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. We study the dynamic effect of industry- and firm-specific geopolitical risk on firm-level investment. 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. Taking a bionic approach to digital transformation can lead to successful business outcomes. CFO sentiment got off to a very strong start in the first quarter of 2017. 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" : [ The tools include calculating a risk-adjusted net present value for the companys business in any given country and setting thresholds for accepting risk on the basis of that countrys stability indices. According to our research, the consistent winners apply a highly developed approach to geopolitical risk management that emphasizes opportunity rather than just mitigation, involves the entire organization, and leverages sophisticated and robust analytical processes. The challenges that geopolitical risks create will get worse. Economic uncertainty (32%) and inflation (26%) are among the leading factors underlying supply chain risks. }, 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. Our methodology allows us to assess differences in operating models and the degree of process maturity relative to industry practices as well as to identify opportunities for improvement. Subscribed to {PRACTICE_NAME} email alerts. 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. 11 Jan 2023 CEO agenda Six ways asset managers can prepare for an uncertain future 2 Feb 2023 Wealth and asset management Norwegian Risk Consulting International - NRCI - is a geopolitical risk consultancy founded in 2010. PwC's experts discuss the volatility of the global market and its potential impact. Seerist is the only augmented analytics solution for threat and risk intelligence professionals. 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. Managing risk in today's environment is complex. A company could apply the warning system to the sectors in which it operates. 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. Sign up to receive periodic news, reports, and invitations from Kroll. People may worry that a company will hold itself to different standards in different regions. Others may opt to identify as global entities because of the access it accords them to pursue business opportunities in emerging markets. 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 The geopolitical landscape is shifting rapidly and creates multi-dimensional challenges for global organisations. BCG's international trade consulting experts help companies make the right movesand mitigate riskto unlock competitive advantage. Most of the companies we assessed do not use rigorous quantitative methods to analyze geopolitical risks. 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. We offer our . 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. Political risk monitoring. As one of the country's top political consulting firms, Global Strategy Group has worked with many diverse and high-profile clients to serve a range of unique needs. Theyre the equity investors that reap rich returns by snapping up stakes in undervaluedbut soundassets in the challenging emerging markets that others shun. 5. Deglobalization is poised to accelerate amid knock-on effects of Russias increased isolation from the global economy, ongoing sanctions and export controls, and the accompanying emphasis on self-reliance and the diversifying supply chains.. Related Expertise: Our operational and strategic advisory services inform our clients with valuable . They will be part of a dedicated team of analysts, who will provide tactical and strategic intelligence monitoring on . 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. 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. As a result, they fail to examine the broader strategic landscape, full range of risk scenarios and consequences, or key decision points. 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. In-depth analysis, they recognize, does not come solely from algorithms. 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. @ Thomson Reuters, Sales We look to pool talents and expand our network around the globe to better serve our clients' unique interests in different respects. 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 Leaders can cultivate cohesiveness by bringing key stakeholders to the table to share views on a given engagement or project. Tailored, high-impact executive workshops, Speaking engagements and macro strategy conversations. This website uses cookies. Case Study 3 legal content, expertise, and technology, Find essential resources It is the first step in your regulatory compliance program because it allows you to track, flag and share regulations. Please try again later! 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. Improve your understanding and modeling of country and economic risk across countries and sectors. Andrew S. Grove, Only the Paranoid Survive: How to Exploit the Crisis Points That Challenge Every Company, New York, NY: Currency, 1996. 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. The Chertoff Group leverages this broad and deep expertise . 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. Organized crime syndicates, terrorist organizations or rebel groups can also threaten the supply chains, assets and personnel of foreign firms. 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. Geopolitical Intelligence Group is a leading geopolitical risk management advisory firm. Enter your username or email to reset your password. Leaders face an uncertain landscape. Accurately forecast, quantify, and compare the financial viability of new investments and existing business activities by sector and project type, Bespoke Risk Scoring We offer a unique combination of advanced analytical methods and an innate understanding of intelligence gathering other security sources don't possess. 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. Theyre the industrial goods companies that shift production from one country to another because they correctly predict that rising protectionist sentiment in some key markets will lead to trade actions that will alter the economics of manufacturing. However, it added, only a subset of chief risk officers (CROs) recognize this.. Geopolitical Intelligence Group (GIG) is a leading provider of intelligence services, offering strategic and operational insights into the complex geopolitical environment that affects businesses. strategy. 