Tag Archives: Oliver Wyman

Finance

Trade and Financial Fragmentation Spreads Beyond Rivals as Costs Mount

Leave a comment
  • Fragmentation is already costing the global economy $213–$307 billion annually, while adding 0.2–0.3 percentage points to global inflation.
  • Fragmentation is spreading beyond geopolitical rivals to traditionally allied economies, including the EU, Canada, Japan and South Korea.
  • Emerging markets are likely to be hit the hardest by these shocks as countries outside the major geopolitical blocs face an estimated 10.7% hit to GDP growth versus 6.4% globally, even as regional initiatives offer new solutions.
  • Read the full report and learn about the initiative. Learn more about the Annual Meeting of the New Champions 2026 here. Follow on social media using #amnc26, #2026夏季达沃斯#.

New York, USA, June 2026 – Geoeconomic fragmentation imposing an annual cost of $213–$307 billion usd/ $296- $426 billion cad on the global economy, according to a new World Economic Forum report release today. Driven by geopolitical tensions, economic security concerns and shifting trade relationships across major economies, fragmentation accelerated through 2025 and 2026 and is increasingly affecting trade, finance and investment systems.

Deepening Divides: The Cost of a More Fragmented Financial System — published in collaboration with Oliver Wyman, a Marsh business, and the second in the Forum’s fragmentation series — finds that these pressures are playing out through escalating tariffs, investment restrictions and retaliatory measures.


The report finds  that the growing use of economic statecraft in 2025 and 2026  marked a turning point for global trade and finance. While the first report focused primarily on fragmentation risks between geopolitical rivals, the latest findings suggest a broader structural shift is underway. Tariffs and investment restrictions are increasingly affecting traditionally aligned economies, including the US, the EU, Canada, Japan and South Korea, raising costs for businesses and increasing uncertainty for cross-border trade and investment.

“The global financial system has faced increasing pressures from geopolitical and economic fragmentation,” says Matthew Blake, Managing Director and Head of the Centre for Financial and Monetary Systems World Economic Forum. “Despite these pressures, the financial system has remained resilient. Markets have continued to provide real-time feedback on evolving policies while policy-makers have generally avoided actions that could erode confidence in the international financial system. As fragmentation persists, preserving the trust and stability that underpin global finance will be critical to supporting long-term growth and prosperity.” 

The economic costs are rising
As fragmentation becomes more embedded across markets and financial systems and barriers rise even among allies, the risks of escalation and long-term economic disruption increase. If current trends accelerate into more severe fragmentation scenarios, global losses could reach as much as $6.9 trillion usd, or 6.4% of global GDP, according to the report’s modelling, an economic impact larger than every economy in the world except the US and China.

Ultimately, fragmentation impacts both businesses and households. Current fragmentation policies are estimated to add 0.2–0.3 percentage points to global inflation, eroding purchasing power across most economies. The sharpest real wage impacts are seen in the United States, where real wages are estimated to be 0.33% lower for low-skilled workers, 0.49% lower for medium-skilled workers and 0.66% lower for high-skilled workers, with similar purchasing-power pressures visible in other major economies.

“In conversations with business leaders around the world, the message is remarkably consistent: What businesses need most right now is predictability, and they are not getting it,” says Daniel Tannebaum, Partner and Global Leader, Anti-Financial Crime Practice, Oliver Wyman, a Marsh business. “Without clearer guardrails around tariffs, sanctions and other economic measures, the risks to investment, growth and financial stability will continue to mount.”

Emerging markets face the sharpest exposure
Emerging markets and developing economies (EMDEs) are likely to be the hardest hit by the impacts of growing financial fragmentation. In the most extreme fragmentation scenario, countries outside the major geopolitical blocs, most of which are EMDEs, could face output losses of 10.7%, compared to a global decline of 6.4%.

Structural factors like shallower capital markets make EMDEs more dependent on international capital flows and more vulnerable to the negative impacts of a less integrated financial system.

Africa exemplifies both the risks and potential resilience pathways. The continent’s exposure to external capital flows means a more fragmented system would make development financing more expensive and less predictable. At the same time, regional integration – through initiatives like the African Continental Free Trade Area (AfCFTA) and payment systems such as Pan-African Payment and Settlement System (PAPSS) – offers pathways to build resilience in Africa, which also stands to benefit from such secular trends as population growth and an abundance of critical raw materials.

While fragmentation is unlikely to reverse in the near term, it can be managed. The report identifies five actions policy-makers can take to mitigate fragmentation:

Policymakers can limit the damage

  • Establish shared guardrails to protect the financial system from fragmentation, emphasizing principles like safeguarding the rule of law and independent monetary policy, limiting the seizure of sovereign assets, and protecting the integrity of government data.
  • Align on rules to guide the use of economic statecraft policies that advance national security and resilience objectives without undermining global growth.
  • Ensure policy predictability to sustain investment flows and allow for the continued functioning of cross-border capital and financial markets.
  • Maintain interoperability across payment and digital currency systems and prepare businesses for a more fragmented geoeconomic operating environment.
  • Advance regional integration initiatives such as the AfCFTA and PAPSSP, as well as support the development of domestic and regional capital markets, including the European Savings and Investments Union. 

Together, these measures can help preserve financial stability and resilience even as the global economy becomes more fragmented.

Report methodology


The report updates the Forum’s 2025 fragmentation analysis to reflect policy and market developments across 2025 and early 2026. Its quantitative modelling estimates the economic impact of current trade and financial policies and examines multiple escalation scenarios across output, inflation, trade flows and wages.

The analysis also incorporates updated assumptions on tariffs, countermeasures, pass-through rates and restrictions on services trade, alongside qualitative insights from business leaders, policy-makers and financial-sector experts, including regional perspectives from Africa.

