Blog: The 2025 Global Risks Report
Olga Murray discusses the 2025 WEF Global Risk Report and strategies that can help companies build resilience.
21st January 2025
by Olga Murray
Olga Murray is a specialist climate and ESG advisor to board directors and law firms around the world. She is the Founder of Private Goodness which trains executives and lawyers, wins International CSR Excellence Awards, and delivers Innovate-UK funded projects.
This blog discusses what we can learn from the 2025 World Economic Forum annual report on Global Risks and strategies that can help companies build resilience.
Last week the World Economic Forum released its annual Global Risks Report which explores the key risks facing the world over the next decade. The report brings together the collective intelligence of over 900 global leaders across business, government, academia and civil society, as well as 100 thematic experts and risk specialists.
The report concludes most severe risks over the next two years are misinformation and disinformation, extreme weather events, state-based armed conflict and societal polarisation.
While over the ten years, the top four severe risks are all environment-related: extreme weather events, biodiversity loss and ecosystem collapse, critical change to Earth systems, and natural resource shortages.
Reference: Global Risks Report 2025, Figure C, page 8
Environment
The report begins with a stark and concerning assessment: 2024 saw six of the nine “planetary boundaries” for environmental health crossed, with a seventh boundary in jeopardy.(1) These boundaries are critical in maintaining the stability of the world’s life support system, including our economies and societies.
Climate change is an underlying driver of several other risks that rank highly, for example, involuntary migration or displacement.
While pollution doesn't dominate the news cycle, it is the world’s largest environmental risk factor for disease and premature deaths. Its impacts are unequal, with 92% of pollution-related deaths and the greatest burden of related economic losses occurring in low- and middle-income countries.(2)
State-based armed conflict
Global Risks Reports examine not only the direct impacts of risks - such as humanitarian crises caused by conflict, which can escalate into further conflict and devastation - but also the effects of how those risks are perceived.
Compared with last year, the risk of 'state-based armed conflict' has climbed from number 8 to number 1 in the rankings for 2025, and sits third for 2027.
“Perceived or actual threats from other countries also provide an opening for governments to seize control of narratives and suppress information, perhaps blurring the lines between genuine security considerations and political expedience.
These are all conditions that will help authoritarian regimes consolidate their power and may lead to democratic regimes taking on more authoritarian characteristics.”
World military expenditure increased for the ninth consecutive year in 2023, reaching a total of $2.4 trillion, with 2023 seeing a steep rise over 2022. At the same time, there is a declining investment in humanitarian aid and the size of the UN peacekeeping operations has been reduced from over 100,000 peacekeepers in 2016 to around 68,000 in 2024.(3)
The new U.S. administration will play a significant role in shaping events over the next few years. Additionally, we will observe whether tariff-based protectionism might result in a decline in global trade.
Misinformation
The top risk in 2027 is deemed to be misinformation and disinformation. It's increasingly difficult to tell what's true and what isn't, what is AI- and what is human-generated. The report also discusses algorithmic bias:
“Sometimes, the bias can be obvious. For example, in a hiring process, a set of bios used as examples of good candidates might be drawn from a pool of previous candidates, all of whom might have the same gender, race or nationality.
The personal biases of individuals designing the assumptions of the model can also play a role in leading to unjust outcomes”
Inequality and Societal polarisation
“This is an important pair of risks to watch, given how related they can be to bouts of social instability, and in turn to domestic political and to geostrategic volatility.”
This year the Global Risks Report focuses on demographic trends and pensions crises and labour shortages that can follow.
“Globally, the number of people aged 65 and older is expected to increase by 36%, from 857 million in 2025 to 1.2 billion in 2035.(4)”
Sub-Saharan Africa is home to many countries with youthful demographics but according to the International Labour Organisation, 72% of young adult workers (aged 25 to 29) in the region are engaged in forms of employment classified as “insecure”.(6)
One of the key challenges in the coming decade will be to generate enough good and secure employment.
Corporate Resilience Strategies
Although there are numerous risks on the horizon, companies can take proactive steps to safeguard their future. Here are the top five strategies businesses can implement to effectively prepare for the challenges ahead.
Diversify supply chains
Even with insights from the world’s leading risk experts, unexpected events still occur. To prepare for these uncertainties, companies should test and diversify their supply chains. Incorporate worst-case scenario planning to address the various risks outlined in this blog, ensuring resilience against disruptions.
2. Accelerate your company's green transition
Climate-related risks are expected to dominate the coming decade. Companies must accelerate their transition to greener practices, not only to meet environmental goals but also to help their communities and clients adapt to future climate-related challenges. Proactively integrating sustainability into your business strategy will be key to long-term resilience.
3. Enhance flexible work policies
To support a diverse and adaptive workforce, companies should expand their flexible work policies, offering options for employees to leave and rejoin the workforce at different life stages.
