Top global risks in 2026 and how the Davos 'spirit of dialogue' can help us face them

Welcome to Radio Davos, the podcast from the World Economic Forum that looks at the biggest challenges and how we might solve them. I'm Gail Markovitz. This week, with the annual meeting in Davos just days away, we are asking, what are the biggest risks facing the world in 2026 and beyond? The World Economic Forum has just published its annual Global Risks Report, which seeks to answer that very question. And to help me dig into that, I am joined by my co-host, Sardir Zahidi, who is managing director at the World Economic Forum. Sardir, how are you today? I'm very good. Great to be with you. Can you give us a little bit of background on the Global Risks Initiative and what that is and how we can pile the data for this report? What we're really trying to do is pull together leaders from across business, government, civil society, academia and international organisations and take that multi-stakeholder review to understand where do different Global Risks stand? What is their priority order relative to each other? But also how their severity scores might be increasing or decreasing in three different timeframes. This particular year, two years from now and ten years from now. And we've surveyed over 1,300 business leaders, academics and experts to try to understand what is happening with Global Risks. And then we've married that up with a series of consultations with some of those top experts over 100 both inside the forum and outside the forum. And what is the main headline this year? So we find that of course in the very short term and this is probably no surprise to our audience, but in the very short term, due economic confrontation and state-based armed conflict are the two things that readers are extremely worried about in 2026. And then you look two years out and due economic confrontation actually stays at the very top, but it's followed closely by misunderstanding information and then societal polarization. And then in the longer term in that 10-year outlook, that is where the environmental risks are again at the very top extreme weather, biodiversity loss and critical changes to Earth systems. But following pretty closely behind is again misunderstanding information and one of the largest rises which is around the potential adverse outcomes of AI technologies. I'd like to bring in two experts that we've got joining us today. Let's meet our guests. We have Andrew George who is from Marsh Risk and Peter Geiger who is from Zero Insurance Group. Welcome. Before we dig into the specific risks, I thought it would be good to just talk a little bit about the global outlook. Are we pessimistic? Are we optimistic? What is the feeling? What is the vibe for this coming year? Well because it is the global risks that look, I think it would be hard to describe it ever as being overly optimistic. But what we do try to do is get people to say, what do they generally think will be the outlook for the world in the next two years and then in the next 10 years? And what we find is that in the two-year period, 50% of the experts that we surveyed are expecting the world to be somewhat turbulent or stormy. About 40% are expecting things to be unstable but perhaps manageable. And then when it comes to the rest, that's about 10% of people that expect things to be either completely calm or somewhat stable. So it is of course quite a pessimistic outlook and then it gets more pessimistic when you look 10 years out in the sense that 57% of these experts find that things will be stormy or turbulent and the set of people that are expecting things to be somewhat manageable but unstable actually decreases and the share of people that expect things to be calm or stable actually stays roughly the same. One percent expect things to become and about 9 or 10% in the two-in-ten-year time frame expect things to be somewhat stable. So overall we are looking at a lot of concerns and I think it's not surprising because so many different types of risks across the fibrous categories we look at are actually happening and unfolding at the same time. Can you just run through the five risk categories? Yeah so we look at societal risks, economic risks, technological risks, geopolitical risks and environmental risks and we look at about 33 different risks within those five categories and try to get people to assess where they are overall in terms of severity and relative to each other. One of the things that came out of the report is that we are in an age of competition. What does that mean exactly? So I think we can see that the multilateral order that has been keeping the world moving forward and creating progress and managing global cooperation is something that is starting to fray that's starting to come under pressure and there are major powers as well as middle powers that are starting to compete with each other when it comes to resources, technologies and that's really what we're seeing playing out as underlying a lot of the risks that we're seeing this year and so we describe that as a potential age of cooperation and I think I add the word potential to be very clear that none of these are predictions. These are essentially perceptions of where these risks might be headed. So it's not a foregone conclusion absolutely if anything by calling it out as a risk we are some way to mitigating it. That's very much the purpose of the risks initiative as a whole to try to get people to look at some of these risks call out where the problems might be so that we can actually begin preparedness. Today begin to focus much more on resilience and of course begin to focus on cooperation where it is possible to mitigate these risks. I'd like to bring in Peter if I may. From your perspective do you agree that we're at we've entered an age of competition and are the rules of the game completely different now and what does that mean for businesses and for insurance? I mean age of competition we've seen system competition before. I think humans are very good in forgetting the past. It's not so long ago that we had two systems competing globally until capitalism basically got the better end of it. So I think we see a return of a systems competition and what does it mean for business? I mean it means that we're living in a world that is multi-parallel where kind of the political actors kind of