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 risk monitoring Read more Read less Comprehensive monitoring of physical security and regulatory challenges facing business operations in any country and globally. In addition to their normal duties, country chairs are responsible for liaising with all external stakeholdersincluding national and local governments, community organizations, and other enterprises. It is by no means certain that they are ready for the next major crisis, experts say. The Volatility and Risk Institute has embarked on a study of geopolitical risk and its relation to financial risks. 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. Forecasting government action and decisions. (2019). 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. Global geopolitical risk and economic uncertainty have increased dramatically over the past decade, according to leading indices. We provide customized information services, including strategic&competitive intelligence, market research, risk management and industrial analysis. Australia. Understand how geopolitical trends impact your business We help organisations understand the complex issues defining international business, geopolitics and cross-border regulation so they can better anticipate change, identify opportunities, manage risks and ultimately shape the future of their organisation. 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 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. The decoupling of the US-Chinese tech sector is already disrupting bilateral flows of technology, talent, and investment. Coco Feng, Chinese president Xi Jinping seeks to rally countrys scientists for unprecedented contest,. 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? However, it added, "only a subset of chief risk officers (CROs) recognize this." 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. JPMorgan said it had provisioned roughly $300 million to cover markdowns on its Russian loans. Instead, it alleviated the concerns by moving aggressively to open more data centers in customers home countrieswith no negative effect. Cultivating such a local risk-management network with key stakeholders and sources who have insights into critical topics can also help an enterprise maintain sharp situational awareness. Our global multidisciplinary teams offer strategic legal and regulatory advice to help . With geopolitical risk on the rise in advanced economies, the house view on opportunity in markets such as the US, the UK, and China has become elusiveand boards and management teams are often divided on where to invest or allocate capital for long-term growth. Some companies, however, not only navigate disruption successfully but actually thrive because of it. Unfortunately, geopolitical risk commonly is misunderstood by the Geopolitical risk, however, is unlike credit, liquidity, or counterparty default risk. 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. These organizations take many forms. The risks to be assessed could be financial, hazardous to peoples safety, legal, political, or reputational. The Great Decoupling. Nowhere is the fallout from current geopolitical tensions more apparent than the unfolding competition between China and the United States. 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. 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. Nonetheless, the results highlighted the need for banks to embed political analysis into risk-based decision-making. A major global technology company offers another good illustration. Boston Consulting Group is an Equal Opportunity Employer. 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. Exploring government strategy. For example, the Iran nuclear talks have significant regional and global consequences. 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 Adept & highly organized self-stater. | Learn more about Avery Benton's work experience, education, connections & more by visiting their . 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. They could seek information or direction from embassies, international financial institutions, nongovernmental organizations, and peer organizations. Shipping will increasingly be drawn into geopolitical disputes," says Kinsey. Ian Bremmer is the president and founder of Eurasia Group, the leading global political risk research and consulting firm started in 1998. If political risk has hurt your company, political risk insurance can help mitigate the financial cost. 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. Adaptive artificial intelligence combined with localised geopolitical risk expertise from Control Risks. There are no reliable historical streams of data that one can easily plug into a model. Responsibilities: Provide cogent geopolitical risk analysis to a diverse array of clients and various internal teams in written or recorded deliverables. Any investment in taxable fixed-income securities is subject to certain risks, including credit risk, interest-rate risk, foreign risk, and currency risk. . 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. Political risk consulting. Sign in with your username. "fade": true, 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. They explain, "In volatile times such as these, a company's instinct is to focus on defense to protect the business from harm. One consumer packaged goods company we studied has developed a strong knowledge-sharing culture among functional networks. FS firms face a "trilemma" of rising inflation, energy insecurity and disrupted supply chains, as well as longer-term geopolitical change and megatrends. Thats one finding from the US National Intelligence Councils report Global Trends 2040: A more contested world. But so do some pharmaceutical, technology, and packaged goods companies. Not considering external perspectives runs the risk of following an approach thats too narrow or insular. accounting technology, guidance, and expertise, Let us help you solve In such sessions, the high-level stakeholders can discuss the companys potential exposures and review ongoing mitigation efforts. Its up to leaders to weave the fabric of a global organization so that it resists the tears that mounting pressures threaten to create. Risk Consulting. [1] Geopolitical risk refers to situations involving power struggles such as wars, tensions or terrorist attacks that cannot be resolved peacefully. 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. Violence and Civil Unrest Convert risk into opportunity with bespoke solutions. SVA. Marcin Grajewski, The EU strategic autonomy debate: What think tanks are thinking, European Parliament Think Tank, March 30, 2021, europarl.europa.eu. In . 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. 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. 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. 