All rights reserved. Technology, especially, has become what Chinese president Xi Jinping has called the main battleground of global power rivalry.
As weve seen, informal functional networks throughout organizations can enable the rapid sharing of data and improve the identification and mitigation of geopolitical risks. Subscribed to {PRACTICE_NAME} email alerts. Coco Feng, Chinese president Xi Jinping seeks to rally countrys scientists for unprecedented contest,. 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. As the former Intel CEO Andy Grove famously put it, Only the paranoid survive.
Another short-term action is to invest in strategy, PR, and government-relations teams that can serve as the companys points of contact with senior government officials and key stakeholders in multiple jurisdictions.
Our intelligence team works with regional field ops who know every corner of the . From project or investment selection, through market entry and ongoing risk monitoring and management, we can support you with actionable intelligence, business relevant forecasts, and tailored solutions. But so do some pharmaceutical, technology, and packaged goods companies. Some foreign firms, who were perceived as having received favoritism from the Ethiopian government, were specifically targeted by protesters and the government had to declare multiple states of emergencies that were extremely disruptive to the business operations of those foreign firms. New York NY 10055. Copyright 2018-2022 Geopolitical Intelligence Group a division of the Praesidium Advisory Group, Get timely updates from your favorite products. The negative effects of climate change and progressively severe and frequent extreme weather events are becoming harder to ignore. Idiosyncratic geopolitical riskconstructed using the transcripts of firms' earnings calls, and Geostrategic Business Group | EY - Global Close search Trending Why Chief Marketing Officers should be central to every transformation 31 Jan 2023 Consulting The CEO Imperative: How will CEOs respond to a new recession reality? Related Expertise: We evaluated their organizations approaches along three dimensions: the strategic role of geopolitical risk management within the company, the ways in which different parts of the organization are leveraged, and the use of risk management processes and tools. firms, Expand your audience and your capabilities by joining our partner program, Integrate Thomson Reuters content and functionality to enhance your tools and workflows, Offering insight into corporations in the U.S. and abroad, Insights on issues concerning environmental, social, and governance topics, A look into the inner workings of government and the courts, Legal coverage focusing on the business and practice of law, Featuring an expanded insight into the world of tax professionals, Technology and innovation resource center, Exploring how technology and innovation will influence the evolution of future services, About Thomson Boston Consulting Group 2023. 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. 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. your toughest business challenges, Government professionals The EY survey last year on bank risk management noted that chief risk officers may be underestimating the potency of political change (with) only about half viewing (geo)political risks as among the most important emerging risks over a five-year horizon this is down from 60% in our last survey in 2019. In . Geopolitical risk assessments consist of identifying possible risks, assessing the likely impact of those risks and making recommendations to manage, mitigate and respond to them. But the discussions often focus on a specific investment, project, or market entry or exit. 3
iStrategic LLC is a Political Risk Analysis and Consulting firm specializing in the Middle East and North Africa region. Global Trends 2040: A more contested world, US National Intelligence Council, March 2021, dni.gov. Geopolitical risk assessments consist of identifying possible risks, assessing the likely impact of those risks and making recommendations to manage, mitigate and respond to them. 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. 2. People may worry that a company will hold itself to different standards in different regions. The company could have focused mainly on trying to prove that there was no reason for concern. High levels of corruption among lawmakers can make securing the necessary licenses, permits and registrations an arduous process, especially whilst also staying in compliance with wide-reaching laws like the U.S. FCPA. 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. Any copying or distribution of Eurasia Group materials is prohibited. 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. Thank you! A confirmation email has been sent to you. 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. 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. The other stream is to work for such client companies directly, in an "in-house" role - i.e. Evaluate key infrastructure and access to electricity, internet, labor, etc. accounting technology, guidance, and expertise, Let us help you solve Rasmussen Global offers political risk assessments for actors who operate in environments affected by geopolitical trends. One short-term action that a company can take is establishing a crisis-response unit to take the lead on identifying potential risks and developing mitigation strategies. Providing a regular forum for a board to examine pressure points and operating realities from multiple perspectives and air diverging views doesnt just improve decision making and establish an organizations appetite for riskit helps create consensus across leadership on the issues of the day. If an energy company mismanages the environmental, political, and regulatory fallout from a disastrous oil spill, for example, it could potentially lose its license to operate in that countryboth legally and metaphorically, in terms of public acceptance. Start with the board Many company boards already deliberate geopolitical risks to one degree or another. Political Risk Consultancy We are specialists in providing economic and political risk consultancy. trust us to help them make informed decisions, Professional services by
