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How to mitigate pressing global risks in Asia? Hear from the experts

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According to the latest Executive Opinion survey by the World Economic Forum, the most pressing global business risks among business leaders in Asia are economic downturn and talent shortage. Meanwhile, environmental risks are rarely considered among the top three risks by business leaders, making it a notable blind spot despite Asia being the hardest hit region by climate change. 1

With escalating uncertainties and no visible sight of reprieve, how can businesses approach opportunities with a well-thought-out and robust risk management strategy to stay resilient?

Experts from Marsh and Mercer Asia who specialise in economic and political risks, energy transition and human capital share their perspectives on the importance of adopting proactive measures to manage these risks.

Economic risks: Can your business survive the trade turmoil and political instability while driving growth?

The global business landscape saw a dramatic rise in trade restrictions, with almost 3,000 measures imposed in 2023, three times more than in 2019.2 The International Monetary Fund (IMF) estimates that increasing trade restrictions could cut economic output by an astonishing US$7.4 trillion.3  As the geoeconomic environment continues to fragment with greater political instability, it has a knock-on impact on companies in Asia. 

One of the examples was the Ukraine war in 2022. “The sanctions imposed on Russia and the trade-restrictive measures led to Russian companies defaulting on invoices for goods supplied by Asian companies,” said Mark Wong, Credit Specialties Leader at Marsh Asia. 

Wong also highlighted the Myanmar military coup in 2021, which left many organisations exposed to unpaid invoices, debts, and currency restrictions. He states, “Clients with Trade Credit and Political Risk Insurance in place mitigated losses and recovered outstanding debts while those without faced financial strains.”

Both risk transfer solutions support companies’ business continuity by protecting cash flow and safeguarding operations when venturing into new markets. Businesses with multinational operations should also monitor political events, economic events and security conditions to protect their investments. By leveraging intelligence tools like the World Risk Review, businesses can gain crucial insights into complex risks.    

How to leverage private market investment to mitigate global risks such as trade restrictions

In a similar vein, businesses can encourage governments to review regulations to encourage more capital investments from the private sector to create alternative trade corridors. Adeline Tan, Head of Investment at Mercer Asia, shared that such projects are long-tailed and require patient capital to incubate. Private investors are likely to be interested in financing trade corridors that can provide smooth logistics and transportation to allow goods to move easily between markets if there are established users and supportive regulations in place. Such financing can be used for building infrastructure or investing in businesses that provide essential services to importers and exporters, contributing directly to new levers for economic growth in the region. 

“Local government support is essential in helping private investors manage risks and ensure projects meet necessary standards. Clear regulations, enforcing fast permitting and timely approvals are crucial for ensuring that development projects proceed smoothly,” she added. 

To attract more investors, one promising financing model is to give private investors a share in specific assets such as equipment or real estate acquired through their investment. While this may limit participation to established firms with the right expertise, investors can still source such opportunities through specialist fund managers, who often leverage their industry knowledge and experience to take on more risks for greater control and greater pay-off from such projects. 

Labour shortage: Confronting Asia’s looming talent crisis

Asia is on the brink of unprecedented growth opportunities driven by advancements in artificial intelligence (AI). However, a significant challenge looms: a shortage of skilled talent. The issue is also compounded by a demographic shift in Asia marked by an ageing population and a growing millennial workforce, further driving the demand for new skills.

In Asia, while there is the promise of generative artificial intelligence (GenAI) delivering higher efficiency and productivity, only one out of three organisations adopted GenAI. While half of companies surveyed in 2024 acknowledged that GenAI has increased the need for continuous reskilling, the same Global Talent Trends report in 2025 shows that only 34% indicated that it has led to different skills needs.

This disparity highlights a significant gap: organisations still lack clarity on specific skills needed to fully optimise the human-machine potential in the future of work to boost workforce productivity.

“There is an urgent need to redesign jobs to be more engaging, integrate automation thoughtfully, and reskill employees for the evolving market,” says Lewis Garrad, Career Business Leader at Mercer Asia. In other words, organisations that excel in workforce planning will thrive, outpacing those relying solely on outsourced work.

An example of a successful skills project comes from Standard Chartered, which aims to become a skills-powered organisation. The bank is working closely with Mercer on a variety of initiatives, including retraining employees from declining ‘sunset jobs’ into high-demand ‘sunrise roles’. According to Standard Chartered, this program not only preserved jobs, but saved an estimated US$49,000 per employee in recruitment costs and increased retention.4

Environmental risks: Combating climate change risks through a dual approach of energy transition and climate adaptation 

Asia was identified as the world’s most impacted region by extreme weather and climate threats in 2023. Between 2014 and 2023, the region faced estimated economic losses from natural catastrophes totaling US$639 billion.5 Despite its significant economic impact, environmental risks were notably absent from the top-of-mind concerns among business leaders in Asia. 

“Climate adaptation is no longer an optional strategy, but a critical mandate for businesses in Asia,” urged Benjamin Chang, Energy & Power Leader at Marsh Asia. He continues, “However, navigating the complexity of the underlying science of climate risks is significant, and many businesses lack the capability to get meaningful insights from the data. As a result, many are challenged to build a strong climate adaptation business case for the investment required.”

To help businesses understand the risks associated with extreme weather events, Marsh Centre for Climate Adaptation and Resilience Excellence (CCARE) utilises best-in-class data and modelling capabilities to support organisations in assessing their vulnerabilities to climate risks and develop effective adaptation strategies. 

Chang sees that energy transition is fundamental in mitigating environmental risks and should go hand-in-hand with the adaptive measures. 

To this end, Marsh supported Dubai Electric and Water Authority (DEWA) on Mohammed bin Rashid Al Maktoum Solar Park which aimed at increasing renewable energy capacity and reducing reliance on fossil fuels. Upon its completion, the Solar Park will avoid more than 6.5 million tonnes of carbon emissions annually. In this project, Marsh assessed potential climate risks, existing levels of climate resilience, environmental impacts, financial uncertainties, and operational challenges and provided climate adaptation recommendations.

In the face of global economic shifts, workforce challenges, and climate risks, businesses in Asia must embrace innovative resilience strategies. Across domains, Marsh and Mercer Asia experts underscore a clear message: businesses must move beyond reactive measures and build long-term resilience amid growing global business risks. By investing in risk management, a future-ready workforce, and climate resilience, companies can thrive in an increasingly complex global economy.

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1 United Nations (2024), WMO report: Asia hit hardest by climate change and extreme weather, https://news.un.org/en/story/2024/04/1148886

2 International Monetary Fund (2024), High uncertainty and the unknown, High Uncertainty and the Unknown | IMF Annual Report 2024

3 International Monetary Fund (2023), The High Cost of Global Economic Fragmentation, https://www.imf.org/en/Blogs/Articles/2023/08/28/the-high-cost-of-global-economic-fragmentation

4 How Standard Chartered unlocked potential to get future-ready, Gloat

5 Swiss Re. How big is the protection gap from natural catastrophes where you are? https://www.swissre.com/risk-knowledge/mitigating-climate-risk/natcat-protection-gap-infographic.html#/region/Asia