Wednesday, May 26, 2021

"The WEF Global Risks Interconnections Map"

I was debating whether to post this because the author uses a weather/climate attribution for the 2011 Arab Spring uprisings that is not really true. I'm sure the folks at New England Complex Systems Institute meant well but, as just one example, Syria, the poster child of the of the climate > conflict story favored by the explainers and attributors of that time was brought to civil war, not by the drought that was going on but by Western governments exporting weapons from Libya to Syria (the ratlines) after the murder of Gaddafi. The amount of wheat on the Syrian market did not fall as much as some have portrayed, and with government-backed imports there was nothing that odd going on. It was after the war was started that wheat production was cut in half, and by 2015 the academics were calling out the specious claims:

We were keeping a pretty close eye on things and did not see what the fabulists were pitching. 

All that being said the graph is interesting

From Bond Vigilantes, May 25: 

A Must-See Graph for Bond Investors: The WEF Global Risks Interconnections Map

Summary: A few days ago, the summer version of the annual World Economic Forum was cancelled due to the worsening COVID-19 situation in Singapore. As a result, we may need to wait slightly longer for an update of the Global Risks Interconnections Map

As bond investors, it’s important that we can adequately price the underlying risks of an asset, considering the various non-financial risks that can impact the economic performance, which can in turn affect the value of an investment.

The map below illustrates how global risks are interconnected and brings to light why climate risk has emerged as the most important ESG factor for institutional investors. In short, a failure to solve the climate crisis affects investors in multiple ways.