Understanding and managing procurement risks can help mitigate them from local to global level, with plenty to consider from the latest Global Risks Report from the World Economic Forum.
When procuring goods and services for your business, it’s important to consider risk barriers at every stage – and what’s on the horizon.
The 17th annual Global Risks Report tracks global risks perceptions among risk experts and world leaders in business, government, and civil society.
Of the key findings, climate, fraying of social fabric were aired among the top risks, while just one in 10 respondents sees economic revival quickening any time soon.
Short-term fears include health and social issues caused by pandemic, while economic and debt-related issues appear as medium-term dangers.
Experts predict the global recovery may be volatile and uneven. The report states the serious challenge persisting from the pandemic is economic stagnation and “uneven recovery trajectories”.
Global economy to reduce by more than two percent
“The macroeconomic outlook remains weak, with the global economy expected to be 2.3% smaller by 2024 than it would have been without the pandemic,” the report says.
“The pandemic and its economic consequences continue to stifle countries’ ability to control the virus and facilitate a sustainable recovery.
“Along with labour market imbalances, protectionist policies and widening disparities in education and skills, the economic fallout from the pandemic risks splitting the world into divergent trajectories.”
The report says in some societies, rapid vaccine progress, digital leaps, and a return to pre-pandemic growth herald better prospects for 2022 and beyond.
But other societies could be stifled for decades by struggles to apply even initial vaccine doses, combat digital divides and unearth new sources of economic growth. When considering the momentum behind ESG in procurement, the report says the health of the planet remains a constant concern. Environmental risks—in particular, “extreme weather” and “climate action failure” are top risks from short to long term. In the medium term, economic risks such as “debt crises” and “asset bubble burst” also emerge as governments struggle to balance fiscal priorities.
In the longer-term horizon, geopolitical and technological risks are of concern too—including “geoeconomic confrontations”, “geopolitical resource contestation” and “cybersecurity failure”, the report says.
Download the World Economic Forum Global Risks Report.
