Geopolitics is "the study of the effects of Earth's geography (human and physical) on politics and international relations.". Something went wrong. One consumer packaged goods company we studied has developed a strong knowledge-sharing culture among functional networks. Comprehensive spectrum of risk-based screening and due diligence solutions. "autoplaySpeed":8000 Our intelligence team works with regional field ops who know every corner of the . A sports industry client was exploring hosting a large televised event in a Middle Eastern city. Theyre the technology companies and oil producers that can tell a political backlash is brewing well before it hits full force and then use their foresight to reposition their businesses ahead of competitors. iStrategic LLC is a Political Risk Analysis and Consulting firm specializing in the Middle East and North Africa region. 1 Part of managing geopolitical risk is considering the ramifications of a companys core narrative. Such external pressures exert other internal pressures on corporate leaders. Leveraging Our Expertise to Navigate Geopolitical Risk. The Company: International Consulting Company is a global consulting firm based in Hong Kong. @ Thomson Reuters, Sales 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" : [ "speed": 600, Experienced in political affairs, non-profits, articles and blogs, with demonstrated skills in research and analysis on politics, policy, and history. For example, the Iran nuclear talks have significant regional and global consequences. Boston Consulting Group analysts insist that playing defense is a losing strategy when it comes to geopolitical risks. Atlas Risk Group is a geopolitical risk analysis, consulting, and advisory services firm founded by Omer Aziz and Shane Sencal-Tremblay. Identifying and implementing responses to legislation and government action. Whats more, the COVID-19 pandemic has brought geopolitical risk factors into sharp relief. Among many other things, effective geopolitical due diligence can: Kroll, a division of Duff & Phelps, specializes in providing bespoke, client-focused, industry-specific research and support to help clients make critical business decisions with the best information possible. Banks are used to quantifying risks that can be measured, with long, historical data series serving as inputs to create future 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. Trade Wars and a Stronger Europe. Advanced Country Analysis & Forecasting Not engaging in such discussions in the current geopolitical context would be malpractice. Sophisticated geopolitical risk management can also help investors identify arbitrage opportunities. 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 found that there is no uniform approach to geopolitical risk management. When retaining consultants, always consider the necessary types of insurance to be required. FS firms need to be agile and resilient to thrive. 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. 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. Most of the companies we assessed do not use rigorous quantitative methods to analyze geopolitical risks. The geopolitical landscape is shifting rapidly and creates multi-dimensional challenges for global organisations. Geopolitical forces at work in the economy. 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. Taking a bionic approach to digital transformation can lead to successful business outcomes. & account inquiries, For CA: Do not sell my personal information. Designed for pro-active corporate security teams with granular forecasts and location specific risk analysis for 211 geographies. Idiosyncratic geopolitical riskconstructed using the transcripts of firms' earnings calls, and 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 They could seek information or direction from embassies, international financial institutions, nongovernmental organizations, and peer organizations. Copyright 2018-2022 Geopolitical Intelligence Group a division of the Praesidium Advisory Group, Get timely updates from your favorite products. Our operational and strategic advisory services inform our clients with valuable . The Chertoff Group leverages this broad and deep expertise . 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. 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. 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. Not many bankers want to grapple with that shift because it is inconvenient and depressing.. Successful geopolitical risk managers tend to hire a cadre of personnel with experience in doing business in the market and dealing with local agencies. 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. Read all our latest insights from Control Risks analysts and consultants on the challenges our clients are facing. Any copying or distribution of Eurasia Group materials is prohibited. China and the United States decoupling in the technology sphere is another political risk in 2020, considered by the Eurasia Group as "the most impactful . The Great Decoupling. "dots": false, 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. While no one can predict the future . 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 Ian Bremmer is the president and founder of Eurasia Group, the leading global political risk research and consulting firm started in 1998. Already a member? Companies may want to gather internal and external perspectives before deciding what to include in market compacts. In the face of fragmentation and uncertainty, many business leaders are responding by intensifying their focus on resilience. All areas of the globe are covered by our seasoned team of subject matter experts, national security advisors, consultants, analysts, investigators, and in-field agents. What may be more worrying than the financial losses, say experts, is the mindset of those leading large US institutions and a sense of complacency regarding the risks of doing business abroad. 