Global temperature changes top list of extreme risks for investors
Global temperature changes have become the top extreme risk for investors, according to a new index of the greatest threats to world economic growth in 2019.
Weather hazards, a collapse in global trade and cyber warfare were ranked as the greatest risks in a report that categorises rare events which could have a high impact on world growth and asset returns.
Read more: Debate: Would a no-deal Brexit be bad for business?
A collapse in biodiversity, the abandonment of fiat money and cyber warfare have all moved into the top 15 risks for the first time, while deflation, insurance crises and terrorism have all dropped out.
Risks that have risen up the rankings this year are infrastructure failure (+8 places), as well as global trade collapse (+3) and currency crisis (+3).
According to the report, produced by The Thinking Ahead Institute (TAI), the extreme risks that are less of a threat than in 2013 include stagnation, which has fallen eight places, as well as resource scarcity which lost top spot by falling three places.
“Our extreme risks ranking has seen the emergence of a general trend with financial risks falling down the rankings and non-financial extreme risks growing in significance, said Tim Hodgson, head of the Thinking Ahead Group.
Read more: The City is ready to trade with the world
He added: “Global temperature change becomes the highest ranked risk due to our assessment of higher likelihood coupled with significant impact – in the extreme this would mean mass extinction.”