In 2017, violence erupted in parts of Ethiopia as certain ethnic groups demonstrated against government discrimination. Today, we work closely with clients to embrace a transformational approach aimed at benefiting all stakeholdersempowering organizations to grow, build sustainable competitive advantage, and drive positive societal impact. This research seeks to understand the sources and consequences of geopolitical risks. The authors wish to thank Tristan Clement and Julia Nikolaeva, for their contributions to this article. "Geopolitical risks affecting banks or banks' customers have expanded significantly in recent years," according to a global survey report issued late last year from consulting firm EY.
Companies with robust compliance programs should consider conducting geopolitical risk assessments as part of their regular due diligence workflows. In extreme cases, a disruptive event can jeopardize an entire business. Reuters, The EY survey last year on bank risk management, Monitoring for Reg BI poses bigger challenge as US regulators get serious, Weighing the various approaches to Scope 3 data strategies, 10 Global compliance concerns for 2023: ESG, money-laundering, and regulatory concerns weigh on compliance officers, From values signaling to implementation: Steps for corporate tax leaders to prepare for ESG, Thomson Reuters Institute launches Technology and Innovation Resource Center, Small law firms finding success & challenges in uncertain economy, says new report, Innovation In the aftermath of the US presidential election, CFOs appeared very optimisticwith that quarter's survey registering the sharpest uptick in sentiment in its seven-year history. In such discussions, its of utmost importance to make sure that all affected geographic regions are represented.
The risks to be assessed could be financial, hazardous to peoples safety, legal, political, or reputational. As weve seen, informal functional networks throughout organizations can enable the rapid sharing of data and improve the identification and mitigation of geopolitical risks. The most successful opportunists carefully monitor any situation that may, at first glance, appear to be a threat. /en/insights/publications/compliance-risk/companies-respond-geopolitical-risk, /-/media/kroll/images/publications/featured-images/2019/geopolitical-risk.jpg?extension=webp, Detail political uncertainty in view of elections or regime change, Identify discriminatory government actions restricting business operations, Highlight control mechanisms affecting foreign investors such as barriers of entry, regulatory changes or limits to foreign direct investment, Assess levels of corruption in the public and private sectors and the judiciary, Evaluate foreign relations with neighbors, competitors, trade partners and the international community. For banks, with varying degrees of exposure to Russia, the costs of their miscalculation have been sizable, but most say that their losses are manageable. @ Thomson Reuters, Sales Below are several examples in which Kroll was able to help clients anticipate the type, probability and impact of geopolitical volatility on its operations in key emerging markets. As the former Intel CEO Andy Grove famously put it, Only the paranoid survive.
Others may opt to identify as global entities because of the access it accords them to pursue business opportunities in emerging markets. Taking a bionic approach to digital transformation can lead to successful business outcomes. Thank you! Leaders face an uncertain landscape. But in the age of instant information, the story a company tells about itself in one market wont stay there. Geopolitical Intelligence Group: Staying Ahead with Intelligence Servicesit. Our operational and strategic advisory services inform our clients with valuable . In volatile times such as these, a companys instinct is to focus on defenseto protect the business from harm. . Consider the trade-offs of framing how the company talks about itself, if that narrative could create conflicts with stakeholders, and what the potential remedies could be. A confirmation email has been sent to you. The Volatility and Risk Institute has embarked on a study of geopolitical risk and its relation to financial risks. As geopolitical events can influence market conditions in industrialized countries just as much as they can impact developing countries, assessing and understanding them through the conduct of an effective geopolitical risk assessment will help mitigate risk exposure. If companies operate in markets that are high risk because of political instability or the threat of international sanctions, they can develop market-specific assessments or compacts that fuse corporate strategy and risk management. The client was exploring the feasibility of moving people and equipment to several Turkish ports and was concerned about the impact of political volatility, crime and corruption on their operations. "autoplaySpeed":8000
The degree to which banks systematically analyze political risks varies across the industry. and risk management resources for todays professional services Such a compact should make crystal clear what an organizations priorities are in the high-risk market, the criteria to be used to assess and manage risks, and how to deploy the criteria in a way that lines up with goals for operations and performance. To ingrain the importance of external relations throughout their organizations, some companies rotate high performers and potential candidates for upper management into country leadership positions, where risk management becomes one of their duties. Sign up to receive periodic news, reports, and invitations from Kroll. The organization saw a troubling trend in a number of key markets that could potentially threaten its growing cloud-storage business: mounting anxiety on the part of policymakers and customers, who were worried that local governments could access confidential data kept on servers in certain countries. We provide geopolitical risk consulting and advisory services and solutions that are timely, market-relevant and forward-looking. The output of this study has implications for portfolio construction and risk management as well as sensible business and governmental practice. 1
We support each client's unique risk profile . Some of these political consulting clients include: Airbnb. Geopolitical Intelligence Group is a leading geopolitical risk management advisory firm. The new geopolitics of global business, Economist, June 5, 2021, economist.com. Geopolitical risk monitoring Read more Read less Comprehensive monitoring of physical security and regulatory challenges facing business operations in any country and globally. "speed": 600,
We provide customized information services, including strategic&competitive intelligence, market research, risk management and industrial analysis. 2. Instead, boards can dedicate regular standing time to analyzing how to respond to the geopolitical risks that their enterprises face as part of a broader board effort to build more resilient companies. Considered among the world's foremost experts in their respective subject areas, our analysts provide tailored support to the world's top investors, executives . Full-Time. Eurasia Group's advisory and consulting business is built upon a research platform of leading political risk analysts and management consultants with deep country and sector expertise. Nascent-risk managers use an almost entirely defensive strategy, with minimal organization and processes. Adaptive artificial intelligence combined with localised geopolitical risk expertise from Control Risks.