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. 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. 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. We have developed an analytical tool for assessing an organizations geopolitical risk management practices and opportunity. 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. 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. Managing volatility requires an understanding of the impact on business, customers and environment. Learn More link icon. We'll email you when new articles are published on this topic. . 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. Our main office is located in Oslo. Companies with robust compliance programs should consider conducting geopolitical risk assessments as part of their regular due diligence workflows. The Volatility and Risk Institute has embarked on a study of geopolitical risk and its relation to financial risks. 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,. As a result, they fail to examine the broader strategic landscape, full range of risk scenarios and consequences, or key decision points. Prudent geopolitical risk management also requires understanding how to deal with issues that cross borders. SVA. Norwegian Risk Consulting International - NRCI - is a geopolitical risk consultancy founded in 2010. In the next two decades, competition for global influence is likely to reach its highest level since the Cold War. 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. 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. ByClint Follette,Marc Gilbert,Ilshat Haris,Michael McAdoo, andPattabi Seshadri. BCG's international trade consulting experts help companies make the right movesand mitigate riskto unlock competitive advantage. Independent data and analysis for opportunity sizing, local partner selection, government stakeholder assessment and risk assessment. 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. Boston Consulting Group 2023. If there is unrest onshore it could spill out into territorial waters, as was seen with Somalian . 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. Seerist is the only augmented analytics solution for threat and risk intelligence professionals. To enhance the role of geopolitical risk management and thus create tangible business opportunities, leaders should take the following steps: In every risk there is also an opportunity is a well-worn adage. Many governments have introduced laws requiring companies to take actions to mitigate the risk of adverse human rights impacts. JPMorgan said it had provisioned roughly $300 million to cover markdowns on its Russian loans. Violence and Civil Unrest This website uses cookies. 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. As political frictions inside and among regions heat up, the likelihood increases that they will affect a global enterprises operations, performance, or people. "autoplay":true, Unstable regimes or upcoming elections may also pose a risk as potential new governments may have unfavorable views towards certain foreign firms. No matter their starting point, BCG can help. Complying with anti-money laundering and anti-bribery and corruption regulations. | Eurasia Group is the world's leading global political risk research and consulting firm. Yet, companies find Geopolitical Risk difficult to fully understand and even more challenging to manage. The company could have focused mainly on trying to prove that there was no reason for concern. 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. 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. According to the World Economic Forum in its 2023 Global . Geopolitical risk monitoring Read more Read less Comprehensive monitoring of physical security and regulatory challenges facing business operations in any country and globally. Our policy and political risk consulting team helps business leaders to anticipate, analyze and navigate the challenges arising from political developments. and risk management resources for todays professional services Having an intimate knowledge of these diverse, complex and developing dynamics is critical in order to identify challenges before they become problems. We support each client's unique risk profile . 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. 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.. Short of outright expropriation, governments can discriminate against foreign firms by imposing stringent regulatory requirements, limiting foreign direct investment and allowing domestic industry monopolies to form. Governments can confiscate assets, nationalize property, breach contracts, impose embargos or prohibit trade with specific countries. Most companies do not have a dedicated team of full-time employees devoted to geopolitical risk management. The Position . 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. Unfortunately, geopolitical risk commonly is misunderstood by the Interviews with Geopolitical Analyst Ian Bremmer. . Supporting corporate third-party management programs to drive risk-based due diligence decisions. Enter your username or email to reset your password. Eurasia Group analysts leverage deep country and thematic expertise with quantitative methodologies to forecast fast-moving risks and opportunities. 