They explain, "In volatile times such as these, a company's instinct is to focus on defense to protect the business from harm. Understand counterparty risk with forward-looking analysis of reputational, legal and political risks associated with new or existing partners, Risk Quantification Leverage unparalleled Companies should also consider conducting geopolitical risk assessments at regular intervals throughout their exposure in that country in order to detect and respond to changes before they have a negative impact on the company. Please try again later. 4. Long-term planning can also cover such issues as the following: For both internal and external stakeholders, walking a geopolitical tightrope may cause leaders to redefine how they think about and position their companies. The role will be the global lead for looking at Geopolitical Risk across Nokia and what those impacts to might mean to Nokia's business and people. "autoplaySpeed":8000 We call these archetypes holistic-risk evaluators, risk entrepreneurs, systemic-risk managers, and nascent-risk managers. Companies also have been attempting to measure the impact of their lobbying efforts on governments, such as by benchmarking the success of their advocacy compared with that of their industry peers or estimating potential cost savings. Holistic-risk evaluators have the most highly developed geopolitical risk management operations. Winning companies take calculated risks to improve profitability through both tailwinds and headwinds. Its up to leaders to weave the fabric of a global organization so that it resists the tears that mounting pressures threaten to create. This research seeks to understand the sources and consequences of geopolitical risks. In the next two decades, competition for global influence is likely to reach its highest level since the Cold War. We hosted our 6th annual Top 10 Geopolitical Risks event today with KPMG global alliance partner, Eurasia Group, and we highlighted the relevance of the risks But so do some pharmaceutical, technology, and packaged goods companies. Nascent-risk managers use an almost entirely defensive strategy, with minimal organization and processes. Most of the companies we assessed do not use rigorous quantitative methods to analyze geopolitical risks. With Thomson Reuters Regulatory Intelligence, you can find and get clarity on regulatory developments. Citigroup, which had been trying to sell its Russian retail operations when the war started, said its potential losses could come to as much as $3 billion, and put aside $1 billion in loan-loss reserves. They should regularly look up from tending to the immediate needs of their operating environments to learn, adapt, and prepare for external and internal shocks and pressures. Global geopolitical risk and economic uncertainty have increased dramatically over the past decade, according to leading indices. In extreme cases, a disruptive event can jeopardize an entire business. All rights reserved. Our team's background in national security, international affairs, intelligence, cybersecurity, and commerce provides The Chertoff Group with an unrivaled perspective of evolving global relationships, challenges, and tensions. Unfortunately, geopolitical risk commonly is misunderstood by the Nearly half of bank CROs (48%) plan to broaden methods for identifying new or emerging political risks and a quarter plan to build new tools for qualitative tracking and reporting on political risk measures.. We provide objective and detailed standardized and bespoke risk assessments to companies, investor groups and governments in Africa, Asia, the Middle East and Latin America. Responsibilities: Provide cogent geopolitical risk analysis to a diverse array of clients and various internal teams in written or recorded deliverables. Supporting corporate third-party management programs to drive risk-based due diligence decisions. "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. "arrows": false, Economic and Geopolitical scenarios The Volatility and Risk Institute has embarked on a study of geopolitical risk and its relation to financial risks. A large organization is likely to have stakeholders with differing cultural reference points and opinions on issues such as human rights and privacy. Intelligence-led solutions for underwriters and insurance exposure management teams to efficiently identify, evaluate and monitor risks and opportunities at country, region and location specific levels, A credible, independent view of external operational and strategic risks and the tools to integrate those risks into your financial evaluation, Improve the quality of investment decision-making with pressure-tested macroeconomic and sector inputs, expert political analysis and scenario alternatives, {"items" : [ Each event carries it own risks, and each risk its own consequences. Creating short-term, midterm, and long-term response strategies ensures that a company can not only handle a fast-changing situation or emergency but also make the investments needed to seize opportunities and become more resilient. Our geopolitical risk intelligence solutions provide end-to-end coverage of political, violent, sovereign, banking and investment risk worldwide. 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. Sorry, something went wrong. Comprehensive spectrum of risk-based screening and due diligence solutions. A compact could include a traffic-light-style warning system with red, yellow, and green lights that represent escalating risk levels. Independent data and analysis for opportunity sizing, local partner selection, government stakeholder assessment and risk assessment. Whats their secret? 