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FoR betteR GoveRnAnce Annual Report 2022 125

2023 OUTLOOK AND DIRECTION
KWAP acknowledges the presence of numerous risks that
may impact the global economy and financial markets Climate change continues to be a
in 2023 and beyond. It is nevertheless a challenging and major risk factor, with the potential
intricate task to accurately predict the risk outlook and to impact economies, societies,
trajectory for a specific year. Despite the complexity of the environments and KWAP’s investment
task given the uncertain geopolitical outlook on the global Climate portfolios. Extreme weather events,
economy, some potential risks that may impact 2023 and risks rising sea levels and natural disasters
beyond include: may lead to significant economic and
social disruptions. We are already
seeing the impact of mass migrations
The global economy has been as people flee from environmental
gradually recovering from the disasters, war and famine.
COVID-19 pandemic. Nevertheless,
some new challenges crop up, such
as inflationary pressures, interest rate Keeping the aforementioned factors in mind, KWAP
hikes, supply chain disruptions, stock
Economic market volatility, and changes in trade will continue to focus on mitigating risks and building
factors and policies (for example China and United resilience in 2023 through continued investments in risk
uncertainties infrastructure and technology, cybersecurity, sustainability
States), that may have severe impact
on the economic outlook for 2023. and contingency planning. KWAP will continue solidifying
COVID-19 pandemic lingers both in collaboration and communication within KWAP to ensure
the memory and in new variants may maximum agility and responsiveness to changing market
also pose unexpected risks to public conditions.
health and economic recovery.
KWAP anticipates continued digital transformation
Escalating tensions between major internally and across the organisation, accelerated adoption
global powers such as the United of sustainable practices through the establishment of
States, China and Russia has lead the Sustainability Risk Framework and Policy, as well as
to increased geopolitical risks and
Geopolitical long-term impact of these tensions increased focus on social and environmental responsibility.
risks will go beyond 2023. Regional Consistent with the adoption of ISO 31000 Enterprise Risk
conflicts (MENA and Africa) or natural Management Standard, KWAP will continue to innovate
disasters that escalate in intensity our Risk Infrastructure through the introduction of new
and destructiveness may also impact
global economic stability. risk mitigation measures and the revamping of our current
risk governance, ensuring all risks are duly and promptly
The growing reliance on technology managed.
and digital infrastructure in an
increasingly digital world has In conclusion, it is essential to acknowledge that the future
increased the risk of cyberattacks. is unpredictable and unforeseen events could always
Cybersecurity With technology continuing to evolve, impact the risk outlook and directions for 2023. KWAP
risks the risks associated with cybersecurity will stay informed, adapt to changing circumstances and
are likely to increase, resulting in loss make informed decisions based on current information and
due to cyber theft or cyber terrorism expert advice.
including loss of productivity due to
increased cybercrimes.