Concern about a macroeconomic downturn has rapidly ascended into the top emerging risk facing organizations, according to
"The top five risks reported by respondents were notable both for their interconnectedness and origination outside of the organization," said
Gartner identified an economic downturn as one of the top five emerging risks in the first quarter and concern about this risk has accelerated since then. Notably, all five top emerging risks in the second quarter are external to the organization and can have significantly different impacts based on geography and industry (see Figure 1).
Figure 1. Top Five Emerging Risks, 2Q22
1. Macroeconomic Downturn
2. Escalation of Conflict in
3. State-Sponsored Cyber Attacks
4. Energy Price Inflation
5. Key Material Shortages
N = 306
(Source: Gartner,
ERM leaders should continually reassess assumptions about their macroeconomic outlook and ensure that "top-down" risk assessments originating from senior executives are balanced by "bottom-up" risk evaluations that rely more on the experiences of business unit leaders from across the organization.
Senior executives should be concerned about signal loss or the inability to get critical, on the ground intelligence in a timely fashion to respond to these fast-moving risks. According to Matlock, leading organizations do not just avoid risk, but seek to embrace it as an opportunity to expand market share and move past competitors.
Balancing Near-Term and Longer-Term Risks
Energy price inflation ranked as a top five emerging risk concerning respondents, yet levels of executive attention may still not be adequate to effectively mitigate the risk.
An escalation in impacts from
Matlock said executives should be prepared for continued issues because of ongoing sanctions on
"Uncertain environments require executive teams and their ERM partners to ensure they have processes in place to zero in on the most pressing risks for their organizations and ensure mitigation plans are in place for worst-case outcomes," said Matlock. "ERM leaders can help bring clarity to executive decision making through qualitative assessments that are tailored to the organization's risk appetite, which is especially useful at a time when quantitative measures of risk are elevated across the board."
Gartner clients can utilize the Quarterly Emerging Risk Benchmarking Tool to visualize and compare the top emerging risks by industry, sector, region and revenue. More detailed analysis is available to Gartner clients in the full report 2Q22 Emerging Risk Report. Nonclients can complete free registration to read more in Emerging Risk Trends.
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