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Strategic Risk in a
Fragmented World
Foresight for Climate, Geopolitics and
Emerging Challenges
Shaun Adam
CGM Directors’ Masterclass
25 September 2026
Global Risk Report
Different horizons, different priorities
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WEF Global Risks Report 2026. Survey perceptions, not company loss probabilities.
2026
Immediate crisis trigger
Geoeconomic
confrontation
2028
Two-year severity
Geoeconomic
confrontation
2036
Ten-year severity
Extreme weather
events
Both horizons belong in today’s investment decisions
How the Global Risks Report is produced
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WEF Global Risks Report 2026, methodology overview and Appendix B
Global perceptions
1,302 respondents assess 33 global risks
National concerns
11,000+ business leaders across 116 economies
Expert analysis
Interviews and workshops explore implications
Five forces shape corporate exposure
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External force | Corporate exposure |
Geopolitical fragmentation | Markets, suppliers and investment locations….Geoeconomics |
Climate disruption | Sites, water, power and transport |
Economic volatility | Demand, margins and financing |
Technology acceleration | Competition, AI reliance and cyber exposure |
Security and public trust | People, critical services and crisis decisions |
Geoeconomics is one particularly important way government decisions reach the company.
Emerging Trends
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Different suppliers can share the same vulnerability
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3 suppliers
One shared port, refiner
or power network
Would our backup fail for the same reason?
- Geopolitical Considerations Undermined by Environmental Conditions
An energy backup still depended on water
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Uniper and the Rhine, 2022. Reuters, 4 August 2022.
The pressure
Scarce Russian gas increased the need for alternatives. 2022, Uniper the 80Bil revenue company opted to restart the 875 MW coal plant, needed coal.
The response
Coal became part of Germany’s energy contingency
The suprise constraint
Low Rhine water limited coal deliveries to power plants.The transport dependency is the surprising part.
.
What dependency does our alternative introduce?
- Environmental Change Can Affect Geopolitical Considerations
Melting Arctic ice changes strategic interests
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NATO Arctic security. Danish Ministry of Defence, 27 January 2025.
Longer seasonal access
Adds to competition over routes, resources and security
USD 2 Bil.
Denmark’s January 2025
Arctic and North Atlantic package
The geography stays. Its strategic value changes.
Today’s investment can face decades of exposure
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Illustrative questions for long-term investors
Access today
Can we obtain the site,
equipment and approvals?
Consider trade restrictions and supply availability.
Reliability over its life
Can it operate through
heat, drought and repairs?
Consider water, power and replacement capacity.
Foresight and Resilience
A safe factory needs a functioning community
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Conceptual illustration of shared infrastructure
People who can reach work
Reliable water and power
Usable transport and communications
why community resilience and shared infrastructure can be business continuity investments. Compare costs with the interruption they help avoid.
Foresight and Resilience
Geopolitical Fragmentation and Issues South East Asia
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Geopolitical Fragmentation leading to rise in Geoeconomics
What is Geoeconomics? - the toolbox of economic instruments used to achieve geopolitical objectives.
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From Interdependence to Strategic Rivalry
1990s‑2000s: Interdependence as Stabiliser
Supply‑chain integration reduced friction, creating a mutual‑benefit paradigm.
2010s‑2020: Vulnerability Narrative (COVID‑19)
Pandemic exposed over‑reliance on single‑source inputs, prompting resilience debates.
2020‑2026: De‑risking, Resilience, Decoupling
Policy drives diversification, stockpiling, and selective disengagement from rival blocs.
Region‑Specific Vocabularies
EU uses ‘de‑risking’; US emphasises ‘resilient supply chains’, reflecting divergent strategic cultures.
Southeast Asia - Regional issues become business questions
Where each issue could enter the company?
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Illustrative exposure map. It assigns no probabilities to conflict or disruption.
Issue to examine | Question for risk planning and foresight thinking |
US–China competition | Which inputs depend on export permissions? US–China competition illustrates why supplier nationality alone is an incomplete test. |
Taiwan-related disruption | Which products lack qualified chip alternatives? |
South China Sea or route disruption | Which shipments have usable alternative routes? |
Myanmar-linked criminal networks | Where could fraud or trafficking reach us? |
Others – Korean Peninsular, India-China, Middle East, Ukraine, Straits of Hormuz, etc.
1. US–China competition can reshape supplier choices
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WEF Global Risks Report 2026. Hypothetical corporate application.
