Intelligence report puts ‘Dis-Honesty’ at the top of business risk list for 2022
A high level of integrity – including resilience, sustainability, and compliance with shifting regulations – will be critical to business success in 2022, according to the latest forecast by the New York-based global risk consultancy, Sibylline.
Sibylline’s 2022 annual forecast, released today, offers predictions for the year ahead, identifying key risk trends, indicators and implications for business. Against the background of continued disruption from Covid, mounting business pressures in 2022 will include:
- Growing disruption from emerging technologies
- Increasing public and government scrutiny of corporate accountability
- Even greater geopolitical rivalry between the world’s top economies
- Protest threat at US midterm elections – steaming from increasing political polarisation
Technological Threats – The risk of sophisticated cyber-attacks on businesses will rise into 2022 as many have fallen into insufficient security habits following hybrid working during the pandemic. As the FBI has reported, the first half of 2021 saw a 62% rise in ransomware in the US alone, with this trend set to increase. Modernising borderless security architectures will be essential to avoid attacks. The main risks remain financial loss and reputational damage, however security managers will also have to consider physical harm to employees from the potential weaponization of technologies such as Internet of Things and autonomous vehicles. In turn, as security measures are improved, businesses are warned that threat actors could redouble their efforts to draft company insiders into criminal schemes – people remain the weakest link.
Environmental, social and governance (ESG) – Increasing public scrutiny and government focus on ESG will put pressure on businesses to be accountable and compliant. Implementation of supply chain resilience, sustainability and data privacy measures are crucial to avoid reputational (market) impacts and financial penalties for policy infringements. Additionally, mixed reactions to the COP26 agreement are likely to strengthen the solidarity to enforce “climate justice” in 2022, propelling various activist groups to work together and share expertise to target businesses beyond the traditional parameters of their single-issue focus. The integration of ESG in a meaningful way, rather than simply paying lip service, will therefore be key for businesses.
Global Rivalry – The evolving strategic rivalry betweenthe US and China will continue to have a wide-reaching impact on business and trade in 2022. Although the two sides have struck a more conciliatory tone in recent talks, suggesting a lower risk of tit-for-tat ratcheting of trade barriers heading into 2022, there persists an enduring risk to China-based foreign businesses and individuals. This includes the challenge of supply chain disruption, with likely further impacts on domestic production and international shipping, meaning the flow of goods to shelves will remain erratic. Meanwhile, tensions with Russia will also dominate regional relationships and energy dynamics, while traditional flashpoints such as the Persian/Arabian Gulf will remain tense given global competition.
Midterm elections – Rising political polarisation poses the risk of disruptive protests and violent attacks in the lead-up to, and aftermath of the US midterm elections in 2022. Polarised views, which have been fuelled online during multiple covid lockdowns, have motivated individuals to act upon their beliefs and are likely to use political events, like the elections to express their view and mistrust of government and corporations.
Justin Crump, Sibylline CEO says “For businesses, 2022 will be a year of new workforce dynamics, complex hybrid threats, further supply chain shocks, continued uncertainty over global travel, and real and genuine focus on ESG factors. The reputational and regulatory costs to businesses perceived not to be doing enough will undoubtedly increase.
“All of this, while world leaders are grappling with monumental global geopolitical issues, from migration and a new Covid-19 variant to climate change and regional conflicts, means 2022 is not going to be an easy ride for businesses. However, resilient organisations that truly understand the meaning of business integrity will still thrive. Our Annual Report, which pulls together intelligence from our 160 global analysts, will help agile leaders make informed and timely decisions in a time of rapid change.”