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. Organized crime syndicates, terrorist organizations or rebel groups can also threaten the supply chains, assets and personnel of foreign firms. All qualified applicants will receive consideration for employment without regard to race, color, age, religion, sex, sexual orientation, gender identity / expression, national origin, protected veteran status, or any other characteristic protected under federal, state or local law, where applicable, and those with criminal histories will be considered in a manner consistent with applicable state and local laws.Pursuant to Transparency in Coverage final rules (85 FR 72158) set forth in the United States by The Departments of the Treasury, Labor, and Health and Human Services click here to access required Machine Readable Files or here to access the Federal No Surprises Bill Act Disclosure. A multinational oil and gas company engaged Kroll to assess the stability of the Turkish government in the aftermath of the aforementioned 2016 Turkish coup d'tat attempt. In such sessions, the high-level stakeholders can discuss the companys potential exposures and review ongoing mitigation efforts. Sign in to the product or service center of your choice. Otherwise, internal fissures can build and burst in a way that damages culture, reputation, and performance. trust us to help them make informed decisions, Professional services As a management consultant, Dr. Smith has worked for PA Consulting Group . 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. Atlas Risk Group is a geopolitical risk analysis, consulting, and advisory services firm founded by Omer Aziz and Shane Sencal-Tremblay. Some may, for commercial and strategic reasons, choose to strengthen ties to the countries where the companies are based. Subscribed to {PRACTICE_NAME} email alerts. 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. Supporting the growth of Control Risks' Embedded & Security Consulting practices throughout APAC. World Path Consulting San Francisco, CA Quick Apply Remote. One stream is to work for consultancies - i.e. Political risk management through context intelligence and strategic planning is at the heart of what we do. Companies with robust compliance programs should consider conducting geopolitical risk assessments as part of their regular due diligence workflows. The two countries account for 76 of the worlds 100 most valuable companies. In 2017, violence erupted in parts of Ethiopia as certain ethnic groups demonstrated against government discrimination. Get the latest news and intelligence on global issues impacting business, politics, economics, military, security and energy. Minimize risk, optimize strategy, and seize opportunity with Luminae Group Subscribe to our mailing list to receive expert geopolitical intelligence, unparalleled insight, and an insider perspective on global affairs. Creating risk management strategies through deep industry expertise, advanced analytics, and specialist global knowledge to help you optimize your business. On the other hand, most global companies deal with a range of localized geopolitical risks on a rolling basis. For decades, companies built their . When retaining consultants, always consider the necessary types of insurance to be required. 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. Case Study 3 A board could begin such a conversation with a baseline assessment that includes the following: Boards can gain perspective by soliciting outside opinions on relevant topics from business and political leaders, embassies and other government agencies, and nongovermental organizations. These circumstances can leave traditional risk management systems and teams flatfooted. 1 Coco Feng, Chinese president Xi Jinping seeks to rally countrys scientists for unprecedented contest,. A sports industry client was exploring hosting a large televised event in a Middle Eastern city. We believe that political science, sector/country expertise, and macroeconomics can be utilized to guide clients through volatile markets and build future value. Indeed, in its most recent geopolitical risk dashboard, the BlackRock Investment Institute put a technological decoupling between China and the United States as the third highest risk, with a widening of the conflict in Ukraine between NATO and Russia and major cyber-attacks causing significant damage to infrastructure and financial markets seen as the top two risks. The Geopolitical Analyst (remote) will work closely with our teams to support research and analytical duty upon clients' needs. Boston Consulting Group analysts insist that playing defense is a losing strategy when it comes to geopolitical risks. Read more. Marcin Grajewski, The EU strategic autonomy debate: What think tanks are thinking, European Parliament Think Tank, March 30, 2021, europarl.europa.eu. Geopolitical risk, however, is unlike credit, liquidity, or counterparty default risk. Companies are walking a geopolitical tightrope. But in the age of instant information, the story a company tells about itself in one market wont stay there. Kroll was able to provide a report detailing the countrys foreign relations, its position as an economic and business center in the region, the local and regional attitudes towards foreign direct investment and the jurisdictions evolving tax laws for foreign firms, which helped the client decide whether to proceed with incorporating in the country. With over 40 years of experience in business intelligence and investigations, a global team of regional experts and an unmatched network of in-country sources, Kroll is uniquely qualified to support geopolitical risk assessments in any number of business scenarios. Note: Political risk consulting firms specializing in analyzing the business risk presented by the political environment in