pursue their own agendas which can be good or bad for business because change is always opportunity. It offers new opportunities while other doors may be closing. What does it mean for insurance? Look we're not playing at that level we're not ensuring states so most of these geopolitical risks are basically not in the insurance space. A world that is perceived as less certain obviously we would see as a business opportunity because people buy insurance if they think uncertainty is real. Andrew from your perspective how are businesses navigating this? I think geopolitical muscle is one of the things that businesses are now having to really tone should we say. Would you agree? Yes I think you know there's no doubt there's there's examples of the challenge. US tariffs be the highest rates since so the 1930s. Also other issues that we shouldn't forget was perhaps drop down the list of extreme weather are other things and so what what companies are doing is really saying we need more tools and we need to have more data to generate more insights to to understand these these situations as the landscape unfolds as things become more competitive companies are using those data and insights and a lot of it is using the emerging AI tools so we for example have our own supply chain AI tool and companies are saying well if we can model the risk and understand the risk whilst it's evolving and it's changing then we have an ability to manage it effectively better data enables us to lead to better outcomes and that's whether they're managing their own business or whether they use insurance market who are very good at when you can model a risk taking that risk and dealing with it so so companies are really leaning in to how they manage this ever-evolving landscape. If we dig into geoeconomic confrontation it's something that we kind of rattle off as a term because we're used to it and we've lived and breathed this report but what exactly does that mean geoeconomic confrontation. So I think there are multiple elements of this one element which is very front and center these days is of course higher tariffs and while tariffs have generally ended up being a little bit lower than they were originally expected to be when announced by the US government earlier last year they are still higher than they were before and so there is some concern around that and I think that's very clearly why this risk has shot up to the very top of the rankings both for this year and two years out but in addition to that there's also concerns around what that means for investment screening what that means for for indirect investment what that means to some extent for development right so there are many smaller economies that very much rely on global economic cooperation and they're much more concerned about this kind of competition when it comes to trade and investment and for them this has been one of their key growth policies and I think theirs now starting to see how exactly is it that they think about their growth in a world that is competing a lot more and where geoeconomic warfare if you will has become a key part of the feature of the global economy. How does it differ from what we had last year which I think was one of the top risks which was geopolitical recession how has that what what have we seen what's the the journey been. So I think we're actually seeing a continuation we didn't quite see geoeconomic recession or geopolitical recession as a specific risk we were just describing what is starting to happen overall so we've you know certainly for for some time since the pandemic there has been concern about an economic recession and I think this was more a description of starting to see a geopolitical recession recession and to some extent we're seeing a continuation of those trends but I think and this is where you know the flip side of the the risks report we shouldn't underestimate where there is still continued economic cooperation where maybe the multilateral system is not working in the way that it initially was but you are starting to see cooperation between larger powers as well on certain areas there are continue to be for example regional trade agreements. So I think it's important to just bear in mind that there's also the other side of this which is leading to greater cooperation among certain states. And the markets have been pretty resilient. So I'm interested that this is a top concern that economic worries arising. Yeah so economic concerns have actually been among those that have been rising the most relative to previous ranking so risks such as inflation have gone up risks such as the concerns around an asset bubble have gone up and again this is in part because of the valuations for example in technology firms and some potential concerns around that but there's also a concern about what happens in terms of the knock-on effects of tariffs. We haven't necessarily seen that lead to higher inflation over this last year but will that change over the coming year as some of those stocks start to deplete and you actually start to see the costs of those higher tariffs being passed on to consumers. So those are some of the key concerns we're seeing on the economic front. Peter are you concerned about the macroeconomic outlook and do you think economic and societal risks are somewhat underestimated? Well you know it's always hard in the short term but I think we have a couple of structural risks that are out there that are quite frightening. I mean we're looking at markets that are very highly valued like almost across the board no matter what you look at and a market correction would have material economic implications because it's all our savings that are behind there and then I think beyond that we're looking at the scenario where we look at every increasing public debt with population that are starting to shrink and I think that's a toxic combination that I'm not sure we're paying enough attention to. I mean it's a good segue to one of the next parts of the report which looks at polarisation, societal risks, values at war. Can you tell us a little bit about that and how that's been in the past and what that's looking like now? So we look every year at the interconnections between these risks and we try to find out where are the strongest connections and for the second year in a row inequality is the most interconnected risks so it's