Failure to mitigate climate change and other environmental risks pose the most serious global threats over the next 10 years even as the cost-of-living crisis – the biggest threat in the short term – risks undermining efforts to address those challenges, according to the World Economic Forum’s Global Risks Report 2023, published Wednesday.

The report, based on responses from 1,200 global risk experts, policymakers and business leaders, said “failure of climate change adaptation” and “natural disasters and extreme weather events” rounded out the top three most serious long-term risks.

The economic impacts of COVID-19 and the war in Ukraine have brought energy, inflation, food and security crises back to the fore. These create follow-on risks that will dominate over the next two years such as the risk of recession, growing debt distress, stubborn inflationary pressures and polarized societies enabled by disinformation and misinformation, the report said.

Interconnected risks and eroding resilience are giving rise to the risk of “polycrises” in which disparate crises interact and the overall impact exceeds the sum of each part, the WEF said in the report.

“In this already toxic mix of known and rising global risks, a new shock event, from a new military conflict to a new virus, could become unmanageable. Climate and human development therefore must be at the core of concerns of global leaders to boost resilience against future shocks,” Saadia Zahidi, managing director of the WEF, said in a statement.

The report was produced in partnership with Marsh & McLennan Cos. Inc. and Zurich Insurance Group Ltd.

Nine risks ranked in the top 10 over both the short and long term, including geoeconomic confrontation and erosion of social cohesion and societal polarization, along with two new entrants to the top 10: widespread cybercrime and cyber insecurity, and large-scale involuntary migration.

Biodiversity loss and ecosystem collapse is ranked as one of the fastest deteriorating global risks over the next decade and six environmental risks feature in the top 10 in the next decade, the report found.

Failure to mitigate climate change is ranked as a serious concern in both the short and long term “but is the global risk we are seen to be the least prepared for,” the WEF said.

Some 70% of respondents to the Global Risk Perceptions Survey rated existing measures to prevent or prepare for climate change as “ineffective” or “highly ineffective,” according to the report.

“Recent events have exposed a divergence between what is scientifically necessary and what is politically expedient,” the WEF said.

Geopolitical tensions and economic pressures have already limited – and in some cases reversed – progress on climate change mitigation, at least over the short term, the report found.

The report’s findings are a “call to action” for more advanced risk management techniques, given “the uncertainty and volatility of the world we are living in today,” said Reid Sawyer, Chicago-based head of the emerging risks group at Marsh LLC.

Policyholder awareness around severe weather events has never been higher, but “there’s a short-term tradeoff as we face cost-of-living pressure, pending inflation and a potential recession,” and the linkage to climate as a long-term crisis, Mr. Sawyer said.

While the federal government has passed laws and appropriated money for infrastructure improvements, cost-of-living and inflationary pressure means that in the short term there may be less money available to build sustainably, said Robin A. Kemper, Lawrenceville, New Jersey-based senior risk engineer at Zurich Resilience Solutions.

Hopefully, that’s a short-term trend that will reverse again so that these interconnected risks can be addressed, Ms. Kemper said.