70% of global business leaders report rising risk exposure amid AI, geopolitical disruptions: KPMG

New Delhi [India], November 4 (ANI): As many as 70 per cent of business leaders globally reported an increase in their organisations' risk exposure over the past two years, while 64 per cent identified technology and artificial intelligence (AI) disruption as the risk likely to have the greatest impact on their businesses over the next two years, according to a KPMG International report.
The report, titled "Building a Shock-Resilient Supply Chain", released at the 17th edition of ENRich, KPMG in India's flagship Energy and Natural Resources (ENR) conclave, highlighted the growing need for organisations to strengthen supply-chain resilience amid geopolitical uncertainty, energy disruptions, cyber threats and climate-related risks.
According to the report, 56 per cent of respondents said external disruptions involving geopolitical, energy, cyber, trade or climate-related factors would cause severe operational disruptions or significantly affect their organisations' costs and performance over the next three to five years.
The findings are based on KPMG International's Dynamic Risk Assessment (DRA) methodology, expert interviews and a global pulse survey conducted by Ipsos involving 109 senior executives and business leaders across major global markets, including India, the United States, China, Japan and Germany.
Highlighting the major risks confronting businesses, the report noted that technology and AI disruption emerged as the leading concern, cited by 64 per cent of respondents, followed by geopolitical conflict at 58 per cent and macroeconomic uncertainty at 48 per cent.
The report also found that 46 per cent of respondents identified technology and digital dependencies as the most exposed stage of their supply chains, followed by delivered costs and price volatility at 39 per cent and shipping and logistics at 33 per cent.
"Risks seldom happen in isolation," the report stated, highlighting how geopolitical tensions, technological disruptions, cyberattacks and resource scarcity can reinforce one another and trigger cascading effects across global supply chains.
It further noted that the ongoing conflict in Iran and disruptions to traffic through the Strait of Hormuz have affected global energy markets, demonstrating how interruptions in critical shipping routes can spread to freight, insurance, financing and industrial production.
The report observed that diversified suppliers may still depend on the same maritime chokepoints, infrastructure or financing channels, limiting the effectiveness of conventional risk-management strategies.
Anish De, Global Head of Energy, Natural Resources and Chemicals, KPMG International, highlighted the need to elevate supply-chain resilience to the highest levels of corporate decision-making.
"Resilience is no longer just a supply chain function, it has become a board-level imperative shaped by energy-linked disruption and a broader set of interconnected risks spanning technology, financial stability operations, and global value chains," De stated in the report.
He also emphasised that organisations must reconsider long-held assumptions about the design, operation and strategic development of supply chains as part of a broader enterprise resilience framework.
The report highlighted that organisations are increasingly adopting advanced technologies and alternative sourcing strategies to strengthen their ability to withstand external shocks.
According to the findings, 49 per cent of respondents prioritised AI and predictive analytics to improve resilience, while 44 per cent identified scenario planning and stress testing and 39 per cent focused on alternative sourcing strategies.
Despite growing concerns, 70 per cent of respondents expressed confidence or strong confidence in their organisations' ability to maintain critical operations during a major external disruption.
However, only 28 per cent said energy security and resilience had become a significant strategic priority for their organisations' senior leadership.
Regina Mayor, Global Head of Clients & Markets, KPMG International, highlighted the growing interconnectedness of global risks in the report's foreword.
"Geopolitical tensions, shifting trade relationships, resource constraints, cyber threats, regulatory shifts, and energy-linked disruption are creating ripple effects that extend far beyond their original source," Mayor stated.
She added, "A disruption in one corner of the world can quickly affect supply chains, customer relationships, investment decisions, and growth plans somewhere else."
The report further emphasised that resilience is increasingly becoming an ecosystem capability, requiring greater coordination across energy, shipping, finance, telecommunications, manufacturing and government stakeholders.
It recommended that businesses move beyond traditional risk-management frameworks focused primarily on prevention and control towards enterprise-wide resilience strategies incorporating continuous risk monitoring, advanced analytics, scenario modelling and strategic flexibility.
Concluding, the report stated, "The response is not to abandon traditional risk management. It is to place it inside a broader resilience architecture."
It added that organisations must strengthen their ability to anticipate external disruptions, protect critical operations and adapt their business strategies to remain competitive in an increasingly uncertain global environment. (ANI)