essentially the risk that leads to greater effect on all of the other risks and in turn is affected by all of the other risks as well. So that's where we see the strongest interconnections and I think that's again not surprising because you've got for example mis and disinformation as one of the key additional risks and as technology advances as the risks from deep fakes for example rise and we looked at this a couple of years ago what that means for example for elections. You're starting to see there that that mis and disinformation is growing and fueling the fire of societal polarisation. In addition to that in the current situation you've got this risk of we were talking about K-shape recoveries a few years ago. Right now there is this risk of more permanently entrenched K-shape economies where some sectors do very well and other sectors that are really not getting that same kind of growth which then of course leads to greater income inequality and we see that across the report we see this concern around inequality, lack of economic opportunity, potential risks through the job market through artificial intelligence and all of that combined with this broader societal polarisation that has been quite steady and high in the rankings for some years. So I think all of that together is fueling this piece around inequality and values at war. So when we say that inequality is the most interrelated risk does that mean if we fix it we could fix some of the other risks. I think there are not necessarily any silver bullets when it comes to this. I think inequality is a long-standing issue. It definitely there is some of the latest research over the last few years has shown that actually inequality can for example hamper economic growth. So you don't necessarily have simple solutions like grow your way out of inequality and at the same time only redistribution would also not lead to broader growth that allows for progress for all. So I think it's more complex than that but it is very clear that if we don't start breaking some of these connections and start looking at those that have been losing out from the economic systems of the last few years then this particular pattern will continue. It's a good moment to talk about technology. I think no conversation would be complete without a mention of AI and technological transformation. There's quite a lot in this report about the disruptions that we're seeing AI seems to have seeped into the consciousness. We can't get away from it. It's very disruptive. Question to Andrew, how are you seeing AI affect business operations and what are the actions that business leaders could take to manage this transformation? There's no doubt we are seeing the advancement in AI and quantum computing is reshaping labour markets and it has got some real implications. Many people look at the downsides but also there are many upside what I would also say is each sector and when we talk with clients we break ourselves into sector by sector whether that's the construction sector, the energy sector, the logistics sector and the impacts are felt differently in each sector and we're already seeing advances there. One of the things though that is a challenge is the misuse of AI. I think there is some concern around yes AI can help advances, help that offerings in the particular sectors as I say. We talk about the creation of data centres and digital infrastructure, some huge opportunity there but equally there are some huge risks that companies face along the way with that and we've already seen how the use of technology and AI can lead to an erosion of trust through missile disinformation and what I would also say is with these advances it can also make businesses more susceptible to cyber attacks, tax against critical infrastructure. For example let's look at a cyber attack on a cargo ship's navigation system that may challenge the cargo ship and their ability to deliver what they need to deliver but what it might mean if you've got a ship with perishable goods is not only can't deliver that entire cargo or significant elements of that are destroyed or have less value. There are also challenges that can manifest if you are building a digital infrastructure, data centre, someone attacks the heating system or the cooling system relative to that, suddenly you have an impact so I would mark it that there's fantastic opportunity and there are many of those that will take advantage of that but by the same token it does create more risks as these risks emerge and the successful companies will be those that understand those plan for those and build resiliency into their planning for the unintended consequences that can happen. So digital infrastructure is super important which just reminds me of heater your piece that you've written for our platform your article which is about critical infrastructure. What are you seeing there? Are we worried enough about our critical infrastructure and the risk? I don't think we are and I think the risk report shows that the perception is basically that the infrastructure is there and it works and we don't need to worry when we should and I think for various reasons we should worry more. We see a lot of countries where the maintenance is underfunded so even the infrastructure that we have is not properly maintained and degrades and becomes kind of more susceptible to interruptions but it's also like the exposure to external factors be it environmental. I mean we see droughts that principally challenge water energy. We see that challenge the cooling of nuclear power plants. I mean we've seen that now in a couple of summers. At the same time you see attacks on infrastructure. A lot of the critical infrastructure like underwater cables or electricity grids are principally unprotected and so there is a frightening number of angles where our infrastructure that we critically depend on is exposed. A from a lack of maintenance but also it's open to attacks. It's open to environmental threats that are increasing with global warming and yes the short answer is we don't worry enough. Moving on to the next risk category which is environmental. What did we see there? Claudia. Yeah so this is quite concerning because we see that over the next two years environmental risks have essentially been deprioritized and even 10 years out their severity scores have gone down even though the top three risks over