In addition, organisations can prioritise building cross-generational teams and investing in skill development to create a dynamic and inclusive work environment.
4. Boost digital literacy
Digital literacy is essential for employees to critically evaluate data, recognise misinformation and make informed decisions. Companies should invest in training programs that enhance these skills, enabling employees to navigate the increasingly complex digital landscape with confidence.
5. Forster collaboration and trust
The report emphasises that "by deepening honest dialogue and acting urgently to mitigate the risks that lie ahead, we can rebuild trust and together create stronger, more resilient economies and societies."
Final Words
This statement from last year’s report remains very relevant:
“The future is not fixed. A multiplicity of different futures is conceivable over the next decade. Although this drives uncertainty in the short term, it also allows room for hope.
Alongside global risks and the era-defining changes underway lie unique opportunities to rebuild trust, optimism and resilience in our institutions and societies.”
In spite of the many challenges the world is confronting, this analysis urges us not to give up, but to redouble our efforts in building a better future.
(1) Potsdam Institute for Climate Impact Research, Planetary Boundaries – defining a safe operating space for humanity, https://www.pik-potsdam.de/en/output/infodesk/planetary-boundaries.
(2) Fuller, Richard, Philip J Landrigan, Kalpana Balakrishnan, et al., “Pollution and health: a progress update”, The Lancet Planet Health, vol. 6, 2022, pp. e535-e547, https://www.thelancet.com/pdfs/journals/lanplh/ PIIS2542-5196(22)00090-0. pdf.
(3) United Nations Peacekeeping Operations, Global Peacekeeping Data, 31 August 2024, https://peacekeeping.un.org/en/ data.
(4) United Nations Department of Economic and Social Affairs, Population Division, World Population Prospects, 2024, https://population.un.org/wpp/.
(5) International Labour Organization (ILO), Global Employment Trends for Youth 2024: Sub-Saharan Africa, August 2024, https://www.ilo.org/sites/default/files/2024-08/Sub-Saharan%20Africa%20GET%20Youth%202024_0.pdf.
(6) International Monetary Fund (IMF), Regional Economic Outlook – Sub-Saharan Africa, April 2024, https://www.imf.org/en/ Publications/REO/SSA/Issues/2024/04/19/regional-economic-outlook-for-sub-saharan-africa-april-2024.
*This blog is kindly reproduced with the permission of Olga Murray, Founder of Private Goodness
Blog: why aren’t more people talking about the Scottish Child Payment?
The Scottish Child Payment - what is it and why aren’t more people talking about it? Liz Ditchburn CB examines this bold policy intervention with cross-party backing that targets child poverty and its long-term consequences.
18th September 2023
by Liz Ditchburn
The Scottish Child Payment is a bold policy intervention with cross-party backing targeting child poverty and its long-term consequences. This blog aims to stimulate discussion about this Scottish policy innovation and calls for investment and action to ensure we learn from its implementation, generating evidence about what works that will be useful in Scotland, the rest of the UK and beyond.
About the Author
Liz Ditchburn CB has more than three decades of experience in the UK civil service and devolved administrations in both domestic and international settings. Most recently, she was Director General for Economy for the Scottish Government, leading on all aspects of the economy and the drive towards net zero in Scotland. Although at the Scottish Government during the development of the Scottish Child Payment she has not worked on the policy itself.
Previously, she was the Department for International Development’s (now Foreign, Commonwealth and Development Office) Policy Director and its first Value for Money Director. Across her executive career she has worked to integrate economic, social and environmental change to secure better outcomes for people, place and planet. Liz is now an Honorary Professor at the University of Glasgow, a Non-Executive Director of the Net Zero Technology Centre and a Trustee of NESTA.
I’ve lost track of the number of times I’ve mentioned the Scottish Child Payment to colleagues and friends based elsewhere in the UK (even some involved in public policy work) and been told they’ve never heard of it. The next reaction when I describe the level and scale of this initiative, is “Wow! That’s big!”. It is indeed.
For those unfamiliar with this new payment to low income families in Scotland (broadly those in receipt of Universal Credit or similar), here are some headlines and a brief timeline:
First payments began in February 2021 at the rate of £10 a week for each child under 6.
Doubling of the payment to £20 a week per child was announced in November 2021 with payments at that level starting from April 2022. (In advance of the expected extension of the eligibility to under 16s, a system of bridging payments was put in place for children between 6 and 16 – in effect advancing the formal roll out)
Payment increased to £25 a week per child and eligibility was formally extended to under 16s in November 2022.
What makes the Scottish Child Payment remarkable and worthy of more debate inside and outside Scotland? And why does it matter beyond Scotland?