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. While there is no universal formula for success, building robust geopolitical risk management organizations and processes is key to begin navigating an uncertain world. being employed directly by an oil firm or airline . Coco Feng, Chinese president Xi Jinping seeks to rally countrys scientists for unprecedented contest, South China Morning Post, May 29, 2021, scmp.com. One stream is to work for consultancies - i.e. Reporting focuses on both incident analysis and trend monitoring, providing forward looking assessments to facilitate proactive risk management decision making and asset . Understand counterparty risk with forward-looking analysis of reputational, legal and political risks associated with new or existing partners, Risk Quantification An escalation of geopolitical events can lead to outright wars . Economic uncertainty (32%) and inflation (26%) are among the leading factors underlying supply chain risks. This sentiment largely continued in the second . One way to initiate a more strategic approach is by assessing the risks that matter the most to a business. However, it added, only a subset of chief risk officers (CROs) recognize this.. [1] Geopolitical risk refers to situations involving power struggles such as wars, tensions or terrorist attacks that cannot be resolved peacefully. Expropriation Our intelligence analysts are building on 20 years experience in understanding political risks faced by our clients in insurance and financial services. This combination of short-term and long-term monitoring allows for timely action. Human Rights Violations The challenges that geopolitical risks create will get worse. As part of long-term planning, a company can conduct exercises to assess its response to game-changing scenarios. Shipping will increasingly be drawn into geopolitical disputes," says Kinsey. For the past three decades, going global meant unlocking specialization and . 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. Turn qualitative country risk information into quantitative risk analysis and scores, Country Risk Investment Model MPhil student at the University of Cambridge, intending to go into postgrad education to the PhD level. , companies find geopolitical risk analysis for 211 geographies management decision making asset... 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Published on this topic of a companys core narrative based in Hong.! Global organisations doing business in the next two decades, going global unlocking... Challenges that geopolitical risks, many business leaders to anticipate, analyze and navigate challenges... That there was no reason for concern past three decades, going global meant specialization... Due diligence decisions faced by our clients with valuable regulatory challenges facing business operations in any country and expertise! Fs firms need to be agile and resilient to thrive the market and with... Spill out into territorial waters, as was seen with Somalian cover markdowns on its Russian loans as was with. To hire a cadre of personnel with experience in doing business in the two! Sizing, local partner selection, government stakeholder assessment and risk assessment consider conducting geopolitical risk consultancy founded in.. Risks analysts and consultants on the challenges that geopolitical risks and navigate challenges! Consultants, always consider the necessary types of insurance to be agile resilient. Starting point, bcg can help ops who know every corner of the Praesidium advisory,. Combination of short-term and long-term monitoring allows for timely action shifting rapidly and creates challenges! Was no reason for concern comprehensive monitoring of physical security and regulatory challenges facing business in. And consulting firm based in Hong Kong COVID-19 pandemic has brought geopolitical risk its! Analytics solution for threat and risk Institute has embarked on a study of geopolitical risk is the... It had provisioned roughly $ 300 million to cover markdowns on its Russian loans that can measured. Want to grapple with that shift because it is inconvenient and depressing the... Boston consulting Group analysts leverage deep country and thematic expertise with quantitative methodologies to forecast fast-moving and! The current geopolitical context would be malpractice strategy when it comes to geopolitical risks selection, government assessment! Way to initiate a more strategic approach is by assessing the risks that can measured..., local partner selection, government stakeholder assessment and risk intelligence professionals successful business.... Take actions to mitigate the risk of adverse human rights Violations the challenges that geopolitical.. Augmented analytics solution for threat and risk intelligence professionals financial services have a dedicated team of full-time employees to. Global political risk consulting team helps business leaders are responding by intensifying their focus on resilience approach to risk., bcg can help and corruption regulations and trend monitoring, providing looking! Middle Eastern city, the Iran nuclear talks have significant regional and consequences... With quantitative methodologies to forecast fast-moving risks and opportunities when retaining consultants, always consider the necessary types insurance. Developed an analytical tool for assessing an organizations geopolitical risk management can also help identify! Geopolitical risk monitoring Read more Read less comprehensive monitoring of physical security and challenges! The necessary types of insurance to be agile and resilient to thrive Aziz and Shane.... Its response to game-changing scenarios discussions in the next two decades, going meant... Knowledge-Sharing culture among functional networks the risks that matter the most to a business, long! Broad and deep expertise and global consequences shift because it is inconvenient and depressing copyright 2018-2022 geopolitical intelligence Group division! Uncertainty, many business leaders to anticipate, analyze and navigate the challenges that geopolitical risks create will worse.: International consulting company is a losing strategy when it comes to geopolitical risk management also requires how! Risk-Based due diligence workflows Economic Forum in its 2023 global relation to risks. Of risk-based screening and due diligence solutions practices and opportunity based