About the Annual Meeting of the New Champions 2026


The 17th Annual Meeting of the New Champions will take place from 23 to 25 June 2026 in Dalian, People’s Republic of China, under the theme “Innovating at Scale”. The meeting will bring together 1,500 cross-sector leaders to explore how innovation and emerging technologies can unlock new growth models and drive positive economic momentum in a fast-shifting global landscape.

For the Silo, Jarrod Barker.

Finance

Over Fifty Nature Positive Investible Opportunities via World Economic Forum

Leave a comment

New Analysis Identifies 50+ Investible Opportunities Delivering Financial Returns

  • More than 50 investible opportunities, across 13 sectors, that are already generating revenue or cost savings for industry and investors have been identified by new World Economic Forum research.
  • Though more than half of global GDP is highly or moderately dependent on nature, capital continues to flow disproportionately towards nature-negative activities, leading to potential systemic risks and undervalued business opportunities.
  • From precision agriculture and sustainable cement to battery recycling and industrial water management, growing numbers of investment opportunities can both protect nature and deliver returns for investors.
  • Learn more about the report here.

Geneva, Switzerland, March 2026 – More than 50 investible opportunities could turn capital flows into lucrative nature-positive business practices and contribute up to $10.1 trillion in annual business revenues and cost savings by 2030, according to a new World Economic Forum report just launched.

The report, 50 Investible Opportunities for a New Nature Economy, developed in collaboration with Oliver Wyman, also highlights how nature risk and capital flow misalignment represents a growing systemic economic risk and a significant missed commercial opportunity for business.


This comes at a time when global capital flows remain deeply misaligned. According to the United National Environment Programme (UNEP), an estimated $7.3 trillion continues to be invested annually in activities that degrade ecosystems, compared to roughly $220 billion invested in nature-based solutions. The report’s 50 investible opportunities offer revenue-generating and cost-saving approaches to close this gap.

Who Is Falling Behind?


Similar to the Paris Agreement for climate targets, the international community is falling behind on biodiversity targets. Renewed action and novel strategies are needed to meet goals of halting and reversing nature loss by 2030.

“We need to transition towards an economic system that delivers prosperity within planetary boundaries,” said Sebastian Buckup, Managing Director, World Economic Forum. “Industries, including the financial sector, will pursue this not just as an act of corporate social responsibility or impact investing but because it makes good business sense to do so.”

As companies face increasing exposure to water scarcity, soil degradation, pollution and tightening environmental regulation, nature-related risks are no longer abstract sustainability concerns but material financial issues affecting long-term profitability.

Drawing on analysis of approximately 250 business activities, the report identifies 50+ investment-ready opportunities across 13 high-impact sectors to support halting and reversing nature loss by 2030.
From precision agriculture and sustainable concrete to battery recycling and industrial water management, these solutions reduce pressure on land, water and resources while generating revenue growth, cost savings and risk mitigation.

WEF_The_Future_Of_Nature_And_Business_2020Download

Case Study: Sustainable Cement and Concrete Blends


For example, the report looks at sustainable concrete blends as an investible opportunity. These blends reduce reliance on newly quarried raw materials by substituting a portion with recycled industrial byproducts or recovered construction materials. They provide similar structural performance to traditional concrete while helping companies meet regulatory standards and growing market demand for low-impact building solutions.

These blends also have an array of nature benefits, including reducing new quarrying, lowering pollution and reducing the energy intensity needed for new concrete.

While these products are commercially viable today and can often be integrated into existing production facilities with moderate capital investment, many sustainable blends retail at a higher price than conventional concrete, as the latter benefits from established logistics, economies of scale and similar factors that lower costs. As economies of scale are built and business models are derisked, sustainable concrete offers an opportunity for investors to put capital towards a business-ready, nature-positive solution that can generate returns.

“At its core, this is a capital allocation challenge,” said Derek Baraldi, Head of Sustainable Finance, World Economic Forum. “Financial institutions and businesses that integrate nature into strategy today are not just managing risk but positioning themselves for competitive advantage.”

The Role of Capital and Financial Institutions

Financial institutions can help scale these solutions by providing the capital companies need to invest in new production processes and facilities. They can also reduce risk through tools such as sustainability-linked loans, guarantees or blended financing, helping innovative materials reach the market faster.

To support financial institutions looking to invest in nature-positive solutions, the report outlines five priority actions for financial institutions to mobilize capital into nature-positive opportunities. By strengthening internal “nature fluency”, innovating financial products, building coalitions, improving data use and leveraging nature transition conversations to surface investible opportunities, financiers can build a robust pipeline of nature-positive opportunities to deliver both mainstream and sustainable finance.



Business depends on reliable water supplies, fertile soils, biomass and ecosystem services such as pollination and flood protection. Industry successes are already delivering value while supporting nature-positive goals, such as industrial water management to tackle water shortages and precision agriculture techniques that save farmers input costs while reducing fertilizer run-off into waterways. Realigning capital flows with nature-positive investments that protect biodiversity and offer financial returns is essential to safeguarding the natural systems which underpin the global economy.

More about Nature-Positive Transitions


The World Economic Forum’s Nature-Positive Transitions report series explores transformative pathways to halt and reverse nature loss by 2030. Focusing on critical sectors, the series highlights the dual impacts and dependencies of these industries on nature, alongside the priority actions businesses can take to avoid and reduce negative impacts, mitigate nature-related risks, build resilience and unlock opportunities across value chains. Nine sectors have been involved: technology, automotive, cement and concrete, chemicals, household and personal care products, mining and metals, ports and offshore wind.

The World Economic Forum provides a global, impartial, not-for-profit platform and insights to support meaningful connections between political, business, academic, civil society and other leaders. (www.weforum.org).

For the Silo, Jarrod Barker.