By using our website you consent to our Terms and Conditions and Privacy Policy, including the transfer of your personal data to the United States from your country of residence (if different), and our use of cookies as described in our Cookie Policy. 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. Each event carries it own risks, and each risk its own consequences. 1. Having an intimate knowledge of these diverse, complex and developing dynamics is critical in order to identify challenges before they become problems. Any discussion of such potentially existential issues must start at the top. Boston Consulting Group analysts insist that playing defense is a losing strategy when it comes to geopolitical risks. Business strategy and operational efficiency require constant evaluation in a complex and often volatile environment. We help companies anticipate and quantify critical external strategic business risks that might adversely impact their investments, personnel, interests, and assets anywhere in the world. Our intelligence analysts are building on 20 years experience in understanding political risks faced by our clients in insurance and financial services. Our intelligence team works with regional field ops who know every corner of the . 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. This sentiment largely continued in the second . 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. Improve your understanding and modeling of country and economic risk across countries and sectors. While no one can predict the future . Site by Odgis+Co and ICVM Group. But if those talks dont directly affect a companys operations, its board may not need to dedicate time to them. {"name":"login","url":"","enabled":false,"desc":", Discover more about S&P Globals offerings, Learn how we can help you manage geopolitical risk, Differentiating geopolitical risk for profitable investing, Let our risk ratings guide your decisions, M&A In Focus: Tech Acquisitions and the New Normal in 2023, Assessing the impact of the U.S. Government Accountability Office recommendations on Export Control Compliance at universities, Foresight Security for Corporate Security, Integrity Due Diligence & Integrity Consulting, Benchmarking, Pricing and Aggregation, and Scenario Analysis. The decoupling of the US-Chinese tech sector is already disrupting bilateral flows of technology, talent, and investment. For the past three decades, going global meant unlocking specialization and . Holistic-risk evaluators have the most highly developed geopolitical risk management operations. Not considering external perspectives runs the risk of following an approach thats too narrow or insular. Careless efforts to understand the social and cultural dynamics of the communities in which foreign firms operate, and superficial attempts to engage local stakeholders, can quickly turn into biases and resentment and lead to boycotts, protests and negative media attention. International Business, March 30, 2021 Australia. 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. Please try again later. In much the same way that companies screen for ultimate beneficial ownership or reputational risk as part of their pre-investment or pre-partnership due diligence processes, companies should conduct geopolitical due diligence before entering an emerging or volatile market or ahead of a business partnership with a company in a jurisdiction that they dont have a deep understanding of. Geopolitical risk monitoring Read more Read less Comprehensive monitoring of physical security and regulatory challenges facing business operations in any country and globally. 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. 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. Many company boards already deliberate geopolitical risks to one degree or another. Our . Trade Wars and a Stronger Europe. Subscribed to {PRACTICE_NAME} email alerts. We provide geopolitical risk consulting and advisory services and solutions that are timely, market-relevant and forward-looking. Key features of our political risk service include: Political risk analysis and assessments. 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. Discussions can focus on three risk areas: brand and reputation; operational issues, such as cybersecurity strategy; and products, services, and partnerships. . Economic uncertainty (32%) and inflation (26%) are among the leading factors underlying supply chain risks. Boston Consulting Group 2023. Many companies, both financial and non-financial, were caught off guard, despite Putin having telegraphed his intentions for months in advance. We have updated our Privacy Policy and Terms of Use for Eurasia Group and its affiliates to clarify the types of data we collect, how we collect it, how we use data and with whom we share data. The Ukraine war is likely to drive geopolitical fragmentation and the emergence of blocs, in our view, BlackRock said in its report. | Learn more about Avery Benton's work experience, education, connections & more by visiting their . Its up to leaders to weave the fabric of a global organization so that it resists the tears that mounting pressures threaten to create. Building a more holistic and entrepreneurial approach requires action in all three dimensions: enhancing the strategic role of risk management, ingraining it into the organization, and developing robust processes. Risk entrepreneurs also take a holistic approach to geopolitical risk management, but they do so in a less structured and centralized way. Speaking to the Atlantic Council recently, US Treasury Secretary Janet Yellen warned that it is imperative for the United States to work with China to avoid a bipolar monetary order emerging from the war in Ukraine and ongoing geo-political conflicts. Experienced in political affairs, non-profits, articles and blogs, with demonstrated skills in research and analysis on politics, policy, and history. There are no reliable historical streams of data that one can easily plug into a model. We study the dynamic effect of industry- and firm-specific geopolitical risk on firm-level investment. 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" : [ . Managing risk in today's environment is complex. and risk management resources for todays professional services 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. We found that there is no uniform approach to geopolitical risk management. Violence and Civil Unrest (2019). In this context, the word investment can refer to anything from purchasing shares of a company to trying to sell . 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. Global Trends 2040: A more contested world, US National Intelligence Council, March 2021, dni.gov. Stay connected with us and get all latest updates. World Path Consulting San Francisco, CA Quick Apply Remote. 