Disclaimer: The information presented in this article was accurate to the best of our knowledge at the time of publication. We do not guarantee the continued accuracy of this information, as circumstances will change as the risk landscape evolves.
Imagine watching in real-time as your deepest worries come to pass. It’s been six months since the World Economic Forum (WEF) published their Global Risks Report 2025 – a comprehensive study of the global risks keeping experts up at night.
Six months on, and many of the Report’s key warnings have been borne out in a world fraught with turbulence and instability. As crises unfold, individual risks intertwine and develop into polycrises that centre on conflict, trade wars, and technology and polarisation.
During this time of fracture and uncertainty, private sector companies like Chelsea Group can offer multi-faceted solutions that help businesses, governments and civil society deal with the unfolding risk-landscape. Chelsea Group’s companies bring over two decades of experience addressing complex challenges in security, leadership, humanitarian staffing and life support, among other specialised services.
Here, we examine three high-risk scenarios identified in the Global Risks Report 2025, how they’re impacting the world now, and what governments, business and civil society can do about it.
About the Global Risks Report 2025
The Global Risks Report 2025 (the Report) defines a ‘global risk’ as “the possibility of the occurrence of an event or condition that, if it occurs, would negatively impact a significant proportion of global GDP, population or natural resources.”
Using data from over 900 stakeholders, the report categorises risks in immediate (2025), short- (two years) and long-term (10 years) views, giving decision-makers areas of focus and a clear view of impending threats.
This year, the Report shows a sharp decline in optimism among respondents, who represent various groupings drawn from academia, business, civil society, government, and international organisations. Luckily, these same experts offer suggestions on how humanity might face these challenges and mitigate their potential damage.
2025’s 3 high-risk scenarios that are turning into polycrises
The 2025-risk landscape is dominated by fears of geopolitical and climate crises. State-based armed conflict, extreme weather events and geoeconomic confrontation top the 2025 risks list, while the short- and long-term risks show increasing concern around mis- and disinformation, conflict and climate crisis.
Of course, none of these risks occur in a vacuum. Each risk affects and interacts with the others, driving polycrises that paint a bleak picture for humanity’s immediate and short-term future. The Report defines three likely and severe risk-scenarios that could affect humanity between 2025 and 2027:
- The geopolitical recession scenario
- The global economic downturn scenario
- The societal fragmentation scenario
Halfway through the year, we are already seeing how these scenarios are coming to life. As more and more risks become realities, the Report’s recommendations for greater cooperation, private and public sector partnerships, and building technological resilience becomes all the more urgent.
1. The geopolitical recession scenario
Grouping geoeconomic confrontation, cyber espionage and warfare, misinformation and disinformation, and state-based armed conflict together, this scenario shows the outcome of a world that cannot work together.
At the start of 2025, we were already seeing how deepening geopolitical and economic tensions are driving the decline of multilateralism and inter-state cooperation. Halfway through 2025, the rise of unilateralism is undeniable, and the impact of states failing to cooperate is felt in worsening humanitarian crises and conflicts, as can be seen in Ukraine, the Middle East and Sudan.
“The world instead becomes more adversarial, with conflicts ending only via battlefield, winner-takes-all victories and not through negotiated, multistakeholder peace agreements.” – Global Risks Report 2025.
From multi-to unilateralism
The number and severity of state-based armed conflicts increases tensions, regionally and globally, and increases the likelihood of even more conflict. Cyber espionage and warfare, misinformation and disinformation, and geoeconomic confrontation exacerbate conflicts and lead to distrust between stakeholders.
At the same time, there’s a loss of faith in the ability of multilateral international organisations, such as the United Nations, to prevent or resolve conflicts. This loss of faith and support allows for unilateral moves by organisations and states, adding more complexity, fragmentation and instability.
The threat of state-based armed conflict also shifts internal priorities within states, which is leading to more and worsening humanitarian crises as resources are redirected. The withdrawals from and reductions in commitments to multilateral institutions are also shrinking budgets for humanitarian aid, as countries scramble to redefine their positions on the world stage.
Escalation in 2025
The Report identifies several pathways of escalation, but focuses on two key cross-border conflicts: the Russian invasion of Ukraine and multi-faceted conflicts in the Middle East. In particular, the Report mentions the risk of shifting toward a full-scale Iran-Isreal war over the next two years, which would in turn further embroil the United States in regional Middle Eastern conflicts.
Fast forward to June, and the shift has already happened. One might be forgiven for feeling a sense of whiplash in the aftermath of the ‘12 Day War’ between Iran and Isreal, who are currently in a fragile state of ceasefire brokered by the US after they bombed Iran’s key nuclear sites. As these conflicts escalate and draw in other states and economies, instability spreads and national security considerations override cooperation among states.
The Russian war on Ukraine is stretching into its third year. Even though Russia and Ukraine are currently in direct peace talks, progress is glacial and military action continues to wreak devastation.
