Further, investors noted a heightened attention during COVID‑19 to severe, systemic risks related to exogenous events, and pointed to climate change as the next such challenge on the horizon. Some investors stressed that climate change will further accelerate other systemic risks (e.g., biodiversity loss, economic inequality) and suggested that it has the power to disrupt traditional notions of corporate preparedness. In other words, investors are looking beyond the basics of climate risk in the supply chain. To be successful going forward, these investors said companies will need to be more future‑oriented. They will need to integrate climate and other sustainability risks into the business strategy, and to focus on having the culture, values and people in place to continually look forward and build resilience.
Business model disruption more broadly was the second‑most‑cited key threat, chosen by nearly half of investors. Most of these investors highlighted the need for companies to innovate and disrupt in order to adapt to the rapidly shifting business context and meet changing stakeholder needs. Investors pointed to extensive sources of disruption and pressure on business models, including accelerating technology change, the transition to a low‑carbon economy, regulatory changes, new entrants and the broad impacts of the pandemic on work, travel and consumption.
It’ s not surprising that close on the heels of business model disruption, 30% of investors identified changing customer demands and expectations as a top threat. Many of them highlighted that this goes beyond changing customer demands to the changing demands of stakeholders more broadly. And those demands span numerous dimensions, from expectations around how technology can enable new ways of working and consuming to how businesses impact the environment, communities, privacy, politics and culture.