Global Risks Report 2025: A Wake-Up Call for Board Directors to Prioritise Climate Governance

The World Economic Forum's Global Risks Report 2025 underscores a pivotal moment for corporate boards, highlighting the imperative to integrate climate considerations into strategic decision-making. With environmental risks dominating the long-term horizon, the report serves as a clarion call for directors to reassess and fortify their governance frameworks.

Navigating a Fragmented Global Landscape

The report reveals an increasingly fractured global environment, characterized by escalating geopolitical tensions, environmental challenges, and societal divisions. Notably, five of the top ten risks projected over the next decade are environmental, including extreme weather events, biodiversity loss, and natural resource crises. This convergence of risks necessitates a holistic approach to governance, where climate considerations are not peripheral but central to strategic planning.

Key Takeaways for Board Directors

In light of these findings, several actionable insights emerge for board directors:

• Adopt a Long-Term Risk Perspective: While immediate challenges demand attention, boards must also anticipate and prepare for long-term environmental risks. Proactive oversight and foresight are essential to build resilience and ensure sustainable value creation.

• Understand the Operating Context: Boards should ensure that management conducts rigorous assessments of the broader operating environment. A comprehensive understanding of external risks enables the development of forward-looking strategies that align with the company's purpose and societal expectations.

• Align Short-Term Performance with Long-Term Vision: Effective governance requires integrating short-term key performance indicators with long-term strategic objectives. Establishing dedicated committees for risk, audit, and sustainability can facilitate deeper exploration and informed decision-making.

• Institutionalize Scenario Planning: Embracing scenario thinking allows boards to prepare for extreme but plausible events, enhancing strategic agility and psychological readiness. Regular exposure to diverse scenarios can serve as a competitive advantage in navigating uncertainty.

• Clarify Purpose and Align on Shared Goals: A clearly defined organizational purpose that links business performance with societal benefit fosters stakeholder trust and mitigates internal fragmentation. This alignment reinforces strategic clarity and resilience.

Embracing Climate Governance

The Global Risks Report 2025 emphasizes that climate-related risks are not distant concerns but immediate challenges that require decisive action. Boards must embed climate governance into their core functions, ensuring that environmental considerations inform all aspects of strategic planning and risk management.

As part of the Climate Governance Initiative, Chapter Zero Brussels is committed to equipping board directors with the knowledge and tools necessary to lead in this complex landscape. By fostering a community of climate-conscious leaders, we aim to drive meaningful change and promote sustainable business practices across the EU and BeLux regions.

or a comprehensive understanding of the Global Risks Report 2025 and its implications for board directors, we encourage you to explore the full report and related resources.