Dhe year 2022 will be the first for the EU without the leadership of Angela Merkel. The Chancellor has so often mediated business between the members of the alliance. “But in the future it will be far more difficult to find a consensus quickly when one is necessary,” warns Harald Nikutta, Senior Partner and Head of Germany at Control Risks, an international security consultancy.
Because other politicians who could slip into Merkel’s role are not in sight. “Emmanuel Macron of France and Italian Prime Minister Mario Draghi have problems in their own countries. It will remain a challenge to find a consensus between the member states in good time in order to be able to react quickly to global developments,” said Nikutta. This is likely to deal another blow to the EU’s ambitions as a geopolitical actor in the traditional sense.
Above all risks, however, is the corona pandemic. After nearly two years of the pandemic, a growing number of unstable, dysfunctional states are too weak to respond to external shocks and internal challenges, according to Nikutta, Control Risks’ Risk Map 2022, which has now been published, warns. It summarizes the threat situation in the world and uses it to formulate risks for companies. Corona is the biggest threat to global security this year. “We expect that companies, even in high-income, historically stable countries, will increasingly have to deal with security threats that can be traced back to political instability and state overload,” says Nikutta. Social fragility, radical activism, polarization and political violence would confront companies with rapid escalation scenarios.
And another aspect of the pandemic could become threatening, Nikutta warns: “If a significant proportion of the workforce works permanently hybrid or flexibly, existing security concepts should be questioned.” This is also important for the terrorist threat in many countries. It is often no longer enough to just protect the company headquarters if the employees are mainly working from home.
Cybercrime is another risk for companies. “We are concerned about the rapidly expanding cooperation between states and cybercriminals. Iran, North Korea and other states have directly engaged in profit-driven attacks or have been collaborating with cybercriminals for a number of years,” says Nikutta. Since this cooperation is and has been successful from the point of view of those involved, both politically and financially, it is assumed that this new type of cooperation will set a precedent.
For companies, this means: They have to take precautions themselves and constantly adapt the protection of their critical infrastructure to the changing threat environment. It is the central recommendation of the company’s cyber consultants to their customers to deal with the unexpected, greatest possible damage scenarios in order to identify possible weak points and gateways, prepare the organization for cyber attacks and build resilience. Nikutta: “Now more than ever, it’s important to think from the attacker’s perspective.”
AGCS, Allianz’s industrial insurer, also warns of the dangers posed by increasing cyber risks. As such, these are the number one concern for businesses around the world – troubling them even more than business and supply chain disruptions, natural disasters or the pandemic. This was shown in a survey of 2,650 managers and insurance experts from 89 countries. “We will see more attacks on supply chains and critical infrastructure,” says AGCS manager Jens Krickhahn. The insurer was recently able to observe that the claims burden had risen significantly. Not only are there more cases, but the severity has also increased. In the meantime, the blackmailers demanded high double-digit million amounts. But although companies are so aware of the danger, the total volume of premiums has hardly increased. The insurance volume per contract has even fallen – this effect has been offset by price increases and more new business.
Source: Infographic WORLD
The weather isn’t good news either. According to the UN World Meteorological Organization of September 2021, climate change has contributed to the fact that the number of weather-related disasters has increased fivefold in the last 50 years. “Globally active companies must now have the ability to react to several crises at the same time or to cope with multidimensional crisis scenarios – i.e. the crisis within another crisis,” says Nikutta. And the pressure on companies from investors, activist shareholders, regulators, consumers, activists and governments to make fast, measurable and effective progress on climate protection and sustainability is increasing.
According to the Allianz survey, most companies fear climate-related weather events. Almost 60 percent are concerned that company property, such as buildings, could be damaged as a result. 40 percent emphasize the risks for operations and supply chains. The consequences of higher climate protection requirements can also threaten the existence of some companies. After all, more and more companies have to meet strict requirements and complex regulations in order to become climate-friendly. Almost 40 percent of managers and experts are concerned about this. “The pressure on companies to do something about climate change has increased significantly in the past year,” says Line Hestvik from Allianz.
The chaotic withdrawal of the USA and its allies from Afghanistan represents a risk with a question mark. “It clearly underlines that we are on the way to a new global geopolitical order with an uncertain outcome,” says Nikutta.
It is still unclear who can assert claims to leadership, how far some actors are willing to go or what will happen to the previous rule-based international order in the course of this. “For emerging powers or actors dissatisfied with the status quo, the incentives to push boundaries increase,” Nikutta continued. This will continue to manifest itself in regional crises and conflicts.
China could also become a greater risk for companies. “From the exchange with our customers, we know that many companies are concerned about the extent to which China could take the lead in the new world order,” says Nikutta. For companies, it is about unhindered access to business-critical goods, technologies and services as well as the general availability of data. The ability to adapt to changing regulatory requirements is also important for business continuity and the ability to act. Angela Merkel’s style could also be missing here.
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