Environmental risks led by extreme weather and climate action failure are both the most likely risks facing the world and those with most impact, according to the latest annual Global Risks Report, produced by the World Economic Forum ahead of its annual meeting next week.

For the first time in the 15 years during which the report has been produced, all five of the top most likely risks were climate and environment risks and they represented four of the top five risks in terms of likely impact.

Borg Brende, president of WEF, warned that this is the decade when companies have to take action.“If we don’t act over the next ten years we will be rearranging the deckchairs on the titanic.” he said. He added, “Moving from red taxes to green taxes also has to deal with inequality”.

John Drzik, chair of report contributor Marsh and McLellan Insights, said, “Business leaders should consider the actions they need to make much more urgently”.

Highlighting the trend towards more transparency on climate risks Drzik said that this now arose across all stakeholder groups. He said regulators want more transparency, rating agencies had incorporated climate risk, employees were demanding action, customers were expressing green preferences. “This will all focus attention in the executive suite,” he said. 

Companies had to react by becoming more resilient to climate risk – which might include changes like unexpected regulatory change, as well as physical effects – and making sure that extended throughout their supply chain.

Peter Giger, chief risk officer of report sponsor Zurich Insurance Group, said that as an insurer he could no longer trust history, if weather patterns were changing.

WEF’s Emily Fransworth said that carbon emissions had been increasing by 1.5% annually in recent years and had to fall by 5% annually in coming years. However there were some positive signals, after low carbon project rollouts “Now we know what works we can accelerate action”. 

Brende too had some positive messages, saying “Who would have imagined that solar today would have been one tenth of the price it was ten years ago.”