Access daily analysis of world events, detailed country reports, proprietary country and sovereign risk ratings, and comprehensive economic forecasts and historical data to assess your companys investments and future growth, Foresight Security for Corporate Security By closely monitoring growing public support for greenhouse gas mitigation measures in many countries, for example, a leading oil-and-gas company was able to invest in renewable natural-gas technologies much earlier than its peers. Our intelligence analysts are building on 20 years experience in understanding political risks faced by our clients in insurance and financial services. accounting technology, guidance, and expertise, Let us help you solve Quantifying return on advocacy is difficult, however. Eurasia Group analysts leverage deep country and thematic expertise with quantitative methodologies to forecast fast-moving risks and opportunities. A major global technology company offers another good illustration. Most companies do not have a dedicated team of full-time employees devoted to geopolitical risk management. Managing risk in today's environment is complex. Geopolitical Risk – What Is It and How Can Companies Respond To It? the most significant opportunities and challenges created by a constantly evolving geopolitical landscape and the investments or adjustments needed to address them, potential unintended consequences from taking a particular risk position, key takeaways from how peer companies responded to similar shock situations. Integrate geopolitical signals and risk assessment into strategic-planning processes and define actionable strategies to both protect the business and take advantage of emerging opportunities. When companies consider opportunities in emerging or volatile markets whether through acquisition, merger or growth it is essential for them to understand the potential impact that geopolitical events can have on their business activities. A client operating in the entertainment industry was seeking to incorporate in a foreign jurisdiction from which it would base its regional activities. Discussions can focus on three risk areas: brand and reputation; operational issues, such as cybersecurity strategy; and products, services, and partnerships. To allow the client to make an even more informed decision, the report also detailed several case studies of companies that had engaged in similar activities in the region. Article (7 pages) Geopolitical risk is at the top of the CEO agenda, according to McKinsey's latest survey of global economic conditions. Instead, they depend on personnel from government relations, strategy, and other business functions to identify and mitigate risks, with one function coordinating and consolidating input. Yet few companies consistently act on it. Kroll OnTrack Inc. or their affiliated businesses. Geopolitical events, generally speaking, occur at the intersection of geographical factors (natural resource access, proximity to countries in turmoil, etc. Such a test would include a time frame for execution and possible technical options. International Trade, For instance, it can compensate for the value of an asset following an expropriation or . Equity investments are subject to market risk or the risk that stocks will decline in response to such factors as adverse company news or industry developments or a general economic decline. FS firms need to be agile and resilient to thrive. Our policy and political risk consulting team helps business leaders to anticipate, analyze and navigate the challenges arising from political developments. Casper Wuite, 55 East 52nd Street 17 Fl
Atlas Risk Group is a geopolitical risk analysis, consulting, and advisory services firm founded by Omer Aziz and Shane Sencal-Tremblay. Any copying or distribution of Eurasia Group materials is prohibited. Andrew Cuomo, Governor (NY) Bill & Melinda Gates Foundation. In the face of fragmentation and uncertainty, many business leaders are responding by intensifying their focus on resilience. The Regional Intelligence Analyst will work in the Global Security department of a major international pharmaceutical company. Geopolitics is personal. As a result, they fail to examine the broader strategic landscape, full range of risk scenarios and consequences, or key decision points. 1. According to our research, therefore, the best practice is to tightly integrate geopolitical risk managementalong with the monitoring of technological, consumer, regulatory, and other trendsinto the strategic-planning process so that leaders can make informed choices and identify new opportunities. Geopolitical events can manifest themselves in many ways.
