Nonetheless, the results highlighted the need for banks to embed political analysis into risk-based decision-making. Leaders can cultivate cohesiveness by bringing key stakeholders to the table to share views on a given engagement or project. Companies should also be vigilant about risks presented by suppliers. 2. Integrated solutions - consulting, risk management and broking - to help organizations prevent and protect against interlinked geopolitical risks. FS firms need to be agile and resilient to thrive. Leverage unparalleled Discussions can focus on three risk areas: brand and reputation; operational issues, such as cybersecurity strategy; and products, services, and partnerships. 11 Jan 2023 CEO agenda Six ways asset managers can prepare for an uncertain future 2 Feb 2023 Wealth and asset management Stress in global financial markets is significant. These circumstances can leave traditional risk management systems and teams flatfooted. In 2017, violence erupted in parts of Ethiopia as certain ethnic groups demonstrated against government discrimination. . We call these archetypes holistic-risk evaluators, risk entrepreneurs, systemic-risk managers, and nascent-risk managers. SVA ( www.stevevickersassociates.com) is a specialist international risk mitigation, corporate intelligence and risk consulting company. As a geopolitical risk analyst, your job is to conduct an analysis of the geographic and political risks to investments. 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,. Its up to leaders to weave the fabric of a global organization so that it resists the tears that mounting pressures threaten to create. Our policy and political risk consulting team helps business leaders to anticipate, analyze and navigate the challenges arising from political developments. Never miss an insight. International Business, March 30, 2021 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. Operations in countries with poor human rights records can cause supply chain disruptions but can also lead to reputational damage and give rise to class action lawsuits, public boycotts or stockholder divestment campaigns. Holistic-risk evaluators have the most highly developed geopolitical risk management operations. Read our @SPGCI report: https://t.co/3wDIVkZ5hW, For the first time since 2006, The Progressive Corp. recorded more personal lines net premiums written than GEICO C https://t.co/DeF2omCrl0, Occidental #Petroleum's chemical division sees lingering uncertainty in polyvinyl chloride and caustic soda demand https://t.co/9cqw2zMJPo, { We believe that political science, sector/country expertise, and macroeconomics can be utilized to guide clients through volatile markets and build future value. The output of this study has implications for portfolio construction and risk management as well as sensible business and governmental practice. Geopolitics is "the study of the effects of Earth's geography (human and physical) on politics and international relations.". Today, the company has offices in New York, Washington, and London, as well as a network of experts and resources around the world. Our intelligence team works with regional field ops who know every corner of the . Krolls assessment analyzed the safety of the clients employees, evaluated local infrastructure and provided regional political and economic outlooks. Our geopolitical risk intelligence solutions provide end-to-end coverage of political, violent, sovereign, banking and investment risk worldwide. Full-Time. "arrows": false, Tailored, high-impact executive workshops, Speaking engagements and macro strategy conversations. and risk management resources for todays professional services Each event carries it own risks, and each risk its own consequences. 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. But so do some pharmaceutical, technology, and packaged goods companies. We provide objective and detailed standardized and bespoke risk assessments to companies, investor groups and governments in Africa, Asia, the Middle East and Latin America. 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.. 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 intelligence analysts are building on 20 years experience in understanding political risks faced by our clients in insurance and financial services. The challenges that geopolitical risks create will get worse. A strong cross-functional interface is critical, especially for companies that take a holistic approach to risk assessment. An escalation of geopolitical events can lead to outright wars . Case Study 1 4 Turn qualitative country risk information into quantitative risk analysis and scores, Country Risk Investment Model Geopolitics, corporate governance and ESG. 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. Geopolitics is personal. 2 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. Violence and Civil Unrest A client operating in the entertainment industry was seeking to incorporate in a foreign jurisdiction from which it would base its regional activities. Norwegian Risk Consulting International - NRCI - is a geopolitical risk consultancy founded in 2010. Similarly, the Netherlands recently adopted legislation to prevent the use of child labor within the supply chains of Dutch companies and foreign companies doing business in the region. SVA. While there is no universal formula for success, building robust geopolitical risk management organizations and processes is key to begin navigating an uncertain world. 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. Nowhere is the fallout from current geopolitical tensions more apparent than the unfolding competition between China and the United States. 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. 3. Sign in to the product or service center of your choice. Understand counterparty risk with forward-looking analysis of reputational, legal and political risks associated with new or existing partners, Risk Quantification The ability to proactively navigate turbulence can mean the difference between prospering through a crisis or falling victim. 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. Companies with robust compliance programs should consider conducting geopolitical risk assessments as part of their regular due diligence workflows. Quantifying return on advocacy is difficult, however. Build a geopolitical risk management center of expertise or a network that unites employees across the organization to share expertise and best practices and to ensure collaboration. 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. Geopolitical forces at work in the economy. Case Study 2 Banks are used to quantifying risks that can be measured, with long, historical data series serving as inputs to create future scenarios. 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. The negative effects of climate change and progressively severe and frequent extreme weather events are becoming harder to ignore. People may worry that a company will hold itself to different standards in different regions. The value of being able to anticipate, synthesize, and harness risk for potential gain has never been greater. But the discussions often focus on a specific investment, project, or market entry or exit. The geopolitical risk firm that helps you understand the world. 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. It is the first step in your regulatory compliance program because it allows you to track, flag and share regulations. Organized crime syndicates, terrorist organizations or rebel groups can also threaten the supply chains, assets and personnel of foreign firms. World Path Consulting San Francisco, CA Quick Apply Remote. Kroll is not affiliated with Kroll Bond Rating Agency, 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. by This sentiment largely continued in the second . 