Cost of living, geopolitical woes top global risk outlook

CEBU, Philippines — Rising cost of living and security situations are identified as global risks that may affect employees and organizations, according to global health and security services firm International SOS in its “Risk Outlook 2023” report.

These findings are based on medical and security environment and data of countries with “insignificant” to “extreme” levels of risk.

The report revealed that the Russia/Ukraine conflict will still have an impact in 2023, so organizations need to address the shifting global risk environment.

Geopolitical volatility will spread beyond Russia/Ukraine in the next 12 months, as increasing rifts between Russia and the West will impact other conflicts and intensify longstanding tensions.

Likewise, the US-China competition will also increasingly dominate

the geopolitical and economic landscape. Given these situations, organizations are advised to constantly revisit the potential implications to their businesses and people.

Moreover, the report encouraged organizations to manage crisis management fatigue by providing the correct level of training, investment, and support to their teams. This strategy is key to moving teams from “perma-crisis”; to crisis resilience and establishing robust organizations that maximized their learnings and capabilities from the past two years.

The findings also demonstrated that many experts predicted social unrest as another key driver of lost productivity in 2023. For instance, 48 percent predicted that the cost of living pressures would impact domestic employees, and 33 percent saw civil unrest affecting business travelers.

Social unrest will be a significant item on the C-suite agenda in 2023 due to various triggers and impacts. Volatility in energy and agricultural markets will fuel unrest, particularly in unstable, fragile economies like Sub-Saharan Africa, Egypt, and Lebanon. Unresolved economic or political issues will provoke growing public dissatisfaction, cycles of unrest, and increased probability of violence in countries like Pakistan, Sri Lanka, Ecuador, Peru, and Iraq.

Global polarization may also lead to domestic polarization and inflame social unrest. In extreme circumstances, it could lead to violence and criminal activity in high-risk locations like the US and Western Europe.

The annual risk outlook study exposes gaps in the protection of employee health and security such as risk perception, mental health, productivity impacts, and operational challenges. The survey is complemented with interpretations and predictions from the Workforce Resilience Council, as well as extensive proprietary data and analysis from International SOS.

The Workforce Resilience Council is made up of representative experts from all health, security, and safety fields. The participants in this year’s Council are from a mix of think tanks, associations, advisory boards, NGOs, and IGOs, relevant to the risks of working at home or abroad.

“The drivers for unrest will be numerous in 2023, and accounting for the impact of social unrest is going to be a key task for businesses in 2023. Mitigation starts with understanding the risk environments in which organizations operate, drivers of unrest, and most likely impacts on employees and operations. This move can help businesses ensure they have the right early warning systems in place, understand potential triggers and the kind of organizational response needed to counter any security issues,” said  Sally Llewellyn, global security director of International SOS.

 Organizations must also consider the various impacts of climate change, which goes beyond extreme weather events. Experts advised that climate change contributed to the emergence of new and resurfacing of old infectious diseases. This was illustrated by multiple “unusual” outbreaks of SARS, Ebola, COVID-19, and Mpox.

A briefing published in Nature Climate Change in August 2022 estimates “over half of the known human pathogenic diseases can be aggravated by climate change.”

Dr. Irene Lai, medical director of International SOS, explained that organizations are well-versed on how to respond to the ongoing COVID-19 pandemic.

“However, they should build on this existing knowledge and broaden crises and business continuity plans to include known health risks as well as potential health threats. Forward planning to ensure organizational resilience is critical as climate change is contributing to multiple crises occurring simultaneously, and another pandemic is inevitable.”

 Meanwhile, the Risk Outlook report indicated that 86 percent of organizations plan to maintain or increase travel risk management budgets, so it is likely that travel will grow and return to pre-pandemic levels. This investment will be vital to keeping business travelers safe in the year ahead. The trend was also observed in International SOS’ traveler tracking data, which showed international travel now at 83 percent of pre-COVID volumes, but travelers were twice as likely to call for advice or assistance.

The International SOS Risk Outlook 2023 report is based on a survey of 1,218 senior risk professionals across 108 countries. It details some major risks organizations must address in 2023 and highlights how organizational leaders should support employees affected by ever-shifting “perma-crisis” events.