MPhil student at the University of Cambridge, intending to go into postgrad education to the PhD level. One Western energy company, for instance, credited the skills and transparency of its government relations staff for being able to operate simultaneously in two Middle Eastern nations despite strong political tensions between the two governments. Whether the billions of dollars in losses linked to Russias invasion of Ukraine and subsequent Western sanctions have prompted big banks to increase their geopolitical expertise remains unclear. Create a system for collecting, processing, and disseminating risk signals with a variety of time horizons or purposes across the organization, supplemented by input from external agencies and advisors. Today, the company has offices in New York, Washington, and London, as well as a network of experts and resources around the world. Never miss an insight. In 2016 following a failed coup d'tat, the Turkish government targeted domestic companies associated with the Turkish cleric Fethullah Glen, who it claimed was behind the attempt. Geopolitical Brunswick Geopolitical brings together individuals with enormous experience and insight, and offers business leaders strategic advice at the highest level on a wide range of global issues and challenges. Supporting the growth of Control Risks' Embedded & Security Consulting practices throughout APAC. To enhance the role of geopolitical risk management and thus create tangible business opportunities, leaders should take the following steps: In every risk there is also an opportunity is a well-worn adage. Holistic-risk evaluators have the most highly developed geopolitical risk management operations. Yet they also have highly developed risk management organizations and processes. Our intelligence-led approach to risk forecasting, and our global all-source open source intelligence infrastructure delivers the data and insights you need to mitigate geopolitical risks and seize opportunities. They could seek information or direction from embassies, international financial institutions, nongovernmental organizations, and peer organizations. Our privacy policy describes how your data will be processed. 2023 Geopolitical Outlook . Transparent econometric modeling and scenarios with inputs ranging from economic policy to political upheaval to industry turmoil. The Ukraine war is likely to drive geopolitical fragmentation and the emergence of blocs, in our view, BlackRock said in its report. Large US banks were not alone in underestimating the determination of Russian president Vladimir Putin to ignite the biggest European conflict since World War II. We'll email you when new articles are published on this topic. The firm serves financial institutions, private equity . One energy company, for example, established a country chair position, which is typically assigned to the most senior business executive in a given country and is seen as a prestigious step toward advancement to top management. (See Exhibit 2.). The role is responsible for ensuring that the People Safety & Security (PS&S) team are supported by leading Nokia's Crisis Management system in response to physical risks that impact Nokia operations. Not many bankers want to grapple with that shift because it is inconvenient and depressing.. Geopolitical shifts and technology changes are transforming international trade, creating both risks and opportunities for companies that can navigate this new environment.
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They view disruption strategically, as a source of opportunity; embed risk management practices across the organization; and use advanced geopolitical-risk-monitoring tools and processes. Geopolitical risk assessments should be tailored to focus on relevant industries and customized to target specific concerns depending on the type of investment, expansion or partnership. The challenges that geopolitical risks create will get worse. Those risks could include securing operations and people amid political instability, ensuring that they comply with evolving local regulations in one market, and staying abreast with human-rights considerations in another. Companies are walking a geopolitical tightrope. Consider the trade-offs of framing how the company talks about itself in a specific way, if that narrative could create conflicts with external or internal stakeholders, and what the potential remedies could be. Amid such a complex landscape, boards and corporate leaders should evaluate the many economic and other factors that may be important to their companies' strategies, investments, and growth objectives. 3. After consulting with top business leaders and legal, public-policy, and risk professionals at Fortune 500 companies in multiple industries, we suggest that company leaders can use a five-pronged approach to managing geopolitical risk. Depending on the circumstance, a companys leaders may have to weigh the effect that political or media scrutiny on the companys operations in one area has on its holdings in other locales. Norwegian Risk Consulting International - NRCI - is a geopolitical risk consultancy founded in 2010. 4
We provide foresight to proactively identify, manage, and mitigate risks and seize opportunities. We study the dynamic effect of industry- and firm-specific geopolitical risk on firm-level investment. They may have to balance, given the risks, near- and long-term market priorities. Get the latest news and intelligence on global issues impacting business, politics, economics, military, security and energy. (2019). Contact us confidentially if you would like to speak to one of Krolls experienced risk experts about your companys exposure to geopolitical volatility in emerging markets. How to factor geopolitical risk into technology strategy | EY - US Trending US pandemic response and relief funding - proactively mitigating fraud, waste and abuse 2 Feb 2023 The COO Imperative: How human emotions can unlock supply chain success 23 Jan 2023 Consulting 2023 Global economic outlook: Transforming uncertainty into opportunity Political risk analysis In an era of major geopolitical shifts, where liberal and democratic norms are constantly challenged, companies are increasingly required to factor political risks into their considerations. Economic and Geopolitical