The Report predicts that “the world instead becomes more adversarial, with conflicts ending only via battlefield, winner-takes-all victories and not through negotiated, multistakeholder peace agreements.”
How to slow down geopolitical recession
The Report suggests three actions for slowing down the risk of geopolitical recession:
- Supporting multilateral institutions through public, private and civil society engagement in shared solutions.
- Expanding the role of regional organisations, such as the African Union, in managing tensions.
- Diversifying supply chains and investing in risk foresight and management to increase economic resilience.
2. The global economic downturn scenario
This second risk-scenario groups geoeconomic confrontation, cyber espionage and warfare, misinformation and disinformation to show how the “supercharged economic tensions” of today are threatening to turn into an economic downturn.
Trade wars and the greater economic isolationism, alongside geopolitical recession, are likely to exacerbate global economic instability. We are already seeing protectionist policies and a decline in global trade, which could further damage both economic and non-economic relationships between countries.
The threats of blanket tariffs and trade wars
The Report leads with this statement:
“In a worst-case scenario for tariff escalation over the next two years, governments would decide to impose tariffs not only on those countries/blocs imposing tariffs on them, but instead on all their trading partners. This widespread imposition of across-the-board tariffs globally would lead to a substantial contraction in global trade.” – Global Risks Report 2025
In April, the World Trade Organization (WTO) reduced the 2025 trade growth forecast in response to blanket tariffs imposed by the US on all imports. Expected growth was cut to 2.3%. In its 2025 Global Economic Prospects Report, the World Bank attributes slow-downs in most economies to a “sharp increase in tariffs and the ensuring uncertainty”.
Trade wars started at the beginning of the year are ongoing, threatening to dismantle current global political economic order. According to a Reuters analysis published in May, US trade wars have cost companies over $34 billion in lost sales and higher costs.
The United State recently added a 50% tariff on foreign steel and aluminium imports.
As cyber espionage and mis- and disinformation increase distrust between nations, geoeconomic confrontation becomes a fulcrum of greater global fragmentation, creating thornier challenges to cooperation and multilateralism.
De-escalation requires more cooperation
To forestall the economic downturn that is all but guaranteed if a renewed global trade war breaks out, the Report emphasises the need for:
- Supporting multilateralism, especially through global treaties and agreements,
- Developing strategic relationships in the form of regional or bilateral ties with countries, and
- Strengthening domestic economic resilience.
3. The societal fragmentation scenario
This risk-scenario combines societal polarisation, misinformation and disinformation, and censorship and surveillance to show how technological advances amidst great
er global distrust can fracture communities and weaken resilience.
As the Report contends, “societal fractures are central to the overall risks landscape.” With increased social media use, the growing digital footprint of citizens, advances in computing power and strides in AI and GenAI, societies become more vulnerable to fragmentation, exploitation and disenfranchisement.
Vulnerability to surveillance and data-mining
Greater digitalisation could expose people to more surveillance. Governments, companies, and other actors can more easily monitor citizens through digital tracking methods and reach deeper into their lives to exploit digital and social vulnerabilities.
Mis- and disinformation breeding distrust
Because the technology is becoming so user-friendly and accessible, AI can (and in many cases, is) being used to flood digital platforms with divisive misinformation and disinformation. Algorithms then learn from user activity and feed into their biases, exacerbating existing political and societal polarisation and pushing users to the extremes.
As AI and Gen AI become easier to use and access, the proliferation of mis- and disinformation is intensifying divisions and distrust.
In such a context where people are primed for scepticism, the damage that accidental and intentional algorithmic bias can deal is multiplied. A combination of low-quality content and lack of trust makes individuals more vulnerable to propaganda of all types. As citizens become more polarised around key issues, societies become more fragmented and fragile to other key risks.
Building digital resilience
To counter societal fragmentation, the Report suggests
- Expanding upskilling for people building and using automated algorithms, so that creators and users can recognise and mitigate bias.
- Boosting funding for digital literacy, to reduce the risk and prepare users against potential technological abuses, such as cyber espionage.
- Improving accountability and transparency frameworks to improve governance frameworks and ensure compliance.
“To prevent a downward spiral in which citizens worldwide will be worse off than before, ultimately there is no option other than to find avenues for dialogue and collaboration.” – Global Risks Report 2025
Forging new ways to manage risk together
The Global Risk Report 2025 came out in January. A mere six months later, we’re already seeing the impact of those risks turning into realities.
In this bleak landscape, new relationships and parallel multilateral networks are sorely needed to mitigate and manage risks. Multilateral bodies, governments, regional alliances and private companies need to find ways to enable and continue the work of addressing risk factors and building a more resilient global community.
The Chelsea Group’s portfolio of companies offers varied avenues of collaboration that can address complex and far-reaching risks. From private security and turnkey life support to logistics and staffing solutions, water purification and leadership training, we are ready to work with others to build more resilient societies.
Contact the Chelsea Group to learn more about our integrated solutions.
