Executive summary

The World Economic Forum’s Global Risks Report 2026 describes a world entering an ‘age of disorder’, characterised by accelerating change and deepening risk interconnections. 50% of global leaders expect a turbulent or stormy outlook over the next two years, rising to 57% over the next decade (p.5). Around 20% of global seaborne oil and gas trade passes through the Strait of Hormuz, underscoring how a single geopolitical flashpoint can transmit economic shocks worldwide (p.6).

Geopolitics & global trade

Geo-economic confrontation is ranked as the number one global risk most likely to trigger a material crisis in the short term (p.7). Trade has become more politically weaponised, with governments expanding the use of tariffs, sanctions, export controls and investment screening. 68% of executives globally and 76% in Asia Pacific expect geopolitical tensions to disrupt their operations in the next year (p.8).

The report recommends mapping supply chains beyond Tier 1 suppliers, diversifying markets and trading partners, and treating resilience as an investment rather than a cost. Scenario planning must account for political motivations and policy volatility, not just macroeconomic modelling (p.9–10).

Digital transformation

Digital transformation is acting as a risk multiplier, amplifying cyber insecurity, misinformation, operational fragility and trust erosion (p.12). High reliance on shared platforms and cloud ecosystems means failures can cascade rapidly. Adverse outcomes of AI are identified as one of the fastest-rising long-term global risks. More than 70% of major disruptions now involve cascading failures across interconnected systems, with recovery time — not incident frequency — emerging as the primary driver of economic loss (p.16).

Governance is identified as a key point of failure, requiring clear accountability, digital literacy at board level and scenario-based planning to translate cyber and AI risk into actionable decisions (p.14–16).

Climate & sustainability

Extreme weather events are ranked as the number one global risk over the next decade (p.18). In 2025, global surface temperatures reached approximately 1.44 °C above pre-industrial levels, with the past three years the hottest on record. Rising temperatures alone are projected to cost outdoor industries up to 2.7 million lost workdays annually by 2061 (p.5). Water demand to service data centres in Sydney alone is forecast to exceed the total volume of Canberra’s drinking water within the next decade (p.19).

The report advises embedding climate risk into board-level strategy, stress-testing operations against climate scenarios, and aligning insurance, capital and governance decisions. Organisations that engage proactively are better positioned to secure more favourable insurance terms and strengthen their position in climate-sensitive supply chains (p.20–21).

Workforce

One in two Australians experienced burnout last year, with uncertainty cited as a key driver (p.24). Psychological claims may represent only around 20% of workers’ compensation cases but cost roughly three times more than physical injuries (p.27). 63% of employees say they would trade a 10% pay rise for opportunities to build AI and digital skills, and employees who report high trust in their employer are more than twice as likely to say they are thriving at work (p.26).

The report recommends shifting to skills-based workforce planning, investing in manager capability, building trust through transparency, and making upskilling visible and accessible (p.28).

Conclusion

Risks no longer sit in isolation — they interact, amplify and cascade across financial systems, technology, supply chains and people. The report emphasises that resilience cannot be built in silos, and organisations that respond with integrated, enterprise-wide approaches will be better positioned to navigate sustained volatility.