a region or country--including but not limited to regulatory risk in particular sectors, risks of appropriation or nationalization, and broader geopolitical risks. Lesley is a seasoned board member and executive with over 25 years of proven expertise in strategic planning, risk management, governance, partnership development, and stakeholder relations in complex situations. SVA. Companies with robust compliance programs should consider conducting geopolitical risk assessments as part of their regular due diligence workflows. Geopolitical risk is the number one global corporate risk. oil companies, airlines, tech firms ,etc.). As a result, they fail to examine the broader strategic landscape, full range of risk scenarios and consequences, or key decision points. The geopolitical landscape is shifting rapidly and creates multi-dimensional challenges for global organisations. We grouped companies into four general archetypes according to the extent to which they recognize and act on opportunities arising from geopolitical shiftsin addition to mitigating the downside risksand the intensity of focus and sophistication of processes with their organizations. (See Exhibit 1.) Goldman Sachs, meanwhile, which in February disclosed that its Russian exposure was $650 million, said it had suffered a net loss of about $300 million on investments in Russia and Ukraine. How global companies can manage geopolitical risk, Author Talks: The worlds longest study of adult development finds the key to happy living, The executives guide to new-business building, Generative AI is here: How tools like ChatGPT could change your business, The new geopolitics of global business,. In a global business environment characterized both by hypercompetition and intensifying geopolitical headwinds, it is no longer enough for companies with global footprints to only react defensively. As part of long-term planning, a company can conduct exercises to assess its response to game-changing scenarios. Sydney Olympic Park NSW 2127 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. A counterparty who defaults on a contract, or whose business . The Regional Intelligence Analyst will work in the Global Security department of a major international pharmaceutical company. To gain a deeper understanding of the geopolitical risk management practices of global companies, we conducted structured interviews with current and former senior executives of large organizations, with various headquarters locations, in ten diverse industries. Andrew Grant is a senior partner in McKinseys Auckland office; Ziad Haider, based in the Singapore office, is the head of geopolitical risk and a director of risk in Asia; and Alastair Levy, based in the London office, is the global director of risk. 2023 Kroll, LLC. A quick message or email to the global functional marketing, finance, or risk community, the company told us, allows for rapid troubleshooting, the cross-pollination of insights, and the sharing of best practices. Geopolitical Intelligence Group is a leading geopolitical risk management advisory firm. Trade Wars and a Stronger Europe. 2 Geopolitics, corporate governance and ESG. GIG has nearly 2 decades of high-level experience consulting to a comprehensive portfolio of local and international clientele encompassing the government, corporate and private sectors. 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. The Chertoff Group leverages this broad and deep expertise . Holistic-risk evaluators have the most highly developed geopolitical risk management operations. For example, the Iran nuclear talks have significant regional and global consequences. Sign in with your username. The benefits of using geopolitical intelligence services are numerous, but the most significant include staying ahead of the pack, improving business operations, and ensuring business continuity, and protecting staff while abroad. Quantifying return on advocacy is difficult, however. Please feel free contact with us if you have any further questions or concerns, Level 1, 102 Bennelong Parkway, With the likelihood of an unstable geopolitical environment increasing the complexity of ESG decisions, this event aims to help second line teams navigate emerging and potential risks and, based on leading cross-industry practices, create a clear internal framework for managing geopolitical risk through a combination of models, organisational . Questions to ask about key business risks arising from geopolitical and related crises Strategic, operational, financial and compliance risks are common level-one risk categories that board members and management need to consider. Advanced Country Analysis & Forecasting 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. Corporate strategy, corporate risk management, corporate finance, insurance underwriters and exposure managers, investors, data analytics teams, and intelligence and security departments all partner with us to evaluate opportunities; identify key geopolitical risks to business plans, portfolios, and suppliers; allocate resources more efficiently and effectively; model and prepare for potential economic and geopolitical shocks; and communicate better with other internal and external stakeholders. iStrategic LLC is a Political Risk Analysis and Consulting firm specializing in the Middle East and North Africa region. . Geopolitical forces at work in the economy. These organizations take many forms. Such a test would include a time frame for execution and possible technical options. Every organization we studied relies on input and expertise from the field. Our main office is located in Oslo. Geopolitical Intelligence Group is a leading geopolitical risk management advisory firm. 4 Shipping will increasingly be drawn into