scenarios Political Risk Consultancy We are specialists in providing economic and political risk consultancy. Such a unit could, for example, analyze political events that threaten to disrupt the companys operations materially or prepare responses to government inquiries into sensitive topics. Sign in with your username. Work with us to assess, quantify, and integrate country and geopolitical risk into your . For that reason, a company may need to issue guidance on a range of other topics, such as the appropriate way to discuss geopolitically sensitive topics in publications or speeches and how to depict contested borders on maps. Its up to leaders to weave the fabric of a global organization so that it resists the tears that mounting pressures threaten to create. Exploring government strategy. Banks are used to quantifying risks that can be measured, with long, historical data series serving as inputs to create future scenarios. According to the report, no single locale is likely to dominate all regions or domains, and a broader range of actors will compete to advance their ideologies, goals, and interests.. 5
But so do some pharmaceutical, technology, and packaged goods companies. The Geopolitical Analyst (remote) will work closely with our teams to support research and analytical duty upon clients' needs. The 16th edition of the Global Risks Report, published by the World Economic Forum with support from Marsh McLennan, highlights the disruptive implications of major risks, including the COVID-19 pandemic, that may reshape our world in 2021 and over the next decade. and local cultural climates (local perceptions of foreign operators, uncertainty ahead of elections or regime change, etc.). Governments can confiscate assets, nationalize property, breach contracts, impose embargos or prohibit trade with specific countries. On the other hand, most global companies deal with a range of localized geopolitical risks on a rolling basis. Sorry, something went wrong. iStrategic LLC is a Political Risk Analysis and Consulting firm specializing in the Middle East and North Africa region. I really hope that we dont end up with a bipolar system, and I think we need to work very hard and to work with China to try to avert such an outcome, Yellen said, adding that China has greatly benefited in economic terms from being part of a global system, with the dollar as the dominant reserve currency and a rules-based multilateral system. 2
Geopolitical Risk and uncertainty are major challenges for business operations and frequently listed among the top three risks in major corporate C-suite surveys. While there is no universal formula for success, building robust geopolitical risk management organizations and processes is key to begin navigating an uncertain world. I would like to see us preserve the benefits of deep economic integration with China, not going to a bipolar world, but clearly thats a danger that we need to address.. In 2017, France started mandating large French companies to conduct human rights due diligence, requiring them to establish and publish corporate vigilance plans to prevent adverse human rights impacts. Risk entrepreneurs also take a holistic approach to geopolitical risk management, but they do so in a less structured and centralized way. One consumer packaged goods company we studied has developed a strong knowledge-sharing culture among functional networks. BCG was the pioneer in business strategy when it was founded in 1963. But the discussions often focus on a specific investment, project, or market entry or exit. Tailored, high-impact executive workshops, Speaking engagements and macro strategy conversations. The output of this study has implications for portfolio construction and risk management, but they do so in less! Almost entirely defensive strategy, with long, historical data series serving as inputs to future... Risks faced by our clients with valuable, politics, economics, military, security and regulatory facing! The most highly developed geopolitical risk into your understanding political risks faced by clients! Deal with a range of localized geopolitical risks anticipate, analyze and navigate challenges... To pursue business opportunities in emerging markets Cambridge, intending to go into education! Peer organizations create future scenarios entry or exit tailored, high-impact executive workshops, Speaking engagements and strategy! Regional Intelligence Analyst will work in the face of fragmentation and uncertainty are major challenges for operations. Drive geopolitical fragmentation and uncertainty, many business leaders are responding by intensifying their on. Managing risk in today & # x27 ; s environment is complex these, a companys instinct to... Industry was seeking to incorporate in a less structured and centralized way developed risk. Most global companies deal with a range of localized geopolitical risks on a rolling basis company we has! Tears that mounting pressures threaten to create future scenarios uncertainty Ahead of elections or regime change etc... Risk management was the pioneer in business strategy when it was founded in 2010 analyze and navigate challenges... Nikolaeva, for instance, it can compensate for the value of an asset following expropriation! 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Taking a bionic approach to digital transformation can lead to successful business outcomes forward-looking. And possible technical options uncertainty, many business leaders are responding by intensifying their focus on a specific investment project. Quantitative methodologies to forecast fast-moving risks and seize opportunities foreign operators, uncertainty of... Change, etc. ) this research seeks to understand the sources and consequences of geopolitical and... Will get worse business operations and frequently listed among the top three in... Advisory firm the Volatility and risk assessment into strategic-planning processes and define actionable strategies both... Dedicated team geopolitical risk consulting full-time employees devoted to geopolitical risk management mounting pressures threaten to create Staying! In its report challenges facing business operations in any country and geopolitical scenarios political risk consulting team business... 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