Organizations can be prepared to respond to geopolitical risks across multiple time frames. Its up to leaders to weave the fabric of a global organization so that it resists the tears that mounting pressures threaten to create. In such discussions, its of utmost importance to make sure that all affected geographic regions are represented. 5
5. As a geopolitical risk analyst, your job is to conduct an analysis of the geographic and political risks to investments. 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 Volatility and Risk Institute has embarked on a study of geopolitical risk and its relation to financial risks. Discussions can focus on three risk areas: brand and reputation; operational issues, such as cybersecurity strategy; and products, services, and partnerships. 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. For instance, it can compensate for the value of an asset following an expropriation or . 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 Independent data and analysis for opportunity sizing, local partner selection, government stakeholder assessment and risk assessment. MPhil student at the University of Cambridge, intending to go into postgrad education to the PhD level. 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. 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. Many governments have introduced laws requiring companies to take actions to mitigate the risk of adverse human rights impacts. Read our @SPGCI report: https://t.co/3wDIVkZ5hW, For the first time since 2006, The Progressive Corp. recorded more personal lines net premiums written than GEICO C https://t.co/DeF2omCrl0, Occidental #Petroleum's chemical division sees lingering uncertainty in polyvinyl chloride and caustic soda demand https://t.co/9cqw2zMJPo, {
Our global multidisciplinary teams offer strategic legal and regulatory advice to help . While there is no universal formula for success, building robust geopolitical risk management organizations and processes is key to begin navigating an uncertain world. Any discussion of such potentially existential issues must start at the top. 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 In 2017, violence erupted in parts of Ethiopia as certain ethnic groups demonstrated against government discrimination. We study the dynamic effect of industry- and firm-specific geopolitical risk on firm-level investment. Boston Consulting Group analysts insist that playing defense is a losing strategy when it comes to geopolitical risks. Geopolitical risk monitoring Read more Read less Comprehensive monitoring of physical security and regulatory challenges facing business operations in any country and globally. Atlas Risk Group is a geopolitical risk analysis, consulting, and advisory services firm founded by Omer Aziz and Shane Sencal-Tremblay. 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. BCG's international trade consulting experts help companies make the right movesand mitigate riskto unlock competitive advantage.
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. 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. Others may opt to identify as global entities because of the access it accords them to pursue business opportunities in emerging markets. Please feel free contact with us if you have any further questions or concerns, Level 1, 102 Bennelong Parkway,
Build a geopolitical risk management center of expertise or a network that unites employees across the organization to share expertise and best practices and to ensure collaboration. For the past three decades, going global meant unlocking specialization and . Some companies, however, not only navigate disruption successfully but actually thrive because of it. The risks to be assessed could be financial, hazardous to peoples safety, legal, political, or reputational. A client operating in the entertainment industry was seeking to incorporate in a foreign jurisdiction from which it would base its regional activities. Expropriation
In 2016, Brazils Kayap indigenous community successfully stopped the construction of a gold mine, claiming that mercury and other pollutants from the mine would leak into the river Curu, the communitys main source of food and livelihood. A compact could include a traffic-light-style warning system with red, yellow, and green lights that represent escalating risk levels. One consumer packaged goods company we studied has developed a strong knowledge-sharing culture among functional networks. The decoupling of the US-Chinese tech sector is already disrupting bilateral flows of technology, talent, and investment. 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. Sometimes, the payoff is simply that the company can continue doing business as usual. They may have to balance, given the risks, near- and long-term market priorities. 4
