Also: Energy pricing, Pakistan bailout, and Ukraine counteroffensive.
Good morning.
It’s become almost a cliche to say these are challenging times for business. Black swans seem to swoop in from every direction on a regular basis—pandemic, fire, drought, social unrest, war. Resilience has replaced efficiency as the watchword of the day.
But curmudgeons understandably ask: wasn’t it always this way?
Well, no, it wasn’t. A new report out this morning from OnSolve, which analyzed a database of more than 14 million events over the last two years, puts some numbers on the change. From 2020 to mid-2022, the company calculates:
• Shooting risks are up 193%
• Transportation-related risks are up 146%
• Crime risks are up 141%
• Fire risks are up 118%
• Infrastructure and technology risks are up 111%
• National security events are up 48%
• Extreme weather events are up 47%
• Civil unrest is up 9%
The only good news comes in public health (down 39%).
Why? OnSolve CEO Mark Herrington, who visited the Fortune offices last week, says: “COVID was the focus for a very long time. But now what you are starting to see is that crime and violence, transportation and logistics, the whole social infrastructure, has been incredibly stressed. You see it in every category. It’s reflective of the macro environment we are operating in, politically, socially, and the stress of the pandemic.” And then of course, there is climate. Drawing causal connections between climate change and fire or weather events is a tricky business. But clearly, something is going on.
The implications for business are significant. Risk is becoming increasingly complex, which means not just every CEO, but every CFO, every corporate general Ccunsel, and every board member needs to broaden their skill set. These are, indeed, challenging times.
Separately, in the geopolitical risk category, a report out yesterday from the U.S.-China Business Council finds that optimism about the future business outlook in China among its members has dropped to a record low because of China’s COVID-19 containment strategy and deteriorating U.S.-China relations. You can read the full report here.
Other news below.
Alan Murray
@alansmurray
alan.murray@fortune.com
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Energy pricing
Europe’s leaders are contemplating changes to how electricity is priced. Currently, prices are based on a mix of all energy sources, so sky-high natural gas prices are pushing up the price of power coming from renewable sources, for example. European Commission President Ursula von der Leyen said a proposal for “an emergency intervention and a structural reform of the electricity market” was coming soon. Wall Street Journal
Pakistan bailout
The International Monetary Fund is sending $1.1 billion to Karachi, to help Pakistan avoid default in the wake of its catastrophic floods and generally precarious economic situation. Prime Minister Shehbaz Sharif had to first introduce austerity measures that could prove perilous for his government. The IMF had previously paused plans for a $7 billion bailout due to the former government’s unwillingness to introduce spending cuts. Financial Times
Ukraine counteroffensive
Ukraine’s long-awaited counteroffensive in the country’s south appears to have finally begun in earnest, with Kyiv claiming breakthroughs in the province of Kherson. It remains to be seen if this development will break the stalemate that has characterized the last couple months of the war; at this point, Ukraine and Russia are giving contradictory accounts of its success thus far. Guardian
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The shape of consumer spending How might consumer companies remain agile and stay ahead of a dynamically evolving environment? Deloitte discusses how persisting inflation, rising interest rates, ongoing supply-chain disruption, and slowing economic growth might shape already altered consumer demand and preferences globally. Explore the data
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