Exploring dependencies among global environmental, socioeconomic, and technological risks

Global risks pose a serious challenge to the success of international businesses due to the direct impact of risks on business operations. The World Economic Forum (WEF) regularly conducts surveys involving experts to help governments and businesses understand the significance of global risks across different regions. The WEF has classified 30 global risks of doing business into five distinct risk categories, including economic, environmental, geopolitical, societal, and technological risks. This study aims to utilize the survey data by WEF for establishing statistical dependencies among different risk categories. Rather than using the conventional approach of prioritizing risks based on probability and impact ratings, which has been criticized in the literature for several limitations, we make use of expert judgment regarding the relative importance of risks. The results of this study reveal strong statistical dependencies among five risk categories and associated risks. Another merit of this paper is to capture the uncertainty surrounding risk assessments. There is a negative correlation observed between the two risk ranking schemes while considering the probability of individual global risks being in the top five and bottom five risks.