Global Risks Report 2025: Is Your Company Ready for the Future?

Risk management and seizing opportunities are key responsibilities of board directors. On 7 May 2025, Climate Governance Initiative presented key findings from the World Economic Forum's Global Risks Report 2025 and their implications for boardroom decision-making. The webinar explored findings from both short- and long-term perspectives, with 5 of the top 10 ten-year risks being environmental. Board directors discussed the results of the report and how these insights will impact strategic planning to ensure the long-term sustainability of their companies.

 

»It is essential for all organisations to take the risk landscape seriously, to understand it and then to use that as a platform for figuring out what are the solutions and what are the ways forward,« emphasized Mark Elsner, Head of Global Risks Initiative at the World Economic Forum.

Key Takeaways for Board Directors

  1. Adopting a long-term risk perspective: Board directors are often effective at addressing short-term challenges but must also pay equal attention to long-term strategic risks. A reactive approach that waits for events to unfold is not sufficient – proactive oversight and foresight are necessary to increase resilience and create long-term value.
  2. Understanding your operating environment: Risks are not always immediately visible. If their impact on business operations isn’t obvious, it indicates a need for deeper analysis. Boards must ensure that executive leadership thoroughly assesses the broader business environment, only with this understanding can meaningful, long-term strategies be developed.

»I have two key messages that I think board members and executives should have in mind. The first is we have to deal with the circumstances that we have, not the ones that we would like. We have to fully understand context: we’re moving away from globalisation to fragmentation and also living in very noisy times, so I think we need to be realistic about this. The second is the only way to cope with fragmentation is promoting a shared vision at all levels. We need business strategies that align individual interests with the common good,« said Alejandro Díaz de León, Executive Director of Grupo Bal.

How Can Boards Effectively Address Risk?

Aligning short-term results with long-term vision:
Effective governance requires aligning short-term performance indicators with long-term strategic objectives. Specific topics – such as risk, audit, and sustainability – should be addressed by specialized committees to enable deeper analysis and better recommendations for the board. It’s crucial that boards focus on the intersection of short-term goals and long-term direction.

Implementing scenario planning:
Companies should cultivate a culture of scenario-based thinking. Preparing for extreme but plausible events – such as geopolitical shocks or systemic breakdowns – strengthens psychological readiness and strategic flexibility. Regular exposure to such scenarios improves uncertainty management and can even become a source of competitive advantage.

Defining purpose and aligning goals:
A clearly defined company purpose that links business performance with societal benefit is essential for stakeholder alignment and reducing internal fragmentation. This alignment enhances strategic clarity and stakeholder trust.

»There are so many issues on the table, but it's also the speed of these issues. And if you haven't really adjusted your long-term vision, it's much harder to have something to hold onto and it's much easier to react to what's coming. Most boards can do better on spending a bit more time on the longer perspectives, more support for management on the shortest perspectives and actually help with clarifying the direction,« stressed Liselotte Engstam, Chair at Boards Impact Forum.

Global Risks – Key Insights from the Report

  • The world is becoming increasingly fragmented and polarized. Both short-term (2025–2027) and long-term (2035) projections show growing pessimism. Continued volatility and increasing fragmentation of global systems are expected.
  • Inequality stands out as the most interconnected global risk. Addressing it could help mitigate many other systemic threats, highlighting the importance of holistic business strategies.
  • Short-term risks (2025–2027): Dominated by geopolitical tensions and conflicts. By 2027, social risks become more prominent, particularly the spread of disinformation and manipulation of information.
  • Long-term risks (2035): Environmental threats take center stage, especially extreme weather events and biodiversity loss.
  • Although geopolitical dynamics have shifted in recent months, the report emphasizes that long-term risk assessments remain reliable. The consistency of findings over time further confirms the credibility of long-term projections.
Read the full Global Risks Report 2025

Source: Climate Governance Initiative. Global Risks Report 2025: Is your business future proof?