From environmental ticking clocks to elongated pandemics and geopolitical escalations, the past four years have provided choppy waters for all. So what has changed in the emerging risk landscape and what’s on the horizon of other global corporations that you should be aware of?
Emerging risk is interwoven with its own intrinsic challenge – the demand for accurate predictions and quantified future risks within a global environment in a permanent state of flux.
While this challenge has always existed, and always will in some form, the last four years have presented an unprecedented task for organisations handling emerging risk in modern times.
Since 2019, what constitutes the most salient emerging risk trends has undertaken a rollercoaster dip and rise movement. COVID arrived and eased to give way for concerns over conflict with Russia and Ukraine. While the war rumbled on, inflation, the cost of living and supply chain disruption arrived to ensnare the concern of global organisations.
Using our new Horizon Scanning Tool, this unique period can be better comprehended. This interactive database collates insights from over 100 annual and global reports to assist risk leaders to identify and analyse over 1,000 emerging risks and trends. Here we present the top trends risk leaders have uncovered using our Horizon Scanning Tool and their potential future impact on organisations.
7 emerging risk trends:
1. Societal issues in flux
There was a marked increase in the average number of mentions and overall ranking of societal issues in annual reports and global reports between 2019 and 2021, before decreasing last year.
During its peak, the major societal trends were around the workforce and health, with a risk focus on remote working - all issues driven by the height of the COVID-19 pandemic. See more about this trend in the workforce evolution section.
The "All Societal trends" table categorises all the mentions of societal risks in the Horizon Scanning Tool into trends, detailing the % of societal mentions that each trend has accounted for over the past four years. The "Risk" table shows the number of specific risks associated with a given trend.
2. Geopolitical tensions mount
Across all political trends, mentions of geopolitical tensions have more than doubled – moving from 24% to 62% in terms of mentions in annual reports and global reports from 2019 to 2023.
The "Top Political trends" spider categorises all the mentions of political risks in the Horizon Scanning Tool into trends, detailing the % of political mentions that each trend has accounted for over the past three years.
While there is always some measure of disputes and conflicts to consider, recent years have seen an especially turbulent time politically.
Tensions between Russia and Ukraine, which have been running since 2014, escalated into armed conflict in 2022. The world’s two major superpowers – the US and China – have experienced frosty exchanges. China is also embroiled in tensions with Taiwan, a matter which further concerns the US and the West overall.
While still a growing data set as more annual and global reports are released, geopolitical tensions are now the major emerging risk trend for data from 2023.
The "Top trends 2023" spider highlights the top twenty trends of reported emerging risks in the Horizon Scanning Tool in 2023 in terms of % of mentions.
Risk Leadership Network's Horizon Scanning Tool, which is continually updated, will continue to paint a picture of how prominent such risks are moving forward.
Stay on top of emerging risk trends with access to our Horizon Scanning Tool
All the data in this article comes from Risk Leadership Network's Horizon Scanning Tool. This interactive database of the emerging risks that other organisations are reporting on will save you time, help you manage your blind spots and enable you to keep on top of trends.
It's available exclusively for members of Risk Leadership Network, but we regularly hold demos for non-members to see more of the tool, and discover the many ways we support our members with their risk priorities.
3. Rapid technological advances
The pace of technological advancement is a trend which has incrementally risen in focus during the last four years, nearly doubling in terms of mentions from 2019 to 2023.
The "Top Technological trends" spider categorises all the mentions of technological risks in the Horizon Scanning Tool into trends, detailing the % of technological mentions that each trend has accounted for over the past 3 years.
Previously, cyber crime, a long-term risk concern for organisations globally, dominated technology-focused trends. While it remains prominent, it now plays second fiddle to the rapid progress of technology at large.
The Horizon Scanning Tool identifies that the pace of technology trend is closely followed by the related trend of the over-reliance on technology, which has annual increases in mentions.
The "All Technological trends" table categorises all the mentions of technological risks in the Horizon Scanning Tool into trends, detailing the % of technological mentions that each trend has accounted for over the past three years.
These findings are potentially revealing. They may suggest that while acknowledging the pace of technology may seem to have a positive curb and present an opportunity, organisations are also wary of becoming too reliant on technology.
These insights may suggest that organisations should be preparing to find a balance between making the most of the efficiencies and advantages of technology, but never losing sight that overreliance has its own pitfalls.
This is perhaps best demonstrated by the specific areas of technology identified within the tool, where artificial intelligence (AI) was the primary focus and topped the tool’s top risks chart for this category.
AI has experienced increased interest in the past 12 months, chiefly driven by the growth of AI chatbot ChatGPT within the wider public domain.
