Global temperature change is the top extreme risk facing investors, followed by global trade collapse and cyberwarfare, according to the Thinking Ahead Institute's Extreme Risks 2019 report released Monday.
The ranking of the top 15 extreme risks includes first-time issues biodiversity collapse, abandonment of fiat money, and cyberwarfare. Topics dropped out of the top 15 this year are deflation, insurance crisis and terrorism.
Issues moving up in the rankings this year were infrastructure failure (up eight places), global trade collapse (up three) and currency crisis (up three). Risks moving down on the list compared with 2013 include stagnation (down eight places) and resource scarcity (down three places).
Global temperature change became the highest ranked risk due to a higher likelihood coupled with significant impact, which in the extreme would mean mass extinction.
The institute, part of Willis Towers Watson Investments' Thinking Ahead Group, categorizes rare events that could have a high impact on global economic growth and asset returns.
"Our extreme risks ranking has seen the emergence of a general trend, with financial risks falling down the rankings and non-financial extreme risks growing in significance," said Tim Hodgson, head of the Thinking Ahead Group, in a statement.
Mr. Hodgson added extreme events are "much more likely than previously thought," and investors should be sensitive to early warning signs, and be ready to adapt while preparing for the worst.