A new assembly location
may still depend on the
same controlled inputs
Imagine relocating assembly while keeping the same controlled equipment and upstream materials: some dependencies remain.
Eg. With new export controls on critical minerals, supply concentration risks become reality.
See Trump – Xi Summit in DC.
China dominates rare earth processing
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IEA, 2025. Shares of 2024 production. Magnet rare earths and NdFeB magnets.
A different mine may still rely on the same refiner
2. South China Sea
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I.
Before and after satellite images of Mischief Reef /artificial islands in the Spratlys, spanning 1,380 acres) in 2004, top, and 2022, bottom. Source: Maxar / Business Insider
30 % of World Trade Passes Through SCS: Key energy, raw‑material, and consumer‑goods shipments traverse this contested waterway.
Overlapping Claims (China, Vietnam, Philippines, etc.): Competing sovereignty assertions generate legal and operational uncertainty.
Eg. 2026 Cost of Closure: ≈ $65 M/Week Rerouting: Alternative routes via the Cape of Good Hope increase fuel, time, and insurance expense
Board Considerations - Maritime disruption can reach working capital
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Illustrative business impact of a disrupted shipping route
Operations
Delivery dates slip and production buffers shrink
Finance
More cash stays tied up in stock and transit
Recovery
Alternative routes need capacity and usable ports
How long can we operate before cash or stock runs short?
3. Taiwan exposure depends on substitutability
TSMC > 60 % Global Foundry Capacity
Taiwan’s leading foundry supplies the majority of advanced nodes for worldwide OEMs.
U.S.–Taiwan $560 bn Cap‑Ex (2026)
Bilateral investment plan to reinforce chip ecosystem and strategic resilience.
China’s Military Pressure in Taiwan Strait
Increasing drills and coercive tactics raise the risk of inadvertent escalation.
Potential Global Shock if Conflict Erupts
Supply‑chain disruptions could curtail 30 % of worldwide electronics output.
Taiwan is the epicenter where geoeconomics and security collide most dangerously. However, China views reunification as a central goal, with military exercises steadily expanding around the island. A conflict would not just be a regional war; it would be an immediate global economic shock.
Board Considerations - Taiwan exposure depends on substitutability
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Hypothetical interruption test. No conflict probability or loss estimate assigned.
If a critical chip becomes unavailable,
what can we actually substitute?
Available stock
How long can current production continue?
Qualified alternative
Has the replacement passed testing?
Recovery time
How long would redesign and approval take?
A typical custom chip design (ASIC) takes 2 to 3 years from initial concept to a finished physical chip.
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Image Source: The United Nations Population Fund
The countries that are always considered part of APAC are Australia, Bangladesh, Brunei, Cambodia, China, Cook Islands, Fiji, India, Indonesia, Japan, Kiribati, Laos, Malaysia, Maldives, Marshall Islands, Micronesia, Mongolia, Myanmar, Nepal, New Caledonia, New Zealand, Niue, North Korea, Pakistan, Palau, Papua New Guinea, Philippines, Singapore, Solomon Islands, South Korea, Sri Lanka, Thailand, Timor Leste, Tonga, Tuvalu and Vietnam.
4. Myanmar Conflict: Scam networks connect
human insecurity to business risk
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OHCHR, August 2023. Historical estimate, not a 2026 headcount.
At least 120,000
People who force to commit online scamming
in Myanmar, according to sources cited by OHCHR in 2023. Latest estimates show the scale is enormous: $40 billion per year generated by scam networks in Southeast Asia.
Climate Refugees- Internally Displaced Persons (IDPs): Approximately 4 million people are displaced within Myanmar due to ongoing civil conflict and disaster shocks.
Sources and further reading
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Sources checked 23 September 2026. Historical cases retain their original dates.
Global outlook
WEF Global Risks Report 2026
Key findings and methodology
Foresight
GCSP Strategic Anticipation
Climate and geopolitics
Reuters on Uniper, 2022
NATO and Danish Defence Ministry
Corporate and regional cases
Intel, 2011; IEA, 2025
OHCHR, 2023; TSMC, January 2026
Three questions for the board
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What could stop us?
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Would our backup survive?
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Who acts when the warning comes?
What would stop in your company first?
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Tomorrow morning, you receive an alert: commercial transit through the Strait of Malacca has been suspended following a major security incident. There is no confirmed reopening date.