The World Economic Forum (WEF) brings together leaders from politics, business, culture, and beyond to tackle global challenges and set the agenda for industries and regions. For nearly 20 years the Global Risks Perception Survey (GRPS) has been a central part of their Global Risks Report. This survey gathers expert insights from business leaders, academics, and officials to highlight key risks. Its 2023-2024 findings are a wake-up call for businesses in an unpredictable world.

Environmental concerns dominate the list of Top 10 business risks over the next 10 years: 

The graphic vividly illustrates the top 10 risks to business over the next decade, as identified by the CEOs of WEF enterprises. The colour-coding brings clarity, and what jumps out is an astounding fact: five of the top 10 risks (and the entire top four) are environmental in nature. These include extreme weather events, changes to Earth’s systems, biodiversity loss, and natural resource shortages. 

This perspective is not surprising when you consider that climate-related damages in 2024 alone amounted to approximately $350 billion, according to insurance giant Gallagher Re. Yet only 39% of these costs were covered by insurance. Businesses are feeling unprecedented financial pressure due to climate repair and mitigation costs, coupled with skyrocketing insurance premiums. In some regions, such as California, insurance coverage has even become unavailable. 

A Stark Contrast with the Travel Sector

The WEF’s long-term perspective contrasts sharply with the priorities of leaders in the travel and tourism sector, as highlighted by TTG Media in a recent survey:  

While the WEF focuses on environmental mega-trends, travel sector leaders are more concerned with immediate issues such as consumer sentiment and operating costs.  

This difference in priorities isn’t surprising, given the impact of the economic crisis and the pandemic. Furthermore, large enterprises, like those in the WEF network, have the resources to focus on long-term strategies; while small and medium sized enterprises (SMEs) are often focused on tackling immediate challenges and managing daily operations. However, building resilience is essential for businesses of all sizes, especially in the travel sector.

We strongly recommend that travel leaders start to benefit from work undertaken by global enterprises in understanding the mega-trends being faced. Our outsized reliance on natural resources means sustainability is especially important for the tourism industry. The World Travel and Tourism Council (WTTC) estimate that more than 80% of Travel & Tourism’s value is highly dependent on nature. This arises both from its demand for raw materials and the popularity of nature-based tourism. Clean environments, thriving ecosystems, and rich cultural heritage are the core attractions that draw travellers. Failure to embrace sustainability, risks these vital assets. Preserving our beautiful destinations, is crucial in securing the future wellbeing of the sector. The responsibility increasingly falls on business leaders to adopt longer term perspectives into their decision-making processes. 

So how can time pressed tourism industry execs, with a host of other priorities, lengthen their time horizons? Here are a few tips: 

• There is a wealth of guidance available! Sharing is a key part of TerraVerde’s mission. The graphic from the WEF is just one example. Other great sources include https://wttc.org/sustainability , https://unglobalcompact.org/ or the GSTC (Global Sustainable Tourism Council) www.GSTCouncil.org – which acts as a real hub for the global sustainability community in tourism. Many of the largest companies in the visitor economy, such as TUI or Accor Hotels disclose on the CDP www.cdp.net and browsing their submissions may spark a lightbulb moment. Membership organisations such as www.etoa.org, www.itt.co.uk and www.abta.com have also set up valuable resource hubs for their members.  

• Collaborate: companies that start will find that suppliers, clients and other partners in their value chain are on a similar journey and are more than happy to share experiences. 

• Mandatory sustainable regulation globally is coming down the track. Though this may sound like an onerous obligation, working towards compliance opens up significant opportunities.
  Regulations like TCFD or CSRD provide a strategic framework for leaders to plan long-term and assess impacts, risks, and opportunities. Embracing something that anyway is inevitable, optimises these opportunities.  

• Companies can also invest in climate risk modelling to better understand future scenarios. Safeguarding infrastructure and preparing for disruptions, strengthens resilience. Smart technology is increasingly available and delivers risk analysis at a very localised level e.g. a resort that a tour operator maybe relying upon for its business. Moreover, AI is driving down the price points of such technology, putting them within the reach of many ordinary businesses. 

Gaining these valuable insights helps travel companies evolve their model to address economic, environmental, and social challenges. Formulating new strategies, prepares businesses for climate change, enhances resilience, and contributes to the industry’s overall sustainability efforts. TerraVerde can help businesses navigate these challenges and offers tailored solutions designed to meet your business needs.  

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