Greatest Risks To Businesses In 2021
Organizations have reported heightened risks and threats over the past year, largely due to the COVID-19 pandemic, according to the 2021 BCI Horizon Scan Report, sponsored by BSI.
Non-occupational disease has found its way to the top of the list of business risks, with a lack of preparedness cited as the main reason for disruption. This is in contrast to the 2020 report, which saw non-occupational disease near the bottom of the list of concerns.
The impact of the pandemic has also led to intensified risks elsewhere, stretching beyond the loss of life.
Health incidents are reported as the second most common source of disruption over the last 12 months, with mental health issues the top ailment experienced by employees.
The pandemic also provided an opportunity for cyber-criminals to exploit the security vulnerabilities created as people moved to working from home. This, coupled with unforeseen network outages, led to cyber-attacks and IT/telecom outages being placed 4th and 5th on the list of risks.
The report also identifies new emerging risks for 2021 as a result of changed business circumstances.
The legacy of COVID-19 has led to political risks and violence returning to the top 10 for the first time in three years, while disruption to IT and telecoms services are predicted to continue, particularly as new technology is brought to market to help society build back post-pandemic.
Despite the changing risk landscape, climate risk continues to feature high on the corporate agenda. Over the medium-to-long-term, organizations identified climate risks as the highest concern, with more incidents of extreme weather expected and more governments setting environmental targets, such as the New Zealand’s 2050 net zero target.
However, there is a more optimistic outlook ahead. The heightening of such risks, together with ongoing uncertainty, has led to organizations improving their risk trend analysis, with an all-time high of 81 per cent now performing longer-term trend analysis.
Respondents reported that the pandemic has been the catalyst to accelerating the introduction of a more structured, centralized analysis programme, with managers largely driving the change. With this, comes a positive expectation for business continuity to continue receiving good investments in the year ahead.
“The intensity and speed at which COVID-19 travelled through the globe in 2020 caught most organizations by surprise,” says the BCI’s Head of Thought Leadership, Rachael Elliott.
“It was those organizations who adopted exemplary horizon scanning techniques coupled with agile and adaptive resilience strategies who were able to weather the storm most effectively.
“Encouragingly, many organizations have already learnt from errors made and have adopted a more intensive and collaborative view to risk planning in 2021. Management have become more engaged as a result and are already pushing for more resource to be available, funds being made available to purchase new tools and seeking to align or certify to international standards for the first time.
“2020 will always be remembered as the ‘year of the pandemic’, but it is also the year that looks to have provided positive change in the resilience industry.”
Over the last 12 months, we have seen organizations face unprecedented challenges as most sectors focused all their efforts on overcoming the pandemic. BSI Group Commercial Director, Harold Pradal says it is inevitable that organizations will need to continue to change their approach to long-term risk analysis if they are to remain resilient.
“This year’s Horizon Scan report shows some encouraging early signs that organizations are aware of the need to change and embrace a forward-looking approach, which is vital for ensuring they remain future ready,” he says.