Firstly, impact for individuals: the numbers above bear repeating. If you are a low income family in Scotland, on top of UK child benefit and any other benefit, you can receive £25 per week for each child under 16. There are no limits to the number of children an eligible family can claim for. To get a sense of impact for a typical family, a family with 3 children will receive £3,900 a year. That’s a significant addition to a low income household. And it’s each year and every year, not a one-off boost. At a societal level, modelling puts the impact on child poverty rates at a reduction of around 5%
Secondly, coverage: when the payment began in 2021, Social Security Scotland estimated it was being paid for 106,000 children. With the extension to under 16s, around four times more children could be covered. The Scottish Fiscal Commission (SFC) produced costings estimates when the extension to the scheme was proposed, calculating that around 41% of under 6s and 48% of over 6s would be eligible. This translates roughly into an estimated 400,000 children being eligible (with actual coverage dependent on uptake). The latest statistics just published by Social Security Scotland show payments are being made in respect of just over 316,000 children.
Thirdly, scale: this is a fiscal anti-poverty intervention at scale, not a small tweak at the margins. Earlier this year, the Institute of Fiscal Studies produced some budget analysis for the Scottish Parliament during budget deliberations showing that tax and benefit changes are in effect a significant transfer from richer households to poorer households with children. Graphics in their published paper, analysis of Scottish tax and benefit reforms, are well worth a look.
Fourthly, cost. The SFC costed the Scottish Child Payment for 2023/24 at £405m. The recent actual figures for Q1 23/24 published by the Scottish Government confirm this scale with £104.1m spent in the quarter. To help put these figures into context for readers elsewhere in the UK, a very rough guide is to multiply by 10 to get an idea of an equivalent whole of UK scale – so such an initiative covering all the UK might be in the order of £4.2bn.
Fifthly, political consensus and societal attitudes: both the introduction of the Scottish Child Payment and its increase to £25 per week per child has been marked by a pretty strong level of political and cross-party consensus. Indeed, some of the challenge that the Scottish Government received (and still receives) in debates was along the lines of why not go further, faster, why not increase the rate beyond £25? That there is consensus around the idea that child poverty is a bad thing is not surprising; that there is agreement that direct cash transfers to families are an important part of the answer and affordable is more remarkable.
Sixthly, the tone of the debate: coverage and discussion around the payment have been mercifully free of language around “handouts” or whether people are “deserving” or not. When cash transfers first began to be adopted in an international aid setting, concerns about whether poor people could be trusted to do sensible things with cash were never far away. The evidence since has shown pretty consistently that given cash, people in poverty use it well. (The Overseas Development Institute (ODI) has published a great review of the evidence around cash transfers, Cash transfers: what does the evidence say? | ODI: Think change.
What do we know so far about the impact of the Scottish Child Payment – does the evidence suggest that it is going to have the impacts the Scottish Government expects?
The diagram below shows the short, medium and long term changes that the designers of this policy are looking for – the “logic model”.
The only published evaluation I’ve seen so far (please send links to any others if you know of them) is from March 2022: the interim evaluation published by the Scottish Government. It was conducted early in the life of the Scottish Child Payment and therefore necessarily focused on the immediate and short-term outcomes, and critically, refers to the period when the payment level was at £10. Nevertheless, it provides some interesting glimpses and areas for deeper exploration.
There was broadly positive evidence supporting some of the short-term outcomes: reduced money-related stress, increased child-related spend, children able to participate in social and educational opportunities and reduced pressure on household finances, with less clear evidence for an improved position of main carers within households. The findings on children’s opportunities and stress are really interesting. Finding out whether and how cash transfers can support better learning outcomes for children rather than just having a direct impact on material poverty is one of the big questions for cash transfers policies. And we know that persistent stress can have a pervasive impact on long-term health.
These two quotes in the interim evaluation are compelling and provide a glimpse as to how this might be impacting:
“[Scottish Child Payment] did lessen my worries quite a lot to be honest. Money's the one thing I'm always stressing about, always thinking about, always worrying about. It was a relief to have that extra boost. (Parent 22, age 18-24, care-experienced, 3+ children)
[Scottish Child Payment helps with] not having to stress out because you know it’s coming. When I get stressed, I don’t sleep. I don’t deal well with stress. I don’t want the kids to see me stressed. (Parent 18, age 25-34, single parent)”
Will these findings still hold at the higher level of £25, under the changed economic context and even sharper cost of living challenges?
The interim evaluation includes lots of detail around the application process and uptake. As a “passported” benefit (that is one that you’re entitled to because you already receive another benefit), applications should be more straightforward and administratively less costly than standalone benefits.
However, this also brings with it often complex interactions with other parts of the tax and benefit system and a particular challenge for policy makers when different parts of the tax and benefits system are owned and delivered by different governments; understanding the implications of these interactions – the potential for cliff edges or disincentives to employment for example – will be important.
