Long-term risks

Long-term risks are existing risks associated with current trends that are anticipated to increase; or risks currently not material, but that could develop into major areas of concern for a business, or for society as a whole.

The most significant long-term risks we observe are:

The effect on business of increased instability due to a rise in national sentiment, increased geo-political tensions and failure of national and supranational governance. This could result in:

• Dwindling support for free trade relationships and flows of capital
• Potential differential legislation, resulting in regional competition and protectionist measures
• Insufficient structural reforms in emerging and mature economies

The continued development of digital technology poses a threat to business and reputation and could lead to:

• Business value chain disruption/destruction
• Cybercrime
• Concerns over privacy and the concentration of the influence and control over intelligence
• More stringent legal and regulatory requirements

The need to listen and engage with an ever-widening field of stakeholders in the area of environmental and corporate social responsibility, requiring extra attention to:

• Transparency on, for example, carbon footprint and renewable energy
• Social impact assessment of a company’s activities
• Concerns over fair trade and under-age labor
• Concerns over tax avoidance by large corporations
• A persistent negative perception of the role of global corporations in society

Not being able to implement an ambitious sustainability strategy associated with economic value creation, tailored to markets with different levels of maturity. This could be caused by:

• Protectionism and a lack of global consensus triggering inter-regional competition
• The view that economic growth and sustainability are not mutually exclusive does not prevail
• Lack of a coordinated response to climate change

The risk of an acceleration in the emergence of new technologies in general, with the potential to:

• Disrupt existing business value chains
• Change the way in which our products are applied
• Force the re-engineering of supply chains
• Introduce changing working practices

The risk of increasing public concern over specific substances and their environmental impact, leading to:

• More strict classification of hazardous substances
• A ban on, or a reduction in, the use of plastics/synthetic polymers
• An accelerated phasing out of fossil fuels