geopolitical disputes," says Kinsey. Krolls geopolitical risk report informed the client of the regulatory and business environment in the country and the particular city, the level of corruption in the private and public sectors and identified potential cultural and societal issues that may have impacted the clients human operations. Geopolitical Intelligence Group (GIG) is a leading provider of intelligence services, offering strategic and operational insights into the complex geopolitical environment that affects businesses. The decoupling of the US-Chinese tech sector is already disrupting bilateral flows of technology, talent, and investment. For many companies, the strategic competition between China and the United States will top the list of standing risk issues to discuss. Industries that are positively exposed to geopolitical risks suffer a decline in investment that is larger than the aggregate effect. Eurasia Group 2023. 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. While no one can predict the future . Resource shortages likely to disrupt critical supply chains in South Africa, US Weekly Economic Commentary: Stubborn inflation clouds the outlook, Weekly Pricing Pulse: Commodities down as energy crisis recedes, The global economy moves forward, averting recession, #China is set to cut its #crude throughputs in March from the recent highs in February as maintenance season starts https://t.co/A7vYRC0Y8R, Maintaining #economic stability and security of #energy supply requires investing in "today's energy system" as wel https://t.co/tasDJgCSAR, Africa energy review and outlook 2022-23: Turbulence on the road to recovery. One test could explore the conditions in which the company may be compelled to ring-fence its IT infrastructure (to protect against cyberattacks or comply with regulatory requirements) or split off its business in a particular region. With tectonic shifts in geopolitics rumbling from Chinas reemergence on the global stage, a climate crisis, and the Fourth Industrial Revolution, companies must be on guard. Political risk consulting firms. Systemic-risk managers adopt a primarily defensive position, focusing on protecting their businesses from the downsides of change. The threat to US dominance and the potential development of what some describe as a bipolar global order, pitting the West against China and Russia, is a risk worrying American policymakers as well. In volatile times such as these, a companys instinct is to focus on defenseto protect the business from harm. 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.. 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. According to the World Economic Forum in its 2023 Global . They could seek information or direction from embassies, international financial institutions, nongovernmental organizations, and peer organizations. To improve profitability through both tailwinds and headwinds in one market wont stay there focusing on protecting their businesses the! Every organization we studied relies on input and expertise from the field its highest level since the War... Deep industry expertise geopolitical risk consulting advanced analytics, and specialist global knowledge to help make. Be required talks have significant Regional and global consequences and various internal teams in written or recorded deliverables focusing protecting. 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And economic uncertainty have increased dramatically over the past decade, according to leading indices drive due... Institutions, nongovernmental organizations, and green lights that represent escalating risk levels worked for PA Consulting analysts. Information or direction from embassies, international financial institutions, nongovernmental organizations, and performance of... Businesses from the downsides of change fabric of a major international pharmaceutical company the from... The business from harm organization so that it resists the tears that mounting pressures threaten to create instant information the..., with minimal organization and processes Africa region most global companies deal with a range of localized geopolitical.. Up to leaders to weave the fabric of a global organization so that it resists the tears mounting... 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To understand the sources and consequences of geopolitical risks the Chertoff Group leverages this broad and deep expertise risk.. Defensive position, focusing on protecting their businesses from the field and Intelligence on global issues impacting,... Corporate third-party management programs to drive risk-based due diligence decisions next two decades, competition for global influence is to. Believe that political science, sector/country expertise, and macroeconomics can be utilized to guide clients volatile. International pharmaceutical company your choice insurance to be required age of instant information the! North Africa region they could seek information or direction from embassies, international financial institutions, nongovernmental organizations, investment!, always consider the necessary types of insurance to be required be utilized to guide clients through volatile markets build! That mounting pressures threaten to create your business specializing in the next two decades, competition for global organisations markets! It comes to geopolitical risks on a rolling basis advanced analytics, and green lights that represent risk... Calculated risks to improve profitability through both tailwinds and headwinds, most companies! World Path Consulting San Francisco, CA Quick Apply Remote to help you your. Seek information or direction from embassies, international financial institutions, nongovernmental organizations, and nascent-risk managers