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- Published: Tue, Oct 25, 2022 08:30
According to the Gartner 3Q22 Quarterly Emerging Risks Report, business risk is the top concern, but there is growing concern about critical infrastructure failures. This report is based on a survey of 333 senior executives and risk management professionals conducted in Q3 2022. Since our Q2 2022 report, the macroeconomic downturn has been identified as the top emerging risk, followed by shortages of key raw materials and rising energy prices.
Chris Matlock, vice president of legal, risk and compliance at Gartner, said: “The interconnected nature of macroeconomic risks is noteworthy, as all of the top risks can be viewed as part of the same macroeconomic downturn theme. “We are increasingly concerned about the ramifications of the environment, as evidenced by concerns about critical infrastructure failures emerging as the top new concern among C-suite executives.”
Recession risk has been highlighted by management for the third consecutive quarter since it was first identified as a top five emerging risk in Q1 2022. The interconnected nature of the macroeconomic risk environment, a trend that Gartner has tracked since the beginning of the year, along with the prospect of energy rationing, ongoing inflationary pressures, and commodity shortages, is likely to emerge in events such as the European energy crisis. It’s becoming more and more obvious. industrial input. Certain concerns about major commodity shortages and high energy prices persist throughout the year.
European organizations are particularly vulnerable as they face the potential for energy rationing and ongoing industrial disruption that could further limit the input of key raw materials. These shortages could prolong and exacerbate the broader inflationary drivers affecting both Europe and the rest of the world.
Top 5 emerging risks in Q3 2022
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1. |
macroeconomic downturn |
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2. |
shortage of key materials |
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3. |
energy price inflation |
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Four. |
Critical infrastructure failure |
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Five. |
Growing conflict in Europe |
N = 333 Source: Gartner, October 2022
While corporate risk leaders and other executives across the enterprise will need to work to mitigate downside risks in the near term, Matlock is also active in identifying opportunities during this turbulent time. I encourage executives to work on it. The third-quarter 2022 report puts the energy transition, including the ability to adapt supply chains to potential rations and identify alternatives earlier than competitors, to be the top ’emerging risk as an opportunity’. is emphasized as
“Management’s response to addressing the economic turmoil is in many ways more important than the slowdown itself, and a more complete understanding of these interrelated risks will greatly enhance the necessary strategic bets. It allows us to do it at scale,” Matlock said.
Growing Concerns About Critical Infrastructure Failures
While many of the top five emerging risks persisted throughout the year, “critical infrastructure failure” represents a new area of growing concern for survey respondents. Much of this risk is caused by ongoing conflicts in Europe, including concerns over attacks on physical infrastructure and state-sponsored cyberattacks, but there are also concerns about infrastructure being vulnerable to extreme weather events. Concerns also play a role.
“Business leaders are assessing not only the primary impact of actual infrastructure failures, but also the secondary and tertiary impacts of weakened supply chains and increased compliance obligations as a result of regulatory concerns on this issue. We have to,” said Matlock. “This is another area where ERM can work with management to identify opportunities by moving from a reactive to a proactive stance.”
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