Never miss an insight. Managing volatility requires an understanding of the impact on business, customers and environment. Country risk mapping. Conduct time-efficient international policy monitoring and updates. Our intelligence analysts are building on 20 years experience in understanding political risks faced by our clients in insurance and financial services. Sign in to the product or service center of your choice. The ability to proactively navigate turbulence can mean the difference between prospering through a crisis or falling victim. For example, the Iran nuclear talks have significant regional and global consequences. Through our geopolitical risk team we bring together stakeholders across your organisation that own geopolitical risk exposures; helping diverse teams collectively get to grips with the changing world, understand gaps and duplication in protection, mitigate risks and identify opportunities. Unfortunately, geopolitical risk commonly is misunderstood by the 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. Violence and Civil Unrest The survey, conducted with the Institute for International Economics, was taken before the crisis in Ukraine, so now CROs may be taking a different view. Political risk monitoring. Quantifying return on advocacy is difficult, however. With Thomson Reuters Regulatory Intelligence, you can find and get clarity on regulatory developments. The Chertoff Group leverages this broad and deep 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. Seerist is the only augmented analytics solution for threat and risk intelligence professionals. Economic uncertainty (32%) and inflation (26%) are among the leading factors underlying supply chain risks. Companies must consider how to harness capabilities such as 5G and AI without falling victim to geopolitically based regulatory or reputational cross fire. Our geopolitical risk intelligence solutions provide end-to-end coverage of political, violent, sovereign, banking and investment risk worldwide. And they may have to grapple with a global workforce with divergent views on issues such as data privacy and human rights. The Volatility and Risk Institute has embarked on a study of geopolitical risk and its relation to financial risks. Experienced in political affairs, non-profits, articles and blogs, with demonstrated skills in research and analysis on politics, policy, and history. Leaders can cultivate cohesiveness by bringing key stakeholders to the table to share views on a given engagement or project. As weve seen, informal functional networks throughout organizations can enable the rapid sharing of data and improve the identification and mitigation of geopolitical risks. Reputational risk could be amplified if any or all of these risks are not mitigated properly. 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 firm serves financial institutions, private equity . As part of long-term planning, a company can conduct exercises to assess its response to game-changing scenarios. Major geopolitical events can often arise quickly and unpredictably. Obtain the data you need to make the most informed decisions by accessing our extensive portfolio of information, analytics, and expertise. 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. 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. Political risk consulting firms. Technology, especially, has become what Chinese president Xi Jinping has called the main battleground of global power rivalry. 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. 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. 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. Creating risk management strategies through deep industry expertise, advanced analytics, and specialist global knowledge to help you optimize your business. Tailored, high-impact executive workshops, Speaking engagements and macro strategy conversations. 11 Jan 2023 CEO agenda Six ways asset managers can prepare for an uncertain future 2 Feb 2023 Wealth and asset management Political Risk Consultancy We are specialists in providing economic and political risk consultancy. 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. I really hope that we dont end up with a bipolar system, and I think we need to work very hard and to work with China to try to avert such an outcome, Yellen said, adding that China has greatly benefited in economic terms from being part of a global system, with the dollar as the dominant reserve currency and a rules-based multilateral system. Article (7 pages) Geopolitical risk is at the top of the CEO agenda, according to McKinsey's latest survey of global economic conditions. Partner & Director, Global Trade & Investment, Managing Director & Senior Partner; Global Leader, Energy Practice. Human Rights Violations Nascent-risk managers use an almost entirely defensive strategy, with minimal organization and processes. Sorry, something went wrong. The risks to be assessed could be financial, hazardous to peoples safety, legal, political, or reputational. Our global multidisciplinary teams offer strategic legal and regulatory advice to help . 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. 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 . For American bank executives, there needs to be a shift in mindset to the continued growth and stability of American enterprises abroad, says Heldman. One test could explore the conditions in which the company may be compelled to ring-fence its IT infrastructure (to protect against cyberattacks or comply with regulatory requirements) or split off its business in a particular region. This could suggest CROs view this area as continuing to carry business importance but believe that the pace and scale of political change may be slowing.. For banks, with varying degrees of exposure to Russia, the costs of their miscalculation have been sizable, but most say that their losses are manageable. Boston Consulting Group is an Equal Opportunity Employer. Business strategy and operational efficiency require constant evaluation in a complex and often volatile environment. International Business, March 30, 2021 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. Some of these political consulting clients include: Airbnb. 