The Biggest Risks of 2021: A Look Back
Events of recent years have shown us, starkly, that there are many risks to global civilization which we have not fully appreciated. To many of us, the world feels as though it occupies a more precarious position than it ever has before. Many of these challenges have been exposed to us by sheer fluke, but whatever the case, the important thing now is how we rise to meet them.
The diversity of issues we face is hard to deny, and 2021 and the coming years in particular, will define our future. We must begin by looking at each of those problems in the face. Let us take a look at some of the biggest risks we face in the coming years and decades, and how they have manifested in recent years.
1. Shipping Risk and The Suez Canal Disaster
Global shipping is the backbone of the international supply chain, and the disruption of any part of it can have a disastrous domino effect. Across the world, on any given day, there are around 60,000 large cargo vessels carrying almost a million professional seafarers active on the sea. The impact of the Covid-19 pandemic has meant that only 25% of normal crew changes took place between March and August of 2020.
The disaster in the Suez Canal, in which the Ever-Given container ship ran aground and caused the canal to be blocked for almost a week, exposed the problems of our overreliance on shipping. Billions in trade revenue were lost, and the effects on the global supply chain were enormous. How we address these problems will play a big role in the coming decades. Were this to happen again, no doubt this will change the way we live.
2. Ransomware Attacks
Even as we move to make our digital presence more secure with every passing day, cybercriminals watch from the sidelines and move to counter these measures. In 2020, ransomware attacks increased 300% over the previous year, a frankly staggering increase.
Ransomware attacks involve remotely blocking access to a network until a ransom is paid. Cryptocurrency, Bitcoin, in particular, have unfortunately become very useful tools for these sorts of attacks. In the U.S., for example, ransomware payments equaled around $350 million USD in 2020.
2021 saw some of the most high-profile ransomware attacks of recent years. Hackers demanded $70 million in Bitcoin from Kaseya, an IT solutions company, in July in an attack that impacted around 1,500 companies. JBS paid an $11 million ransom in May after their network was compromised. The fact is these ransoms all too often leave no choice to the victim but to pay.
3. Climate Risk
For many years there has been a conversation surrounding the climate crisis, but whereas once it was distant, imagined part of our future that might impact future generations, now it stares us directly in the face.
The greatest global risk we face with the changing climate is the displacement of millions, potentially billions, of people. 2015 to 2021 is predicted to be the seven warmest years on record. This is going to result in a huge number of environmental changes which will leave people with no choice but to migrate elsewhere.
The rate at which the sea level has been rising, for instance, increased by a factor of two from 2013 to 2021 as compared with 1993 and 2002. This will cause coastal areas to become flooded and uninhabitable.
Extreme weather events pose a deadly threat, too. Between June and July in 2020, heatwaves across North America broke weather station records by as much as 6°C and caused hundreds of deaths.
4. ESG Challenges
What we may fail to recognize, to our own detriment, is the way that each of these seemingly diverse factors is so intricately bound up with one another. ESG refers to environmental, social, and governance challenges. Environmental challenges we have looked at, but when people are displaced by environmental disaster, this becomes a social issue.
The Covid-19 pandemic also is a social issue, given the disparity in access to health care across the world. Without equal access to treatment, and indeed to vaccines, the pandemic will have vastly different effects at different social levels.
Diversity, equality, and racial justice are all going to play a huge part in the policy-making of both governments and private firms in the coming years, and ignoring them is one of the biggest risk management issues we face. Without recognizing how climate change and the pandemic affect people differently, we can never hope to truly address the problems.
5. Digital Transformation
Our civilization’s digital transformation has been no secret and is by no means confined to the last few years, but the fact is that the speed of this transformation has been increased many, many times by the impact of the pandemic.
In general terms, what we are seeing is a major shift to a remote workforce. Tools are being put in place to support a distributed workforce. The automation of financial processes, for example, in order to allow workers to focus on initiatives that will move them forward.
The face of cybersecurity will need to change, too. Whether it is driven by artificial intelligence or some other means, without central servers or networks housed in offices, workers will need to be relied on more heavily to protect their data. Intelligent security technology has helped hugely to mitigate insider breaches.
Digital transformation is an unstoppable force that marches advancement onwards no matter what we do, but we nonetheless must bring it to bear where it is most needed: mitigating our digital risk.
No one would deny the truly grave position we are in, and the monumental risks we face going forward. The challenges are enormous, and it is going to take no less than international cooperation on a scale hitherto unknown to meet them. But just as the risks we face grow and multiply before our eyes, so too does our ability to create ingenious solutions.