Global risks: ghost drivers

Global risks: ghost drivers
Global risks: ghost drivers
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An old saying in the industry says: fund management is risk management. The global risks that need to be managed have changed noticeably and objectively in recent years. Political and social risks are increasingly outshining traditional economic risks such as escalating inflation or deflation, bubble formation on the financial markets, national bankruptcy or a major financial crisis.

Moreover, we are discussing the changed risk landscape and how to deal with it also in the context of our company. In most cases, this discussion is conducted using a risk matrix in which potential risks are defined and then evaluated according to their presumed impact, e.g. on the stock markets, and their probability of occurrence. This approach is not particularly original, but it allows us to see very quickly what counts and what does not.

Global risks by probability of occurrence

We are not alone with this approach. At the beginning of each year, the global decision-makers meet in Davos, Switzerland, for a few days and do the same. They assess the risks that they consider to be significant worldwide in terms of impact and probability of occurrence and publish the results in the World Economic Forum Global Risk Report. The report lists the top fears of the global elite in the categories of economic, geopolitical, social, technological and environmental risks. The results are exciting and surprising because the most important risks are environmental risks. The economic risks stop before the environmental risks even begin. And this assessment does not come from the pen of a few overly eco-oriented tree huggers, but directly from the heart and brain of global capitalism.

The Global Risks Landscape 2019

global risks ghost drivers

Source: World Economic Forum, Link here

You probably know the joke about the ghost driver warning on the radio: A car driver hears the message and wonders why the warning mentions only one ghost driver, even though there are so many coming towards him. A few years ago, a sustainable asset manager was seen as a ghost driver on the economic highway. In the meantime, ESG risks have entered the heart of capitalism. Based on Sartre: The ghost drivers are now the others.

In this ESG Letter, we want to address this change in risk assessment, report on the biggest risks worldwide and show how a sustainable asset manager can deal with them and even earn some money.

Have fun reading our articles on global risk!



Forecasts are not a reliable indicator for future developments.



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This document is an advertisement. Unless indicated otherwise, source: Erste Asset Management GmbH.Our languages of communication are German and English.

The prospectus for UCITS (including any amendments) is published in Amtsblatt zur Wiener Zeitung in accordance with the provisions of the InvFG 2011 in the currently amended version.Information for Investors pursuant to § 21 AIFMG is prepared for the alternative investment funds (AIF) administered by Erste Asset Management GmbH pursuant to the provisions of the AIFMG in connection with the InvFG 2011. The fund prospectus, Information for Investors pursuant to § 21 AIFMG, and the Key Information Document can be viewed in their latest versions at the web site within the section mandatory publications or obtained in their latest versions free of charge from the domicile of the management company and the domicile of the custodian bank. The exact date of the most recent publication of the fund prospectus, the languages in which the Key Information Document is available, and any additional locations where the documents can be obtained can be viewed on the web site A summary of investor rights is available in German and English on the website as well as at the domicile of the management company.

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Detailed information on the risks potentially associated with the investment can be found in the fund prospectus or Information for investors pursuant to § 21 AIFMG of the respective fund. If the fund currency is a currency other than the investor's home currency, changes in the corresponding exchange rate may have a positive or negative impact on the value of his investment and the amount of the costs incurred in the fund - converted into his home currency.

This document serves as additional information for our investors and is based on the knowledge of the staff responsible for preparing it at the time of preparation. Our analyses and conclusions are general in nature and do not take into account the individual needs of our investors in terms of earnings, taxation, and risk appetite. Past performance is not a reliable indicator of the future performance of a fund.