the brunt of the risk. Even greater volatility in commodity prices, possible rationing of resources and even potential lawsuits against companies may lie in wait.
If I'm honest, it all seems very distant and detached, which is another risk in itself. I'm not joining the alarmists, but reports like this are important in forcing companies and governments to think about what they specifically mean by that woolly old phrase 'sustainability'. It will siphon the winners from the losers.
To read the report, click here.
In March, just-drinks will produce an entire Management Briefing dedicated to sustainability.
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