New EXposure Trends Report outlines key risk strategies to address geopolitical shifts, technological acceleration, human capital and climate challenges
Brussels, 12 May 2025 – FERMA has today released its inaugural NEXT (New EXposure Trends) Report, which warns that short-term thinking and cognitive biases at all levels are leaving companies and governments highly vulnerable to the widespread and long-lasting impacts of emerging risk trends such as geopolitical shifts and climate change. The report provides a series of tools to help overcome these limitations and build more resilient organisations and societies.
Produced by FERMA’s Foresight Committee[i], the NEXT Report highlights several systemic barriers within organisations and governments that hinder long-term risk management, leading to reactive rather than proactive approaches. These barriers include the prioritisation of immediate gains over future resilience, which is driven by multiple factors including market pressures, regulatory constraints, and operational priorities.
Behavioural economics, including biases such as status quo bias, optimism bias, and groupthink, also contribute to resistance to change, according to the report, as well as an overestimation of the ability of companies to manage risk, and a tendency to prioritise consensus over critical evaluation – all serving to reinforce the short-term organisational focus.
Drawing on expert insights from across a broad spectrum of fields both inside and outside of the risk management arena, the report identifies four medium-to-long-term risks with the greatest potential to disrupt European businesses. These are:
- Geopolitical Shifts – Significant transformations in the global political landscape are creating high levels of uncertainty and instability that will affect trade, investment, and supply chains.
- Technological Acceleration – Rapid advancements in technologies such as AI, automation, and biotechnology are revolutionising businesses and society, but also create risks such as job displacement, ethical dilemmas, and reduced European competitiveness.
- Human Capital – Attracting, developing, and retaining talent is becoming increasingly challenging, further complicated by evolving skill requirements and changing employee expectations.
- Climate Change – A shifting climate presents major risks to businesses, the insurance industry, and society, while also increasing the likelihood of legal actions against corporations in the EU.
Against this volatile and disruptive backdrop, the NEXT Report stresses that risk managers must establish a longer-term risk horizon within their organisations and actively counter cognitive biases to strengthen resilience at both the company and societal levels. The report proposes several complementary strategies for developing risk frameworks to address emerging risks.
At the core of this is the adoption of a strategic foresight approach, which enables companies to extend their risk horizon. This approach involves applying techniques such as scenario planning, horizon scanning and the futures wheel—a method used to understand the potential ripple effects of specific trends. These tools help organisations explore how risks may evolve and interact under various circumstances.
Additional techniques outlined in the report include fostering a culture of long-term thinking to promote proactive risk management; redefining performance metrics to incorporate resilience and adaptation measures; and leverage technologies such as AI-driven analytics and predictive modelling.
The study also encourages organisations to embrace more holistic thinking to better recognise the increasingly interconnected and interdependent nature of risk. Further, by identifying key factors influencing each of these longer-term trends, it enables risk managers to develop credible scenarios adapted to the specific dynamics of their respective organisations.
Commenting on the report, Philippe Cotelle, FERMA Board member and chair of the Foresight Committee, added: “Risk managers are fully aware of the limitations caused by short-term thinking and a narrow focus on known risks, but often lack the capabilities or support needed to address emerging threats. Through the NEXT Report, FERMA has identified the key medium-to-long-term risks facing European organisations, and provided a series of strategic foresight methodologies and tools that can be combined to overcome these limitations and help build a culture of long-term thinking to manage the interconnected and complex challenges of a constantly shifting risk horizon. FERMA’s objective is to position risk managers as leaders in foresight and enablers of strategic opportunities.”
Charlotte Hedemark, President of FERMA, added: “By their nature, emerging risks provide sufficient time for companies to identify, monitor, and mitigate the associated threats. However, short-termism and cognitive biases embedded in corporate and governmental decision-making mean that we remain unprepared for these high-probability, high-impact exposures. It is critical that companies and institutions adopt a more proactive, long-term approach to risk management to bolster resilience and successfully navigate an increasingly volatile global landscape.”