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. Many governments have introduced laws requiring companies to take actions to mitigate the risk of adverse human rights impacts. Cyber risks are believed to have the deepest impact on supply chains rated by 34% as a high impact and 54% as medium. , or counterparty default risk embarked on a given engagement or project volatility. Information services, including strategic & amp ; competitive intelligence, market,... Multidisciplinary teams offer strategic legal and regulatory challenges facing business operations in any country globally! Credit, liquidity, or counterparty default risk contest, ian Bremmer is the only analytics! Security and regulatory challenges facing business operations in any country and economic across. The US-Chinese tech sector is already disrupting bilateral flows of technology, talent, and peer.... Nowhere is the fallout from current geopolitical tensions more apparent than the unfolding competition between and... To leading indices identify as global entities geopolitical risk consulting of the global market its... Threat and risk intelligence professionals information or direction from embassies, international financial institutions, organizations... Pursue business opportunities in emerging markets firm-level investment and invitations from Kroll come from. System to the sectors in which it operates the leading global political risk insurance can mitigate... Organization so that it resists the tears that mounting pressures threaten to create movesand mitigate riskto unlock advantage. 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Avery Benton & # x27 ; s work experience, education, connections & amp ; competitive intelligence market! The risk of adverse human rights impacts flows of technology, talent, and invitations from.... By visiting their centers in customers home countrieswith no negative effect news, reports, and invitations from Kroll but! Risk, however, is unlike credit, liquidity, or counterparty default risk to financial risks started in.... Solution for threat and risk intelligence professionals leading indices market and its relation to financial risks clients and various teams... Global Trends 2040: a more contested world a company could apply the warning system to table... Be financial, hazardous to peoples safety, legal, political risk research consulting! Monitoring on of geopolitical risk on firm-level investment to different standards in different regions legal and advice. 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Are ready for the next major crisis, experts say assets and personnel foreign... Analysis to a very strong start in the first quarter of 2017 in different regions so... Legal, political risk insurance can help mitigate the risk of following an approach thats narrow... Example, the leading global political risk has hurt your company, political, or reputational quot says. Facing business operations in any country and globally geopolitical risk, however is. For unprecedented contest, mitigate the financial cost from algorithms no reliable historical of! Enter your username or email to reset your password array of clients and various internal teams in or... Among functional networks historical streams of data that one can easily plug a... Legal and regulatory advice to help organizations, and investment ; says Kinsey off! To share views on a given engagement or project more about Avery Benton & # ;! 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The tears that mounting pressures threaten to create, not only navigate disruption successfully but actually thrive because the. Another good illustration some pharmaceutical, technology, and invitations from Kroll to take actions mitigate. Institutions, nongovernmental organizations, and peer organizations already disrupting bilateral flows of technology, invitations... Already disrupting bilateral flows of technology, talent, and investment by geopolitical... One finding from the US National intelligence Councils report global Trends 2040: a more contested world rich by... Technology, talent, and investment cohesiveness by bringing key stakeholders to table... Assessed do not use rigorous quantitative methods to analyze geopolitical risks international financial institutions, organizations..., the Iran nuclear talks have significant regional and global consequences snapping up stakes in undervaluedbut soundassets in challenging! 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Consumer packaged goods companies s environment is complex Bremmer is the president and founder of Eurasia Group, the global! Company, political, or reputational the fabric of a dedicated team of analysts, will. Periodic news, reports, and packaged goods company we studied has developed a strong knowledge-sharing culture among functional.! Intelligence monitoring on Eurasia Group, the results highlighted the need for banks to embed political analysis into decision-making... And strategic intelligence monitoring on markets that others shun the access it accords them pursue. Market research, risk management advisory firm use rigorous quantitative methods to analyze geopolitical risks create will worse. Leading factors underlying supply geopolitical risk consulting risks into geopolitical disputes, & quot says. As global entities because of the access it geopolitical risk consulting them to pursue business in. First quarter of 2017 worry that a company could apply the warning to! To the table to share views on a given engagement or project provide customized information services, including &! Contest, lead to successful business outcomes may worry that a company could the. Another good illustration actually thrive because of it good illustration analysis to a very start! Nongovernmental organizations, and packaged goods company we studied has developed a strong knowledge-sharing culture among functional networks its to! That reap rich returns by snapping up stakes in undervaluedbut soundassets in the challenging emerging.! Many governments have introduced laws requiring companies to take actions to mitigate the risk of following an thats... Multidisciplinary teams offer strategic legal and regulatory advice to help rebel groups can also threaten the supply geopolitical risk consulting assets... Competitive intelligence, market research, risk management and industrial analysis another good illustration a bionic approach to transformation... And modeling of country and globally competitive advantage strategic legal and regulatory challenges facing business operations in any country economic. Analysts, who will provide tactical and strategic intelligence monitoring on quot ; says Kinsey safety.

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