RISKS & CRISES IN THE NEWS - December 7

Risks & Crises in the News

Date: December 7, 2025

Published by: International Association of Risk and Crisis Communications (IARCC)

The International Association of Risk and Crisis Communications monitors and reports on developments shaping business continuity, resilience, and trust. Each week, we examine risks across strategic, operational, financial, compliance and reputational domains.

Cross-Cutting Themes

AI as both shock absorber and shock amplifier. The AI investment boom is helping support global growth and markets even as it creates a new supply-chain crunch, increases concentration risk in a handful of tech names, and outpaces safety and regulatory frameworks.

Eurasian instability shifting from battlefield to structural risk. Ukraine’s looming population decline and signs that Russia’s traditional influence is weakening in parts of Eastern Europe point to a prolonged adjustment in the region’s security and energy order.

Regulators hardening the compliance perimeter. New EU anti-corruption rules, the UK’s “failure to prevent fraud” offence, major data-protection fines, and age-gating rules for social platforms are raising the global governance bar.

Strategic Risk

Issue

Russia, Eastern Europe and Ukraine’s demographic cliff. While Moscow continues to warn of escalation if “Europe wants war,” shifting political signals and alliances suggest Russia’s leverage over parts of Eastern Europe is weaker than a decade ago.

At the same time, Ukraine’s population has fallen below 36 million, down from roughly 42 million before the war. Projections indicate a possible decline to between 9 and 23 million by 2100. Casualties, migration, and persistently low birth rates are turning demographics into a central constraint on reconstruction, defence capacity, and public finances.

Strategic Implications

Long-term investment in Ukrainian reconstruction, heavy industry, or large-scale services must account for chronic labour shortages alongside physical damage and security risk.

For Europe, the combination of a weaker but still unpredictable Russia and a depopulating Ukraine implies sustained pressure on defence spending, energy diversification, and migration policy over the next decade.

What’s Next

Monitor shifts in regional alliances and reconstruction planning, particularly where labour availability, migration inflows, and defence commitments intersect.

Operational Risk

Issue

AI-driven hardware and supply-chain strain. Surging demand for AI infrastructure and advanced consumer electronics is producing a global shortage of memory and high-end chips. Prices have risen sharply, with manufacturers prioritising AI-linked production at the expense of legacy product lines.

Operational Implications

Lead times for AI infrastructure and advanced electronics are likely to extend into 2026–27.

Non-AI product lines risk being crowded out of supplier capacity, creating delays and potential market-share losses.

Organisations should pre-identify critical products and customers that will be prioritised if hardware constraints intensify.

Issue

Aviation labour disruption risk. More than 700 Air Transat pilots have voted almost unanimously to authorise a strike, potentially beginning as early as mid-December, coinciding with peak holiday travel across Canada, Mexico, the Caribbean and Europe.

Operational Implications

Travel-dependent sectors face elevated risk of flight cancellations, diversions, and crew shortages.

Organisations should build redundancy into travel planning, including alternative carriers, routes, and remote options for critical year-end operations.

Issue

Nature, reshoring and resilience. Firms that previously localised supply chains and reduced reliance on vulnerable ecosystems are outperforming peers, signalling that markets are rewarding resilience rather than pure efficiency.

Operational Implications

Reshoring, climate adaptation, and nature-risk management should be treated as integrated resilience strategies rather than isolated ESG initiatives.

Financial Risk

Issue

Global growth supported by AI but exposed to sentiment and tariffs. The OECD projects global growth of about 3.2% in 2025, easing to 2.9% in 2026. AI-driven investment is offsetting some drag from tariffs and trade restrictions, but optimism around AI has itself become a key vulnerability.

Major policymakers and asset managers now openly identify an AI-driven market correction as a central downside risk rather than a distant tail event.

Issue

AI market concentration and leverage. Large asset managers expect AI to continue dominating equity performance in 2026, even as they warn of crowded trades and elevated leverage. Any earnings disappointment, regulatory intervention, or hardware shock could trigger sharp de-risking, particularly in indices heavy with AI mega-caps.

Issue

Policy risk around AI chips. U.S. lawmakers removed the proposed GAIN AI law from the annual defence bill following intensive lobbying. While this provides short-term relief on export controls, it underscores ongoing tension between national-security priorities and commercial interests.

Financial Implications

Portfolios should be stress-tested for AI overshoot risks driven by valuation corrections, as well as AI undershoot scenarios involving supply bottlenecks and export restrictions limiting deployment.

Compliance Risk

Issue

Tougher line on data, corruption and fraud. TikTok has been fined hundreds of millions of euros over unlawful transfers of EU user data to China. New EU anti-corruption rules and the UK’s “failure to prevent fraud” offence are raising expectations for governance and preventive controls.

Issue

AI safety and platform regulation. Independent assessments rate AI companies’ safety and governance practices as inadequate. Australia’s under-16 social-media ban is emerging as a global test case, with platforms implementing large-scale age-gating measures.

Compliance Implications

Multinationals should plan for a “highest standard wins” regulatory environment across anti-corruption, fraud prevention, data transfers, AI governance, and child-safety requirements.

Health Risk

Issue

U.S. vaccine policy turbulence. Former FDA and CDC leaders warn that proposed changes to childhood vaccine schedules, including delayed hepatitis B dosing, could raise medium-term public health risks.

Health-Risk Implications

Reduced immunisation coverage in a major economy increases risks of disease resurgence, workforce disruption, travel restrictions, and political polarisation around health measures.

Employers with significant U.S. operations should closely monitor CDC guidance and ensure workplace health policies are evidence-based and clearly communicated.

Reputational Risk

Issue

Cyber, conduct and culture as persistent brand threats. Recent cases reinforce recurring reputational triggers: ransomware attacks compounded by poor communication, litigation-driven narrative battles, tone-deaf marketing, executive misconduct, and hidden mental-health risks in safety-critical sectors.

Reputational Implications

Stakeholders increasingly interpret all incidents through cultural and values-based lenses. The key differentiator is not whether issues arise, but how quickly, transparently, and humanely organisations respond, and whether remedial actions are credible.

Questions for Boards & Executives

AI concentration: How exposed are valuation and growth narratives to AI-related assumptions?

Supply chains: What happens to critical projects if advanced chips are delayed by 6–12 months?

Eurasia strategy: Do regional plans factor in long-term demographic and security instability?

Controls: Are governance and compliance systems aligned to the most demanding jurisdictions?

Culture and response: Is there a rehearsed crisis playbook covering cyber, misconduct, and public backlash?

Need specialised insight on a particular industry, risk type, or geography?

Contact IARCC to request tailored analysis, sector briefings, or strategic support for risk communications planning.

Categories: : RISKS/CRISES IN THE NEWS WEEKLY