Cyber attacks, wars, inflation as the biggest business risks

Every year, the Funk Global Risk Consensus summarizes the most important findings of leading risk studies and provides a comprehensive overview of the most pressing challenges for companies. The latest edition does not yet include the current global trade conflict because it has only recently emerged and is therefore not yet included in the underlying study results, which are based on surveys and assessments from the previous year. The Funk Global Risk Consensus is published by the Funk Group, a consultancy firm for risk, pension and insurance management. 

Rank 1: Cyber risks

Cyber risks will continue to be the number one corporate risk in 2025. The increasing cyber risks no longer only affect large corporations, but also medium-sized companies, public authorities and private individuals. The increased use of artificial intelligence and deepfake technologies is making cyber attacks more sophisticated and harder to detect. In particular, ransomware attacks with double extortion, in which stolen data is published, pose a growing threat. Critical infrastructures such as hospitals, water suppliers and energy networks are increasingly being targeted by state-backed cyber groups. States such as Russia, China and North Korea are increasingly using digital attacks and computer-based sabotage as an instrument of geopolitical conflict. In light of these developments, regulatory requirements such as the EU NIS2 Directive are tightening the demands on companies. To meet these challenges, robust security strategies, zero-trust architectures, regular employee training and emergency plans are essential.

Rank 2: Inflation

Although global inflation has eased, it remains a key economic challenge. In 2025, high wage costs, geopolitical uncertainties and volatile monetary policy will continue to influence inflation. Despite substantial interest rate hikes by central banks, inflation will remain high, particularly for food, energy and services. Geopolitical tensions, such as the ongoing war in Ukraine and the conflict in the Middle East, are putting pressure on global supply chains and continuing to drive up commodity prices. Companies are faced with rising production costs and pressure to adapt due to new environmental and ESG requirements. The development of monetary policy remains unclear, as further interest rate cuts could entail risks for inflation.

Rank 3: Interstate conflicts and armed conflicts

Increasing geopolitical tensions and military conflicts, including the war in Ukraine, the situation in the Middle East and tensions between China and Taiwan, are affecting the global economy and supply chains. Sanctions, export bans and attacks on infrastructure are making energy and raw materials more expensive, increasing inflation and uncertainty. Rising defense spending is straining budgets, while hybrid warfare is creating new risks through cyberattacks and disinformation. Companies need to protect themselves through diversified supply chains and forward-looking strategies, as political changes can also lead to economic isolation, trade conflicts and market barriers.

Rank 4: Extreme weather events

Extreme weather events are increasing in frequency and intensity worldwide, causing massive economic and social damage. Record temperatures, droughts and floods are increasingly affecting regions that were previously hardly affected, impacting agriculture, infrastructure and supply systems. Notable disasters included hurricanes Beryl, Helene and Milton in and flooding in Central Europe. Prolonged rainfall last September/October (particularly affecting Germany, Austria, Switzerland and Spain) led to flooding and numerous deaths. Companies are facing increasing risks due to production losses, falling labor productivity and stricter climate protection requirements, which increase costs. Resilient supply chains, sustainable production methods and comprehensive disaster preparedness are essential to minimize climate-related risks.

Rank 5: Changing regulations

Since 2022, changing regulations have once again been among the top 5 corporate risks and present companies with growing challenges. These include, in particular, new environmental and data protection directives in Europe. For example, the EU Supply Chain Directive (CSRD) and the Deforestation Regulation (EUDR) require stricter monitoring of suppliers, as violations can result in severe penalties. Small and medium-sized companies in particular are facing growing challenges here, as they are forced to build up additional resources or staff units that large companies already have at their disposal. At the same time, regulatory uncertainties in the USA and additional trade barriers are increasing costs and delays. Companies must respond to the constantly changing framework conditions with flexible compliance strategies, active monitoring and industry solutions.

Source and further information: Radio group