In the world of risk, AI is seen as both an opportunity and a threat. It has utility in producing better risk management, but presents its own risks in how it is used.
Other major risks identified within the tool include autonomous vehicles and machine learning - all which tread a similar line to AI.
What the tool will be well-placed to unveil in the coming months and years is a better understanding of whether such technological advances are a friend or a foe from a risk perspective.
Read our emerging risk guide:
How are businesses managing their blind spots?
4. Regulatory dominance
Universally the biggest trends across the Horizon Scanning Tool’s data was the focus on regulation, with 80% of all 2022 reports mentioning the area.
The "Top trends 2022" spider highlights the top ten trends of reported emerging risks in the Horizon Scanning Tool in 2023 in terms of % of mentions.
Data protection and ESG regulations were the two key risks identified in the regulation space.
5. Physical effects of climate change
While the fight against climate change has been a unifying one across all industries and geographies, it is an area where its language has become more muddled than its aims.
The tool unveils a host of trends linked to the environment, from the implementation of ESG regulations to transitioning to a low-carbon economy.
The most prominent of these aspects is a trend around the physical effects of climate change. Extreme weather, water shortages and floods were identified as the chief risks stemming from the trend.
The "All Environment trends" table categorises all the mentions of environmental risks in the Horizon Scanning Tool into trends, detailing the % of environmental mentions that each trend has accounted for over the past four years. The "Risks related to this topic" table shows the number of specific risks associated with a given trend.
However, the term ‘climate change’ actually witnessed a decrease in activity in 2022-23 compared to the two years prior. Considering the almost universal focus of the area for organisations, what could be causing this?
One explanation is that climate change is a term among many in an area which itself has changed its labeling. What was previously ‘global warming’ gave way to ‘climate change’ as a more common term.
However, other terms, such as ‘sustainability’, ‘environmental’, ‘ESG’ and ‘net-zero’ are also used – sometimes interchangeably – to discuss the future health of the planet.
This insight is relevant to risk leaders as the tool is able to follow this linguistic battle as organisations change and evolve how they define activities broadly associated with the environment.
Free text searches within the tool unveil the evolution of certain environmental terms, allowing risk leaders to better comprehend which of the terms are most frequently touted.
What sometimes complicates risk management is that aims and processes can be aligned, but how they are defined and described vary. This variety can appear across geographies, industries, organisations and even within individual companies.
The Horizon Scanning Tool enables risk teams to not only identify the emerging trends of concern and interest to peers, but also to comprehend the language and categorisation which is taking place.
The "All Environment trends" table categorises all the mentions of environmental risks in the Horizon Scanning Tool into trends, detailing the % of environmental mentions that each trend has accounted for over the past four years. The "Key words" is a wordcloud that showcases the most commonly used words associated with those trends.
The tool unveils diverse categorisation within several topic areas, but by better seeing how terms like ESG and net-zero are dominating the climate change conversations, for example, organisations are in a better place to speak this common language moving forward. This peer validation and blind spot checking ultimately empowers risk leaders to enhance their horizon scanning and get a better grip on the emerging risk trends developing around them.
6. Workforce evolution
The workforce is a topic with limited coverage in 2019, some visibility in 2020, but a major issue in 2021 and 2022.
The "All Societal trends" table categorises all the mentions of societal risks in the Horizon Scanning Tool into trends, detailing the % of societal mentions that each trend has accounted for over the past four years.
Drilling down into the specific risks driving this focus during that period, issues of remote and hybrid working were prominent. This was almost certainly caused by the impacts of the COVID-19 pandemic, where office spaces were closed and employees worked from home.
Despite the reopening of most office spaces today, the management of employees may have changed forever. Many developed a preference for completing their tasks from home, leaving organisations needing a fresh approach to managing staff and any risks associated with working from home.
The home worker was not a COVID anomaly; rather, the start of a working location revolution.
There are other workforce trends unveiled by the tool which indicate a similar transformation in what we can expect moving forward. Skills shortage, attracting/retaining staff, and labour shortages also feature as key societal risks from the data.
This appears to be a cross-industry challenge, as organisations face a future of battling for talent, many of whom will have post-COVID requests on how their time and location is structured.
7. Inflation concerns deepen
In terms of economic aspects, macroeconomics is clear as the major trend from 2020-2022.
The "Top Economic trends" spider breaks down all the mentions of economic risks in the Horizon Scanning Tool into trends, detailing the % of economic mentions that each trend has accounted for over the past 3 years.
However, inflation has nearly doubled in the frequency of mentions in the same period as several geographies battle record rises.
Find out more about our Horizon Scanning Tool