risk for a second year running, followed closely by Economic downturn. Corporations are treading a fine line in how they navigate this environment. In a more multipolar world, they are facing far-reaching strategic decisions about which countries to continue operating in, which governments and political views to align with (if any), and how to talk and act on topics that have become politically sensitive, including issues related to social and economic inclusion. Reputational risk is set to become more central to corporate risk management as policies and actions are realigned in the face of powerful pressures at times pulling in divergent directions between societies and governments. With fiscal pressures rising, the social contract faltering and corporations feeling more pressure to focus on business considerations, there is a rising risk that the level of ambition for addressing a range of social challenges will be muted over the coming years. As pressure builds, it is likely that a correction will need to take place. Until then, the fraying social contract will be a source of heightened risk. Climate in the crosswinds The GRPS finds that environmental concerns, especially in the short term, are slipping down the ranking of leading risks for the first time in many years. The majority of environmental risks have fallen in ranking over the two-year time horizon, with Extreme weather events moving from #2 to #4, Pollution from #6 to #9, and declines also in ranking for Critical change to Earth systems and Biodiversity loss and ecosystem collapse by seven and five positions, respectively, with both of these risks in the lower half of the risk list. All environmental risks surveyed also decline in severity score over the next two years compared with last year’s findings. This shift in both relative and absolute terms away from concerns about the environment is unfolding despite the scientific outlook for the adverse future impacts of climate change. The UN Environment Programme’s Emissions Gap Report 2025 estimates that global temperatures are likely to exceed 1.5°C above pre-industrial levels within the coming decade.39 Extreme heat, drought, wildfires and other extreme weather events are likely to become more intense and frequent. While the consequences could heighten societal polarization and inequality,40 the pushback to climate mitigation efforts is increasingly evident. However, this pushback may turn out to be only temporary if, for example, political incentives change again or if significant technological and business breakthroughs in combating climate change impacts materialize. For now, the downward reprioritization of environmental risks is unfolding in a geopolitical landscape shaped by growing multipolarity and Peter Burdon, Unsplash protectionism. The Global Tipping Points Report 2025 warns that the potential for multilateral cooperation on environmental concerns is being weakened, as major powers prioritize sovereignty and national gain over collective action.41 Competition for resources is intensifying, and national security, including energy security, is deemed by many governments to be the newly leading driver of policy-making.42 Russia’s invasion of Ukraine in February 2022 underscored the vulnerabilities of energy interdependence and spurred new ambitions for self-sufficiency in Europe and elsewhere.43 While 2024 marked a record $2.1 trillion in low-carbon transition investments, growth in clean energy funding slowed compared to previous years.44 Momentum is now building towards an “all-of-the-above” global effort to increase energy supply, including an extended reliance on fossil-fuel extraction, in addition to renewable energy sources.45 This momentum could intensify into the medium term because of potentially soaring energy needs in the coming years. The rise of the middle classes in emerging markets will continue to be a key driver, as will the rapid buildout of AI infrastructure. By 2030–2035, data centres alone could consume up to 20% of global electricity, placing strain on already overburdened power grids.46 Local resistance is likely to mount, with sharply-rising energy prices already affecting some communities living in the vicinity of recently built data centres.47 The growing divergence between rising demand for energy on one hand, and climate change and associated social realities on the other, could come to a head in the coming years. Difficult, values- Global Risks Report 2026 38