Risk managers told to prepare for years of disruptive threats

Risk managers at businesses across the globe have been told they need to understand the threats grassroot movements, strikes and civil commotion will pose in the year ahead. In its annual  Malicious Risk Report, strategic malicious risk advisors, CHC Global, warned the risks will likely disrupt businesses and affect organisational resilience for months, if not years, to come.

The report delivers analysis of recent developments including extremism, the malicious use of technology and violent protest movements domestically and across the world. It warned even well-established industries in stable democracies must be prepared for the possible impact of being targeted by increasingly disruptive and potentially violent activism.

“Businesses are already witnessing, either directly or indirectly, the impact of protest movements and civil unrest on their operations,”  the report stated. “This trend is expected to grow during 2023. Traditionally resilient states are not immune to instability. In the UK alone, there have been at least 70 instances of strike action since June 2022, causing disruption over multiple days and there’s more planned for February and March.

“Activist groups including Extinction Rebellion, Insulate Britain and Just Stop Oil have blocked roads, dug and occupied tunnels and glued themselves to vehicles and buildings as acts of civil unrest to cause disruption that affects industry broadly. Equally, climate-related protests in the Netherlands caused significant disruption in 2022.”

It added: “In a global economy, businesses need to understand the impact that these protests, whether domestic or international, can have on their operations. With global market conditions already affecting the cost of living, organisations can expect to see more activism in the form of protests, strikes, and boycotts affecting their operations, directly or indirectly, for the foreseeable future.”

Of the movements that have turned violent, the report said a large proportion have been driven by resentment against global economic instability and rapidly rising inflation, and particularly by perceived government failure to control it. There have been mass protests in Sri Lanka, beginning in March 2022, in response to perceived government mismanagement of the economy which led to a shortage of resources, drastic inflation, and near economic collapse.

Other significant areas of malicious risk identified in the report include:

  • Strategic competition: In a world of increasing economic integration, the destabilisation of certain regions caused by the competition between powerful states can have far-reaching consequences. The conflict in Ukraine has already shown how concentrated military aggression by a regional power can impact economies globally, with fallout from global sanctions as well as increased competition for natural resources. Increasing tensions in the South China Sea also have the potential to significantly destabilise global supply chains and economic stability, as well as cause civil and political unrest.
  • Expansion of non-state armed group activity: The threat from Islamic State and Al Qaeda remains high, with dominant centres of activity continuing to develop in vulnerable African states. In turn, this triggers further economic and geopolitical insecurity and provides additional opportunities for criminal activity. The expansion of Mexican cartel influence over neighbouring states, such as Guatemala, is likewise driving wider regional instability across Central America.
  • Exploitation of available technology: The boundaries between many threats are blurring, driven significantly by the exploitation of technology. The number and scale of cyber-attacks on governments and commercial organisation in the last year are noteworthy, with an increased level of activity related to the Russia/Ukraine conflict. Alongside governments, malicious cyber activity also targeted infrastructure and high-profile commercial entities in countries in North America, Europe, and East Asia. Moreover, technology is increasingly being exploited for the development of homemade weapons, such as improvised drones and 3D-printed firearms.

Chris Holt, MBE, Chief Executive of CHC Global said: “By having a clearer understanding of the risks to an organisation from malicious perpetrators, risk managers and CEOs can start to consider how these might have far-reaching consequences for their organisation. These risks are not just financial but can also impact operations, reputations, supply chains, and operatives who work in or close to high-risk areas. This report provides an overview of how global events can impact organisations, providing a deep analysis to help organisations mitigate the risks.”

Of the movements that have turned violent, the report said a large proportion have been driven by resentment against global economic instability and rapidly rising inflation, and particularly by perceived government failure to control it.