Introduction: The Risks We Think We Know
When business leaders discuss the major threats on the horizon, the conversation often turns to familiar culprits: sophisticated cyberattacks, macroeconomic shocks, and the disruptive force of Artificial Intelligence. While these are undoubtedly critical concerns, the true nature of risk is often more complex and counter-intuitive than it appears on the surface. The most significant dangers aren't always the ones making headlines.
A comprehensive new report, "Risk in Focus 2026," by ECIIA | European Confederation of Institutes of Internal Auditing offers a more nuanced view. Drawing on a survey of 879 Chief Audit Executives (CAEs) across Europe, as well as qualitative insights from roundtables and in-depth interviews, the report uncovers a surprising disconnect between perceived threats and underlying realities. It suggests that many organizations may be focusing their resources on the wrong problems or misunderstanding the nature of the right ones.
This article distills the report's most impactful and unexpected findings. We will explore four key takeaways that challenge conventional wisdom about the modern threat landscape, from the startling de-prioritization of climate change to the hidden dangers of AI that go far beyond job automation.
Takeaway 1: The Great De-Prioritization of Climate Change
One of the most (un)surprising findings from the report is the dramatic shift in attitude towards environmental risks. The category of "Climate change, biodiversity and environmental sustainability" fell from 6th to 10th place in the risk rankings, making it the biggest downward mover in the entire survey.
This de-prioritization seems to be driven by a confluence of factors. Executives cite significant regulatory uncertainty, shifting political attitudes in Europe and globally (the "Trump effect"), and a general struggle within boardrooms to plan beyond a 2-3 year horizon. However, this perception stands in stark contrast to scientific reality. The European Environment Agency recently assessed that several climate-related risks have already reached "critical levels" across the continent.
The concern among some leaders is that this short-term focus could lead to disastrous long-term consequences. As a CAE at a Swedish insurer noted, the trend has dire implications for corporate strategy:
"My real fear is that the omnibus deregulation and the Trump effect will lead to companies failing to tie sustainability and climate-related goals into the business plan and deter them from creating a green vision for the organization."
The danger is clear: by focusing on more immediate threats, organizations may be dangerously underestimating a slower-moving but potentially more catastrophic long-term risk akin to an iceberg!
Takeaway 2: Is the #1 Risk Actually Overstated?
Cybersecurity remains the undisputed king of perceived business risks. An overwhelming 82% of Chief Audit Executives scored it as their organization's most important threat, a position it has held consistently. The alignment seems appropriate, with internal audit teams dedicating more time and effort to cybersecurity than any other area.
However, the data reveals a counter-intuitive trend that complicates this picture. When measured as a percentage of revenue, actual corporate cyber exposure has dropped every year since 2022, falling from 2.84% to just 1.32% in 2025. The report suggests years of sustained investment in cyber defenses are finally paying off due to several specific factors: growing organizational maturity, better negotiating skills during ransomware attacks, lower regulatory fines, reduced reputational risk and having countermeasures built into third-party systems.
The analysis suggests that when executives answer survey questions, they may be thinking of "the level of risk without countermeasures." This doesn't mean cybersecurity is no longer a major threat. Rather, it indicates that organizations' perceptions of the risk may not have caught up with the reality of their own improved resilience.
Takeaway 3: The Real AI Threat Isn't Job Loss, it is "De-Skilling"
The public discourse around AI often centers on job displacement. But this focus overlooks a more subtle and strategically damaging threat that is accelerating an already critical talent crisis. According to a European Commission action plan, Europe is already suffering from high staff turnover and shortages in 42 different occupations. The report highlights that AI's real danger is "de-skilling"—the erosion of foundational skills because AI has automated the junior-level work that traditionally builds senior-level expertise.
The report uses the example of payroll consultants to illustrate the problem. Senior consultants possess a deep understanding of their field because they spent years learning the basics as junior employees. As AI begins to automate that foundational work, the traditional career path that creates experts is disrupted. This poses a critical question for future talent pipelines.
A CAE at a Belgian HR business articulated the challenge this creates for long-term workforce planning:
“We have a large population of payroll consultants who deeply understand their roles because of the knowledge and experience they learnt as juniors doing basic work. We are really struggling to understand how senior people in future will get these skill sets and how we can restructure those careers with AI.”
This "de-skilling" phenomenon presents a profound strategic challenge. It forces companies to rethink not just which jobs to automate, but how to cultivate the next generation of experts when the training ground for their expertise is disappearing.
Takeaway 4: The Grave Danger of "Corporate Suicide by Black Box"
As companies rush to implement AI, they face a risk far more profound than simple vendor lock-in. The "black box" problem i.e. where AI systems make critical business decisions using opaque processes that are difficult to interpret or audit, is emerging as a top-tier strategic threat. When core business logic is embedded within an unexplainable AI model, the organization loses its ability to understand, challenge, or control its own operations.
This ceding of strategic control to a non-transparent system can have devastating consequences. A CAE at a Spanish financial institution offered a stark warning about the ultimate consequence of this trend, framing it as an existential threat:
"If your business has a lot of its processes effectively hidden in opaque artificial intelligence models where decisions take place in a ‘black box’, that is worse than vendor lock-in, it is close to corporate suicide."
This risk is not merely philosophical; it carries tangible compliance and regulatory consequences. The report notes that such systems "may even fall foul of provisions on the responsible use of AI in the European AI Act" and that "regulatory approval for their use could be problematic." This fundamentally challenges the principles of corporate governance. If leadership cannot explain why a decision was made or audit the process behind it, accountability becomes impossible, and the organization is effectively flying blind.
Conclusion: Are You Looking at the Right Risks?
The findings from this report serve as a critical reminder that the most significant business risks are often the most counter-intuitive. While headlines focus on cyberattacks and job-stealing robots, a deeper analysis reveals a landscape where climate change is being ignored, cyber resilience is understated, and the true dangers of AI are more subtle and strategic than commonly understood.
These insights challenge leaders to look beyond surface-level threats and question the core assumptions that drive their risk management strategies. As businesses navigate this complex landscape, the critical question is no longer just "Are we managing our risks?" but "Are we even looking at the right ones?"
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