Businesses typically go into a new year thinking about what they can change for things to go better. However, it’s also important to consider things that can go wrong.
What are the biggest global risks that an organization faces as the workforce enters 2024?
Allianz Commercial had “corporate concerns ranked by 3,069 risk management experts across 92 countries and territories” and published the results in the Allianz Risk Barometer 2024, which offers a comprehensive view of top business risks that could be encountered this year.
CEO of Allianz Commercial Petros Papanikolaou stated in the report, “The top risks and major risers in this year’s Allianz Risk Barometer reflect the big issues facing companies around the world right now – digitalization, climate change and an uncertain geopolitical environment. Many of these risks are already hitting home, with extreme weather, ransomware attacks and regional conflicts expected to test the resilience of supply chains and business models further in 2024.”
A standout point in the report is the persistent concern over climate change, which ranked seventh in global business risks. However, in countries like Brazil, Greece, Italy, Turkey, and Mexico, climate change was listed among the top three business risks. Physical damage to corporate assets due to extreme weather events and the challenges associated with transitioning to low-carbon technologies are factors that contributed to this concern. This trend also highlights the need for businesses to invest in sustainable practices and adapt to emerging environmental risks.
Political risks and violence, intensified by ongoing conflicts and geopolitical tensions are ranked as number eight. The year 2024, being a super-election year with significant global electoral activities, adds to these heightened concerns. The potential for increased societal polarization and social unrest is a major concern for global businesses, according to the report.
Allianz’s data also sheds light on the global economic conditions. While macroeconomic developments, which ranked fifth on the list, indicate a potential stabilization in the post-pandemic economy, it’s reported that the global economic growth outlook remains modest. Ludovic Subran, Chief Economist at Allianz, points out that this subdued growth could help in managing high inflation rates, but it also limits fiscal policy. The numerous elections in 2024 add to this uncertainty, potentially paving the way for further economic shifts this year.
- The top 10 global business risks for 2024 were:
- Cyber Incidents (36%)
- Business Interruption (31%)
- Natural Catastrophes (26%)
- Changes in legislation and regulation (19%)
- Macroeconomic developments (19%)
- Fire, explosion (19%)
- Climate Change (18%)
- Political Risks and Violence (14%)
- Market Developments (13%)
- Shortage of Skilled Workforce (12%)
A notable insight from the report is the challenge of workforce shortages. Ranked tenth on the list, the shortage of skilled workers particularly in IT and data sectors, remains a significant concern — especially in regions like Central and Eastern Europe, the U.K., and Australia. This trend coincides with the growing gap between job vacancies and available talent. The data also suggests that there is a need for businesses to invest in skill development and talent acquisition strategies this year.