Geopolitical shifts and technology changes are transforming international trade, creating both risks and opportunities for companies that can navigate this new environment. Our operational and strategic advisory services inform our clients with valuable . Yet few companies consistently act on it. FS firms face a "trilemma" of rising inflation, energy insecurity and disrupted supply chains, as well as longer-term geopolitical change and megatrends. As political frictions inside and among regions heat up, the likelihood increases that they will affect a global enterprises operations, performance, or people. ByClint Follette,Marc Gilbert,Ilshat Haris,Michael McAdoo, andPattabi Seshadri. Odyssey is a geopolitical consultancy trained to assist you in understanding sensitive geopolitical issues. Already a member? Cyber risks are believed to have the deepest impact on supply chains rated by 34% as a high impact and 54% as medium. Geopolitical Intelligence Group: Staying Ahead with Intelligence Servicesit. Capital reserves, credit portfolios, investment policies and capital and debt profiles all demand constant scrutiny to adequately manage and mitigate risk. Taking a bionic approach to digital transformation can lead to successful business outcomes. In a world where nationalistic sentiments are on the rise, no country dominates, and regulations and standards are fragmenting, such situations are bound to accelerate. Work with us to identify the organizations and individuals with influence and decision-making power critical to your business success, Integrity Due Diligence & Integrity Consulting Not many bankers want to grapple with that shift because it is inconvenient and depressing.. 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. Such a test would include a time frame for execution and possible technical options. Political risk monitoring. Ian Bremmer is the president and founder of Eurasia Group, the leading global political risk research and consulting firm started in 1998. Supporting the growth of Control Risks' Embedded & Security Consulting practices throughout APAC. Derek Leatherdale and Hanif Barma from the Risk Coalition identify in this article the key things that any board or risk committee should consider in the context of the complex and volatile geopolitical environment in which business now operates. The businesss board can apply a materiality test to pinpoint what it should dedicate time to discussing. (2019). In the face of fragmentation and uncertainty, many business leaders are responding by intensifying their focus on resilience. The firm serves financial institutions, private equity . The firm's new geopolitical advisory team is being launched as multinational corporations grapple with volatile events around the world, from Russia's invasion of Ukraine to simmering tensions. No matter their starting point, BCG can help. Regulatory Burdens
The companies with the most disciplined approach, however, often use a combination of processes and tools to look at risks during different time frames and with different rates of periodic review. Failing to adequately consider risk limitations and allocations when drafting integrated project contracts can result in the unintended consequence of your firm paying for the errors or omissions of your subconsultants. A counterparty who defaults on a contract, or whose business . Economic and Geopolitical scenarios Join Tom Sanderson, the founder and principal of Tom Sanderson Consulting, a field-based, global-risk research and advisory firm based in the Washington, DC area for a discussion on: careers in geopolitical risk consulting; the Middle East as it relates to the war in Ukraine and China's threat to Taiwan; and field work in hostile terrain. 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. Managing volatility requires an understanding of the impact on business, customers and environment. The Regional Intelligence Analyst will work in the Global Security department of a major international pharmaceutical company. Reputational risk could be amplified if any or all of these risks are not mitigated properly. 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. The bank also attributed $120 million of a $524 million trading loss during the first quarter to its role as one of the counterparties in a short trade by Chinese metals group Tsingshan that went south amid the market turmoil that followed the outbreak of war. 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. Our Asia-Pacific footprint is now a huge advantage.. The Geopolitical Analyst (remote) will work closely with our teams to support research and analytical duty upon clients' needs. Our intelligence analysts are building on 20 years experience in understanding political risks faced by our clients in insurance and financial services.
A company could apply the warning system to the sectors in which it operates. Global geopolitical risk and economic uncertainty have increased dramatically over the past decade, according to leading indices. The new geopolitics of global business, Economist, June 5, 2021, economist.com. Similarly, the Netherlands recently adopted legislation to prevent the use of child labor within the supply chains of Dutch companies and foreign companies doing business in the region. Norwegian Risk Consulting International - NRCI - is a geopolitical risk consultancy founded in 2010. And differences can dissolve into disagreements about risk and In such sessions, the high-level stakeholders can discuss the companys potential exposures and review ongoing mitigation efforts. Site by Odgis+Co and ICVM Group. Turning Geopolitical Risk into Strategic Advantage, Technology, Media, and Telecommunications, Designing Resilience into Global Supply Chains, How President-Elect Biden Will Approach Global Trade, Whats at Stake If the US and China Really Decouple, Assessing Approaches to Geopolitical Risk Management. Trade Consulting experts help companies make the right movesand mitigate riskto unlock competitive advantage business in., political, or whose business who defaults on a specific investment, project, or whose.! Key infrastructure and access to electricity, internet, labor, etc firm in... Volatility requires an understanding of the US-Chinese tech sector is already disrupting bilateral flows of technology,,! So do some pharmaceutical, technology, especially, has become what Chinese Xi! 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