the next 10 years remain environmental and I think the concern is obvious. This is obviously an existential risk but even if we bring this down to is relatively more near-term economic impact. If you just think connecting back to what Peter was saying droughts, floods, wildfires, loss of nature and biodiversity all of that has a huge economic impact even in the shorter term. So I think the fact that these have been deprioritized is concerning but it's also to some extent understandable because there has been this focus on shorter term risks around geopolitics, around geoeconomics, around potential asset bubbles. All of that is starting to detract the attention of many leaders and experts but that is not to say that this isn't something that we also need to be looking into and of course here there is a wider infrastructure of international cooperation that really does need to continue. When Andrew do you think there is more that can be done that leaders could focus on particular actions that steps could be taken to get this higher up on the agenda? I think if people can measure risk, one of the challenges with perhaps misinformation, disinformation and bias is it is enabled to perhaps move down the list. One of the things that we see is the more robust data and the more of a return that you can demonstrate, an economic return, if I manage this, the outcome statistically can become that then that is going to make it much easier for people to have that as a continued focus. It comes back to the whole tenet throughout these risks is if they are measurable with robust data, it is much easier to manage them and either through the business manage them or one of the things I have referred to is insurance companies are very good if you can demonstrate that that measureability in deploying their capital to help companies manage and mitigate those risks. So there is definitely more to become but as the risk landscape continues to evolve that measurement is going to be absolutely critical. So measure it is the short answer, yeah thank you. So looking ahead I feel we need to find some reason for optimism surely. So it is a question to all of you starting this idea what is there anything that gives you cause for optimism this year? Yes I think it is perhaps very obvious to talk about but we are bringing together nearly 3000 global leaders next week at our annual meeting in Davos and they are all coming together under this broader theme of a spirit of dialogue and I think that is the very basic that we need to try to aim at. We need to bring people together and have constructive conversations even with diverging viewpoints around how we can advance some of the progress that needs to be made against these risks and that applies to the economic domain, to the environmental domain, the societal domain and that is very much where we will be focusing over this coming week. Beyond that I think as you can see in the report we do for each one of the deep dives around these risks we do point towards some of the actions that need to be taken today and while some of this is about ensuring that we support the multilateral and international cooperation structures that currently exist it's also about more than that it's about building coalitions of the willing between those states that are willing to work together it's about localizing solutions at a national or a community level and it's also about having some of those more many lateral or regional agreements that need to take place between countries. So I think the solution set will have to expand but the good news is there are solutions and most of these risks can very much be dealt with and prepared for. Peter, do you agree? Well I'm an eternal optimist you know humans have an incredible ability to adapt to whatever circumstances they're confronted with and we're going to kind of collectively make the best out of this situation as well. We're also incredibly afraid of change so whenever we're confronted with an environment that is changing we don't like it and so I think that's the combination we're looking at kind of we make incredible progress on a technological front of many fronts the world was never a better place to live on than today but here's the but we see all this change we see all the risks and we tend to be afraid rather than optimistic and trust in our ability to adapt because that's what it will take. Things will not stay the way they are but that doesn't that doesn't mean they need to kind of go for the worst they can also develop for the better. And Andrew I know you I know you're a glass half full when it comes to technology and you see lots of opportunities so any words of optimism for us. Yeah I mean you know we we're much have been operating for over 150 years and throughout that period there have been periods like this where we feel this isn't you this is different and you know we come through them you find a way through you know human beings are curious you know and as you know we're looking for solutions we're looking for a way forward it's the business we're in and you know our role and the role for society to prosper is how we find a way through this and the challenges today won't be the same as the ones tomorrow and there'll be different ones the day after that but what's super exciting for me is how we meet those head on and we solve for them isn't easy it needs partnership it needs public it needs private and it needs collaboration a coalition of the willing and if we can build back some of that trust that sometimes gets eroded then together I'm very optimistic that we can do some really exciting things that can fuel the next phase of growth well that's a great segue to our annual meeting next week lots of work to be done there's a lot more on our global risks report and you can find the whole thing as well as more analysis on our website that's wef.ch/risks26 and across social media using the hashtag risks26 many of these big issues as we've said will be under discussion next week our annual meeting in Davos opens on January the 19th you can follow that on our website that's wef.ch/wef26 and across social media using the hashtag wef26 follow radio Davos wherever you get your podcasts which will mean you don't miss our daily audio shows from the heart of Davos next week and thank you to Sadiya my co-host and to our guests Andrew and Peter thanks very much thank you