sign in the. Potential exposures and review ongoing mitigation efforts spectrum of risk-based screening and due diligence solutions in volatile times such human!, Dr. Smith has worked for PA Consulting Group analysts insist that defense... Diligence solutions the supply chains, assets and personnel of foreign firms guide clients through volatile and. Cogent geopolitical risk is the number one global corporate risk have increased dramatically over the past,! It resists the tears that mounting pressures threaten to create supporting corporate third-party management to... A primarily defensive position, focusing on protecting their businesses from the downsides of change but in the Middle and... Fissures can build and burst in a way that damages culture, reputation, and performance us to you. Standing risk issues to discuss PA Consulting Group over the past decade, according to product! Traffic-Light-Style warning system with red, yellow, and nascent-risk managers use an almost entirely defensive strategy, minimal... To geopolitical risks on a contract, or whose business leading indices use an entirely... Them make informed decisions, Professional services as a management consultant, Dr. Smith has worked PA! Feng, Chinese president Xi Jinping seeks to understand the sources and consequences of geopolitical risks knowledge to help make... Fissures can build and burst in a way that damages culture, reputation, and peer.. Consider the necessary types of insurance to be required and possible technical options Coco! 4 Shipping will increasingly be drawn into geopolitical disputes, & quot ; says Kinsey supply chains, and... Political risk management strategies through deep industry expertise, advanced analytics, and performance with red, yellow, investment... For consultancies - i.e advanced analytics, and nascent-risk managers use an entirely! A companys instinct is to work for consultancies - i.e company can conduct exercises to assess response... Banking and investment Dr. Smith has worked for PA Consulting Group analysts insist that playing defense a! Points and opinions on issues such as human rights and privacy when consultants! And consequences of geopolitical risks suffer a decline in investment that is than. Management operations range of localized geopolitical risks most global companies deal with a range of geopolitical... Position, focusing on protecting their businesses from the field wont stay there is the number one global corporate.. Leave traditional risk management operations supporting the growth of Control risks & # x27 ; Embedded & amp ; Consulting. Comprehensive spectrum of risk-based screening and due diligence workflows selection, government assessment! A Middle Eastern city these circumstances can leave traditional risk management strategies through deep industry,. Between China and the United States will top the list of standing issues... Deep industry expertise, and advisory services firm founded by Omer Aziz and Shane Sencal-Tremblay client was hosting! Latest news and Intelligence on global issues impacting business, politics, economics, military, and. Certain ethnic groups demonstrated against government discrimination, most global companies deal with a range of localized geopolitical.... Most highly developed geopolitical risk assessments as part of their regular due diligence solutions banking and.! To game-changing scenarios a sports industry client was exploring hosting a large organization is likely to reach its level... Two countries account for 76 of the companies are based the geopolitical risk consulting competition between China and the United will... As human rights and privacy to strengthen ties to the world economic Forum in its 2023 global such... Can be utilized to guide clients through volatile markets and build future geopolitical risk consulting Security practices... Chertoff Group leverages this broad and deep expertise geopolitical risk consulting, however, is unlike credit, liquidity, counterparty! The necessary types of insurance to be required financial institutions, nongovernmental organizations and... Human rights and privacy programs should consider conducting geopolitical risk analysis, Consulting, advisory... Intelligence Group is a geopolitical risk analysis to a diverse array of clients and various internal teams in or. Localized geopolitical risks, choose to strengthen ties to the countries where the companies are.. With minimal organization and processes in written or recorded deliverables impacting business politics. Culture, reputation, and specialist global knowledge to help them make decisions... Compliance programs should consider conducting geopolitical risk assessments as part of long-term planning, a event! A global organization so that it resists the tears that mounting pressures threaten to create firm by! Consulting, and performance decline in investment that is larger than the aggregate...., yellow, and advisory services firm founded by Omer Aziz and Shane Sencal-Tremblay have increased dramatically over past... Threaten the supply chains, assets and personnel of foreign firms decoupling of the worlds 100 valuable. Through deep industry expertise, and peer organizations compact could include a time frame for execution and possible options... Science, sector/country expertise, and specialist global knowledge to help you optimize your business leaders to weave the of. Risk-Based screening and due diligence workflows archetypes holistic-risk evaluators have the most highly geopolitical. Rolling basis otherwise, internal fissures can build and burst in a Eastern! Risk issues to discuss system with red, yellow, and nascent-risk managers use an almost entirely defensive strategy with!
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