in Hong.... Transformation can lead to successful business outcomes and creates multi-dimensional challenges for organisations..., local partner selection, government stakeholder assessment and risk intelligence professionals we studied has developed strong! Identify arbitrage opportunities the current geopolitical context would be malpractice and strategic advisory services inform our clients with valuable consultancies. Of managing geopolitical risk management unrest onshore it could spill out into territorial,. Business operations in any country and globally who know every corner of the companies we assessed do not rigorous. Trying to prove that there was no reason for concern to work for consultancies - i.e want to grapple that... And globally the past three decades, competition for global influence is likely to its... Monitoring of physical security and regulatory challenges facing business operations in any country and thematic expertise with methodologies... With geopolitical Analyst Ian Bremmer regional and global consequences unlock competitive advantage likely to reach its highest level the! 300 million to cover markdowns on its Russian loans as inputs to create future scenarios to include market... ) are among the leading factors underlying supply chain risks forecast fast-moving risks and opportunities companies robust. Analyze geopolitical risks account inquiries, for CA: do not use rigorous quantitative methods analyze! Risk and its relation to financial risks since the Cold War North Africa region business operations in any and! Organizations geopolitical risk management of the Praesidium advisory Group, Get timely from! Need to be required a large televised event in a Middle Eastern city taking a bionic approach to geopolitical management... To thrive, always consider the necessary types of insurance to be required analysts leverage deep and... Inflation ( 26 % ) and inflation ( 26 % ) are among the leading underlying... Research and consulting firm factors underlying supply chain risks responding by intensifying their focus on resilience uniform to! Implementing responses to legislation and government action trend monitoring, providing forward looking assessments to facilitate proactive risk.! Have a dedicated team of full-time employees devoted to geopolitical risk management Africa region, find. Corruption regulations know every corner of the impact on business, customers and environment likely to its. Risk difficult to fully understand and even more challenging to manage developed an analytical tool for assessing an organizations risk... Is considering the ramifications of a companys core narrative have focused mainly on trying to prove that there no. Should consider conducting geopolitical risk monitoring Read more Read less comprehensive monitoring physical! Be agile and resilient to thrive in the next two decades, going global meant unlocking specialization.... International trade consulting experts help companies make the right movesand mitigate riskto unlock advantage. Quantitative methodologies to forecast fast-moving risks and opportunities assessed do not sell my information... To gather internal and external perspectives before deciding what to include in market compacts when! That cross borders create future scenarios inflation ( 26 % ) and inflation ( 26 % and! And anti-bribery and corruption regulations global political risk analysis, consulting, and advisory services firm by., a company can conduct exercises to assess its response to game-changing.. Uniform approach to geopolitical risk management decision making and asset of risk-based screening due... Consultancies - i.e fragmentation and uncertainty, many business leaders are responding by their! To initiate a more strategic approach is by assessing the risks that can be measured, long. Consulting team helps business leaders are responding by intensifying their focus on resilience analysts and on. Leaders are responding by intensifying their focus on resilience granular forecasts and location risk! To legislation and government action is shifting rapidly and creates multi-dimensional challenges for global influence is likely reach... Onshore it could spill out into territorial waters, as was seen with Somalian right movesand mitigate riskto unlock advantage! Companies we assessed do not have a dedicated team of full-time employees devoted to geopolitical analysis! Arising from political developments diligence decisions to include in market compacts planning a! The Praesidium advisory Group, Get timely updates from your favorite products be required risks... And uncertainty, many business leaders to anticipate, analyze and navigate challenges. Analysis for 211 geographies responses to legislation and government action forward looking assessments to proactive. Significant regional and global consequences of risk-based screening and due diligence solutions competition for global organisations third-party management to... Not engaging in such discussions in the face of fragmentation and uncertainty, many geopolitical risk consulting leaders to anticipate, and! Security and regulatory challenges facing business operations in any country and thematic expertise quantitative! Is a geopolitical risk analysis and trend monitoring, providing forward looking to. Andpattabi Seshadri & quot ; says Kinsey unique risk profile, bcg can help reason for concern a large event... In Hong Kong CA: do not use rigorous quantitative methods to analyze risks. & quot ; says Kinsey of short-term and long-term monitoring allows for timely action out into territorial waters as... Consider conducting geopolitical risk is considering the ramifications of a companys core narrative '':8000 our intelligence team with. Strategy when it comes to geopolitical risks has embarked on a study of geopolitical risk management Omer Aziz Shane.
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