KPMG has in its latest report outlined the three biggest risks for businesses right now, which may impact operations in 2024 and near future.

Fighting an uphill battle to achieve long-term sustainability, international organizations are witnessing a slow-down in growth.

Through its latest report, “Top risks forecast: Bottom lines for business in 2024 and beyond,” KPMG aims to issue a caution on the multifaceted, complex challenges that organizations operating across boundaries and looking to grow globally must overcome in a time of increasing divergence on regulation, conflict, technological advancement, and political uncertainty.

It highlights the three biggest risks for businesses right now, known as ‘bottom lines’, which are anticipated to impact operations in 2024 and the near future:

*Trade policy restrictions: Global trade restrictions have been on the rise, with approximately 3,000 restrictions imposed, nearly tripling since 2019.

This trend of protectionist trade policies poses challenges for organizations operating in international markets. Such restrictions can create barriers and hinder economic growth, affecting supply chains and market access. Organizations should be prepared to navigate these trade policy restrictions and explore alternative strategies to mitigate potential disruptions.

*Vulnerability calling for operational resilience: The geopolitical landscape is characterized by increasing vulnerability, driven by various factors such as rapid technological advancements, climate change, and geopolitical tensions.

In 2023, a staggering 91 countries were involved in some form of conflict, a significant increase from 58 in 2008.

This escalation of conflict has a profound impact on the global economy, with conflict estimated to have a 12.9 percent impact on global GDP.

According to KPMG, to mitigate the risks associated with vulnerability, organizations must prioritize operational resilience.

This involves implementing proactive risk management practices, conducting scenario planning, diversifying supply chains, and strengthening cybersecurity measures, it stated.

*AI Governance Gaps: AI has become a transformative force across industries, with investment in AI increasing more than fivefold between 2013 and 2023.

While AI presents immense opportunities, it also brings about governance gaps that organizations must address. Ethical and responsible AI deployment is crucial to maintain trust among stakeholders. Organizations should prioritize transparency, accountability, and fairness in their AI systems to mitigate potential risks and ensure its responsible integration into their operations.

Dr Rasheed Al Qenae, the Chairman of KPMG Middle East, South Asia, and Caspian (Mesac) region and Managing Partner, KPMG in Kuwait, said: “Although a series of global risks and events such as the Covid-19 pandemic have hardened leaders, more unaddressed challenges remain in different directions – be they as geopolitical uncertainties, complex regulations, climate change, and uneven adoption of artificial intelligence (AI) globally,” talking about the current risk landscape.”

A standout finding, the Energy and Natural Resources sector emerged as the ‘most exposed’ to risks, helmed by volatility in the Middle East and the increasing politicization of access to minerals and crucial resources.

The Infrastructure and Financial Services industries were second and third, respectively, considering both sectors are at risk of gaps in AI and growing economic headwinds.

These findings were imminent in the heat map developed by KPMG professionals after looking at the biggest risks on individual key industries.