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Assessing the current state of polycrises and systemic risk research

The COVID-19 pandemic, Russia's war on Ukraine, geopolitical tensions, climate change and other events highlight our growing exposure to complex, interconnected, and intertwining risks. In view of this development, the focus of risk research has shifted towards the comprehensive analysis of interconnected and mutually interactive risk sources and crises.

In a review article in the International Journal of Disaster Risk Science, Huan Liu (Kyoto University) and Ortwin Renn (Research Institute for Sustainability, RIFS) offer an overview of the current state of research on polycrises and systemic risks.

The researchers initially clarify the terms "polycrisis" and "systemic risks," outlining their theoretical foundations, historical evolution, and practical relevance. The key distinction between the two is that polycrises comprise multiple entangled and mutually reinforcing crises that unfold simultaneously across different systems.

The concept of systemic risks, on the other hand, refers to risks within a single system that can lead to widespread failure but can also extend to other risk areas. In addition, crises refer to events that have already occurred, while risks refer to impending events that have not yet materialized.

Complexity poses challenges for risk assessment

In traditional approaches to risk assessment, risks are analyzed in isolation, with the aim of avoiding harms, or—failing that—minimizing impacts. However, those risks that can escalate into polycrises require new, integrated approaches that account for interdependencies, cascading effects, and the complex interactions of multiple systems.

Renn says, "Risk assessment in the context of polycrises is particularly challenging due to the complexity, interdependence and unpredictability of the risks involved. Data scarcity, incomplete information, and the dynamic nature of crises also make precise assessments difficult. It is therefore particularly important to make the interactions themselves the primary focus of scientific modeling in order to determine combined effects as accurately as possible."

Integrated methods of modeling that can be used to capture the non-linear interactions and feedback loops that are characteristic of complex systems show particular promise and could help to uncover weaknesses, improve predictive capabilities, and develop more effective risk mitigation strategies.

"Risk management seeks to strengthen the resilience of a system in such a way that its functionality can be safeguarded or restored in a short time, even in the event of several crises occurring simultaneously," explains co-author Liu. Stress testing and simulations involving multiple parallel crises are particularly suitable for this purpose.

Communication is crucial for public trust

According to Liu and Renn, communication also plays a crucial role in efforts to address polycrises. It can promote transparency, strengthen trust, and facilitate the inclusive participation of all stakeholders. Effective risk communication conveys complex and uncertain information in a way that is understandable and credible for different target groups, such as the public, politicians and experts. It also creates spaces for open dialogue.

In times of crisis, when misinformation and rumors can spread quickly, structured communication approaches are crucial for building public trust and delivering coherent responses to crises that may seem implausible at first glance, but are most likely to produce the desired effect.

This holistic perspective enables policymakers and practitioners to better anticipate cascading effects, develop adaptive strategies, and strengthen the resilience of various climatic, social, economic and political systems. Ultimately, it facilitates coordinated responses that are more robust and better able to cope with the diverse challenges of the current global crises.

The review article was originally prepared for the International Symposium on Polycrises and Systemic Risks held in Beijing in 2024.