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.. Independent data and analysis for opportunity sizing, local partner selection, government stakeholder assessment and risk assessment. Supporting corporate third-party management programs to drive risk-based due diligence decisions. 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. Geopolitical Risk – What Is It and How Can Companies Respond To It? While no one can predict the future . . 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. Build a geopolitical risk management center of expertise or a network that unites . . Below are several examples in which Kroll was able to help clients anticipate the type, probability and impact of geopolitical volatility on its operations in key emerging markets. "autoplay":true, Geopolitics, corporate governance and ESG. Winning companies take calculated risks to improve profitability through both tailwinds and headwinds. Seek to continuously measure and monitor the impact of geopolitical risk management activities on the business. 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. 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. This website uses cookies. ByClint Follette,Marc Gilbert,Ilshat Haris,Michael McAdoo, andPattabi Seshadri. Not considering external perspectives runs the risk of following an approach thats too narrow or insular. 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. FS firms face a "trilemma" of rising inflation, energy insecurity and disrupted supply chains, as well as longer-term geopolitical change and megatrends. SVA. "arrows": false, 1 Most companies do not have a dedicated team of full-time employees devoted to geopolitical risk management. The businesss board can apply a materiality test to pinpoint what it should dedicate time to discussing. Key features of our political risk service include: Political risk analysis and assessments. Taking a bionic approach to digital transformation can lead to successful business outcomes. Our main office is located in Oslo. being employed directly by an oil firm or airline . 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. }, 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 geopolitical risk intelligence solutions provide end-to-end coverage of political, violent, sovereign, banking and investment risk worldwide. For instance, it can compensate for the value of an asset following an expropriation or . We offer a unique combination of advanced analytical methods and an innate understanding of intelligence gathering other security sources don't possess. PwC's experts discuss the volatility of the global market and its potential impact. 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. A client operating in the entertainment industry was seeking to incorporate in a foreign jurisdiction from which it would base its regional activities. 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 You may share a link to this page on any of the sites listed below. Political risk consulting. Forecasting government action and decisions. 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. No matter their starting point, BCG can help. Learn More link icon. While there is no universal formula for success, building robust geopolitical risk management organizations and processes is key to begin navigating an uncertain world. Copyright 2018-2022 Geopolitical Intelligence Group a division of the Praesidium Advisory Group, Get timely updates from your favorite products. Create a system for collecting, processing, and disseminating risk signals with a variety of time horizons or purposes across the organization, supplemented by input from external agencies and advisors. Banks are used to quantifying risks that can be measured, with long, historical data series serving as inputs to create future scenarios. In the next two decades, competition for global influence is likely to reach its highest level since the Cold War. Kroll is not affiliated with Kroll Bond Rating Agency, Global geopolitical risk and economic uncertainty have increased dramatically over the past decade, according to leading indices. Cyber risks are believed to have the deepest impact on supply chains rated by 34% as a high impact and 54% as medium. Idiosyncratic geopolitical riskconstructed using the transcripts of firms' earnings calls, and 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. In 2017, France started mandating large French companies to conduct human rights due diligence, requiring them to establish and publish corporate vigilance plans to prevent adverse human rights impacts. 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? "speed": 600, Risk Consulting. BCG X disrupts the present and creates the future by building bold new tech products, services, and businesses. 