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. As a geopolitical risk analyst, your job is to conduct an analysis of the geographic and political risks to investments. Most companies do not have a dedicated team of full-time employees devoted to geopolitical risk management. Evaluate key infrastructure and access to electricity, internet, labor, etc. To sharpen their view of the shifting global landscape, a growing number of major multinational corporations have been investing in their abilities to identify trends early and to influence the decisions of host governments ahead of major transitions, such as sudden changes in trade agreements or national governments. 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. Seek to continuously measure and monitor the impact of geopolitical risk management activities on the business. The teams can use the relationships that they develop with officials to share the companys perspectives on key issues and gain insights about potential regulatory actions or sanctions that could affect it. Companies with robust compliance programs should consider conducting geopolitical risk assessments as part of their regular due diligence workflows. 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. Article (7 pages) Geopolitical risk is at the top of the CEO agenda, according to McKinsey's latest survey of global economic conditions. 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. 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. The company could have focused mainly on trying to prove that there was no reason for concern. Our geopolitical risk intelligence solutions provide end-to-end coverage of political, violent, sovereign, banking and investment risk worldwide. 11 Jan 2023 CEO agenda Six ways asset managers can prepare for an uncertain future 2 Feb 2023 Wealth and asset management Major geopolitical events can often arise quickly and unpredictably. Convert risk into opportunity with bespoke solutions. Russia's invasion of Ukraine has . 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. . 2023 Kroll, LLC. 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 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. They could seek information or direction from embassies, international financial institutions, nongovernmental organizations, and peer organizations. Eurasia Group analysts leverage deep country and thematic expertise with quantitative methodologies to forecast fast-moving risks and opportunities. In such sessions, the high-level stakeholders can discuss the companys potential exposures and review ongoing mitigation efforts. 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. Nonetheless, the results highlighted the need for banks to embed political analysis into risk-based decision-making. The other stream is to work for such client companies directly, in an "in-house" role - i.e. }, Independent benchmark for external risk exposure to identify, evaluate and monitor of risk exposure with expert insight on the external facing operational and strategic risks. Thats one finding from the US National Intelligence Councils report Global Trends 2040: A more contested world. 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. Develop a pipeline of geopolitical risk management talent by rotating personnel with strong leadership potential through countries, establishing a more permanent team experienced in working with governments, and providing customized training that includes simulations of real-world cases. 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. Part of managing geopolitical risk is considering the ramifications of a companys core narrative. (See Exhibit 1.) Supporting the growth of Control Risks' Embedded & Security Consulting practices throughout APAC. Our geopolitical risk intelligence solutions provide end-to-end coverage of political, violent, sovereign, banking and investment risk worldwide. Build a geopolitical risk management center of expertise or a network that unites . Rasmussen Global offers political risk assessments for actors who operate in environments affected by geopolitical trends. For many companies, the strategic competition between China and the United States will top the list of standing risk issues to discuss. Related Expertise: Coco Feng, Chinese president Xi Jinping seeks to rally countrys scientists for unprecedented contest, South China Morning Post, May 29, 2021, scmp.com. 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 company could apply the warning system to the sectors in which it operates. Stratfor Worldview is the world's leading geopolitical intelligence platform. 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. No matter their starting point, BCG can help. Every organization we studied relies on input and expertise from the field. Such external pressures exert other internal pressures on corporate leaders. 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. Sometimes, the payoff is simply that the company can continue doing business as usual. Obtain the data you need to make the most informed decisions by accessing our extensive portfolio of information, analytics, and expertise. 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.. Geopolitical Intelligence Group is a leading geopolitical risk management advisory firm. 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. 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. Many governments have introduced laws requiring companies to take actions to mitigate the risk of adverse human rights impacts. 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. Copyright 2018-2022 Geopolitical Intelligence Group a division of the Praesidium Advisory Group, Get timely updates from your favorite products. Considered among the world's foremost experts in their respective subject areas, our analysts provide tailored support to the world's top investors, executives . Get the latest news and intelligence on global issues impacting business, politics, economics, military, security and energy. & account inquiries, For CA: Do not sell my personal information. 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. Sign up to receive periodic news, reports, and invitations from Kroll. The businesss board can apply a materiality test to pinpoint what it should dedicate time to discussing. Risk assessments as part of their regular due diligence workflows an analysis of.... Geopolitical Trends by geopolitical Trends we found that there was no reason for concern, labor etc... 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With regional field ops who know every corner of the Praesidium advisory Group, get updates... To receive periodic news, reports, and invitations from Kroll consider conducting geopolitical risk management s work,! Their regular due diligence workflows by our clients in insurance and financial services stream. So in a less structured and centralized way view, BlackRock said in its.. Provide end-to-end coverage of political, violent, sovereign, banking and investment sector is already disrupting flows! Are no reliable historical streams of data that one can easily plug into model! Security Consulting practices throughout APAC of these diverse, complex and developing dynamics is critical in order to identify before!

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