Currently, Scotland is the only part of the UK with this system. For policy makers, differentiation of policy creates a precious opportunity to find out what works, to learn from the experience of implementation and to better understand how best to create the changes we want. There are other ways to learn of course as well. Randomized Controlled Trials (RCT) are often seen as the gold standard.
NESTA (full disclosure, I am a Trustee) is considering the value of RCTs in this area and also keen to look at what we can learn from Scotland Welfare reimagined: could cash transfers combat child poverty? | Nesta.
We only learn if we invest explicitly in learning - putting in place the impact evaluations, gathering the data, quantitative and qualitative, listening to the stories, testing out our assumptions, doing high quality research. Few policies work in practice exactly as we intended at the design stage – and sometimes they don’t work at all to produce the change expected. They can evolve and improve based on experience.
At a recent event in Edinburgh, Prof Danny Dorling described the Scottish Child Payment as the single policy intervention that has created the largest fall in child poverty anywhere in Europe for at least 40 years.
Impartiality runs deep in the soul of a longtime civil servant so I am not writing this paper as an advocate of the Scottish Child Payment, important though it will be to the many thousands who receive it, but as a call for us all to invest in learning about what works in tackling child poverty and inequality and to debate these issues throughout the UK with evidence, humility and an open mind.
Ends
Why is DHI thinking about the Scottish Child Payment?
We heard at our recent event with Professor Danny Dorling about how rising poverty and inequality is shattering our nation. We know from our Understanding Scotland Economy Tracker that at least 1 in 4 people are consistently affected by financial stress which is affecting their sleep and nutrition.
Beyond heart-breaking individual stories, poverty results in significant intergenerational consequences for the labour market and public spending especially through long term health conditions. As pressures rise on public spending, this is the biggest move yet by the Scottish Government to get up-stream and move towards a preventative agenda as laid out by the Christie Commission.
Image credit: sharing thumbnail image - Photo by Natasha Ivanchikhina free on Unsplash 18/09/2023
Press release: Global expert calls for urgent change to prevent escalating crises in the UK
Professor Danny Dorling, from the University of Oxford, joined a sell-out crowd in Edinburgh to preview his latest book ‘Shattered Nation. Inequality and the Geography of a Failing State”’
Professor Danny Dorling, the Halford Mackinder Professor at the University of Oxford, joined a sell-out crowd in Edinburgh to preview his latest book Shattered Nation. Inequality and the Geography of a Failing State' hosted by the David Hume Institute.
Professor Dorling argued, Britain needs change on a scale not seen since the Second World War to prevent the escalating economic and social costs of avoidable crises:
““The enormity of the challenges we now face, mean we need a scale of intervention not seen since the second world war - we can choose to step up to the challenges ahead, we can choose to create a thriving economy and society that does not leave people on the scrap heap, or we can blunder on fooling ourselves that if we just get economic growth to increase all the other crises will be sorted.””
Photo credit: Susan Murray
The discussion addressed the key theme of his forthcoming book - that the failure to tackle rising inequality and to invest in ways of meeting the basic needs of people living in the UK puts Britain at risk of becoming a failed state.
Dorling named Scotland as a source of hope citing policies such as the Scottish Child Payment and the announcement by the Scottish Government’s intention to move to a “Cash First” approach to reducing dependence on food banks.
““People need to know how much they stand to lose if we do not plan for ambitious change. After housing costs are paid, the average household in Britain is already less prosperous than the median in every other large European country. We have been moving down the ranks for decades, and the fall has accelerated recently. This is not inevitable. We can plan to end the huge inequalities that are a key feature of this decline.”
“What is happening in Scotland shows it is possible to avoid a poverty of ambition where you hope for so little and ask for even less.””
Reflecting on the ambitions of the 1942 Beveridge Report, Professor Dorling identifies the five giants of twenty-first-century poverty that now need to be conquered: Hunger, Precarity, Waste, Exploitation, and Fear.
Susan Murray, Director of the David Hume Institute, said:
“We were delighted to host Professor Dorling whose analysis of the data shows what can be changed, not just what has gone wrong. We know from our quarterly Understanding Scotland Economy Tracker that significant numbers of the Scottish population are losing sleep over their finances and cutting back on the basics such as healthy food and heating. Our ability to achieve many goals, including increased productivity, is placed in jeopardy when the people who power our economy are struggling to afford the basics needed for life today.”
ENDS
View the full David Hume Institute event recording with Professor Dorling
Notes to editors:
Shattered Nation: Inequality and the Geography of a Failing State by Professor Danny Dorling will be published by Verso Books and formally launched on 19 September 2023.
Image credit: Sharing thumbnail image photo taken by Roger Bradshaw free on Unsplash on 24.08.2023