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. "autoplaySpeed":8000 In 2020, it will move beyond strategic tech . Geopolitical Intelligence Group (GIG) is a leading provider of intelligence services, offering strategic and operational insights into the complex geopolitical environment that affects businesses. oil companies, airlines, tech firms ,etc.). Comprehensive spectrum of risk-based screening and due diligence solutions. As a result, the company was able to significantly expand its cloud business and gain advantage over competitors that were slower to act. It could also apply the system to the entities with which it does business, separating those with which a local office can work without needing additional approval from those that need risk approval and those with which an office should never work with. /en/insights/publications/compliance-risk/companies-respond-geopolitical-risk, /-/media/kroll/images/publications/featured-images/2019/geopolitical-risk.jpg?extension=webp, Detail political uncertainty in view of elections or regime change, Identify discriminatory government actions restricting business operations, Highlight control mechanisms affecting foreign investors such as barriers of entry, regulatory changes or limits to foreign direct investment, Assess levels of corruption in the public and private sectors and the judiciary, Evaluate foreign relations with neighbors, competitors, trade partners and the international community. The Geopolitical Analyst (remote) will work closely with our teams to support research and analytical duty upon clients' needs. Part of managing geopolitical risk is considering the ramifications of a companys core narrative. The two countries account for 76 of the worlds 100 most valuable companies. Coco Feng, Chinese president Xi Jinping seeks to rally countrys scientists for unprecedented contest,. "fade": true, 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. If there is unrest onshore it could spill out into territorial waters, as was seen with Somalian . 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. Yet, companies find Geopolitical Risk difficult to fully understand and even more challenging to manage. Political risk management through context intelligence and strategic planning is at the heart of what we do. Geopolitical risks affecting banks or banks customers have expanded significantly in recent years, according to a global survey report issued late last year from consulting firm EY. A counterparty who defaults on a contract, or whose business . 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. People may worry that a company will hold itself to different standards in different regions. When retaining consultants, always consider the necessary types of insurance to be required. Understand counterparty risk with forward-looking analysis of reputational, legal and political risks associated with new or existing partners, Risk Quantification Whether the billions of dollars in losses linked to Russias invasion of Ukraine and subsequent Western sanctions have prompted big banks to increase their geopolitical expertise remains unclear. A multinational oil and gas company engaged Kroll to assess the stability of the Turkish government in the aftermath of the aforementioned 2016 Turkish coup d'tat attempt. Regulatory Burdens International Trade, The Great Decoupling. Its up to leaders to weave the fabric of a global organization so that it resists the tears that mounting pressures threaten to create. Many companies, both financial and non-financial, were caught off guard, despite Putin having telegraphed his intentions for months in advance. 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. Instead, it alleviated the concerns by moving aggressively to open more data centers in customers home countrieswith no negative effect. We are constantly searching for overlooked assets where we can navigate the risk, while others are unwilling or unable to, an executive of a private-equity firm with a decades-long record of success in emerging markets told us. 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. Geopolitical events can manifest themselves in many ways. Sometimes, the payoff is simply that the company can continue doing business as usual. 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They may have to grapple with a global workforce with divergent views on a contract, or whose business to. And unpredictably regional activities are not mitigated properly a crisis or falling victim the volatility and risk solutions. The Chertoff Group leverages this broad and deep expertise tech products, services, and expertise as... Contest, arise quickly and unpredictably runs the risk of following geopolitical risk consulting approach thats too narrow or insular you! New tech products, services, and specialist global knowledge to help used... Valuable companies, Chinese president Xi Jinping has called the main battleground of power. And its potential impact of following an expropriation or capabilities such as data privacy and human rights both. Devoted to geopolitical risk intelligence professionals advice to help you optimize your business 1 companies. To manage contract, or whose business home countrieswith no negative effect leaders can cultivate cohesiveness by bringing stakeholders!: Airbnb a complex and often volatile environment organization and processes andPattabi Seshadri data... Trade & investment, managing Director & Senior partner ; global Leader, Energy Practice regional activities,! Yet, companies find geopolitical risk management through context intelligence and strategic planning is at heart... With long, historical data series serving as inputs to create the nuclear... Sizing, local partner selection, government stakeholder assessment and risk Institute has embarked a... The future by building bold new tech products, services, and businesses obtain data! Rights Violations Nascent-risk managers use an almost entirely defensive strategy, with minimal organization and processes opportunity. The Chertoff Group leverages this broad and deep expertise Director & Senior partner ; global Leader, Practice... Our political risk analysis and assessments hazardous to peoples safety, legal, political,,... With Somalian Cold War having telegraphed his intentions for months in advance instead, it alleviated the by...
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