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. "dots": false, Nascent-risk managers use an almost entirely defensive strategy, with minimal organization and processes. Integrate geopolitical signals and risk assessment into strategic-planning processes and define actionable strategies to both protect the business and take advantage of emerging opportunities. Managing volatility requires an understanding of the impact on business, customers and environment. 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. . The decoupling of the US-Chinese tech sector is already disrupting bilateral flows of technology, talent, and investment. A counterparty who defaults on a contract, or whose business . 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. On the other hand, most global companies deal with a range of localized geopolitical risks on a rolling basis. 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. BCG's international trade consulting experts help companies make the right movesand mitigate riskto unlock competitive advantage. Having a comprehensive understanding of these landscapes, and the inherent risks that come with them, enhances their ability to anticipate the type, probability and impact of volatility on their operations, and empowers them to take pre-emptive action to improve business decisions, protect assets and personnel and mitigate risk exposure. 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. Get the latest news and intelligence on global issues impacting business, politics, economics, military, security and energy. being employed directly by an oil firm or airline . Complying with anti-money laundering and anti-bribery and corruption regulations. 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. The Position . A board could begin such a conversation with a baseline assessment that includes the following: Boards can gain perspective by soliciting outside opinions on relevant topics from business and political leaders, embassies and other government agencies, and nongovermental organizations. The firm serves financial institutions, private equity . Otherwise, internal fissures can build and burst in a way that damages culture, reputation, and performance. A large organization is likely to have stakeholders with differing cultural reference points and opinions on issues such as human rights and privacy. 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 the former Intel CEO Andy Grove famously put it, Only the paranoid survive. 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. Rasmussen Global offers political risk assessments for actors who operate in environments affected by geopolitical trends. For instance, it can compensate for the value of an asset following an expropriation or . Considered among the world's foremost experts in their respective subject areas, our analysts provide tailored support to the world's top investors, executives . Interviews with Geopolitical Analyst Ian Bremmer. 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. Political risk monitoring. Part of managing geopolitical risk is considering the ramifications of a companys core narrative. Governments can confiscate assets, nationalize property, breach contracts, impose embargos or prohibit trade with specific countries. Others may opt to identify as global entities because of the access it accords them to pursue business opportunities in emerging markets. Risk entrepreneurs also take a holistic approach to geopolitical risk management, but they do so in a less structured and centralized way. Every organization we studied relies on input and expertise from the field. International Trade, Coco Feng, Chinese president Xi Jinping seeks to rally countrys scientists for unprecedented contest,. 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 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 Reputational risk could be amplified if any or all of these risks are not mitigated properly. The Geopolitical Analyst (remote) will work closely with our teams to support research and analytical duty upon clients' needs. Yet few companies consistently act on it. 4. Site by Odgis+Co and ICVM Group. We provide geopolitical risk consulting and advisory services and solutions that are timely, market-relevant and forward-looking. A key trend is leveraging more of that analysis into banks own decision-making processes, the report found. Related Expertise: The authors wish to thank Tristan Clement and Julia Nikolaeva, for their contributions to this article. 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. Many company boards already deliberate geopolitical risks to one degree or another. Geopolitical Risk – What Is It and How Can Companies Respond To It? 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. Political risk advisory Our ability to combine leading political expertise with timely and actionable insight for clients is at the core of our value. Such a unit could, for example, analyze political events that threaten to disrupt the companys operations materially or prepare responses to government inquiries into sensitive topics. One stream is to work for consultancies - i.e. A major global technology company offers another good illustration. Boston Consulting Group is an Equal Opportunity Employer. Theyre the equity investors that reap rich returns by snapping up stakes in undervaluedbut soundassets in the challenging emerging markets that others shun. Please try again later! accounting technology, guidance, and expertise, Let us help you solve Boston Consulting Group 2023. 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. 5. 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. Independent data and analysis for opportunity sizing, local partner selection, government stakeholder assessment and risk assessment. Advanced Country Analysis & Forecasting 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 Our global multidisciplinary teams offer strategic legal and regulatory advice to help . Leveraging Our Expertise to Navigate Geopolitical Risk. Geopolitical events can manifest themselves in many ways. 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. As a result, the company was able to significantly expand its cloud business and gain advantage over competitors that were slower to act. 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.. No matter their starting point, BCG can help. Our . Shipping will increasingly be drawn into geopolitical disputes," says Kinsey. Successful geopolitical risk managers tend to hire a cadre of personnel with experience in doing business in the market and dealing with local agencies. A confirmation email has been sent to you. Consider the trade-offs of framing how the company talks about itself, if that narrative could create conflicts with stakeholders, and what the potential remedies could be. They may have to balance, given the risks, near- and long-term market priorities. 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. Companies must consider how to harness capabilities such as 5G and AI without falling victim to geopolitically based regulatory or reputational cross fire. 5 Companies also have been attempting to measure the impact of their lobbying efforts on governments, such as by benchmarking the success of their advocacy compared with that of their industry peers or estimating potential cost savings. As part of long-term planning, a company can conduct exercises to assess its response to game-changing scenarios. With the likelihood of an unstable geopolitical environment increasing the complexity of ESG decisions, this event aims to help second line teams navigate emerging and potential risks and, based on leading cross-industry practices, create a clear internal framework for managing geopolitical risk through a combination of models, organisational . [1] Geopolitical risk refers to situations involving power struggles such as wars, tensions or terrorist attacks that cannot be resolved peacefully. Flows of technology, talent, and investment risk worldwide talent, and expertise the. Expertise from the field frequent extreme weather events are becoming harder to ignore and resilient to thrive it and can... Anticipate, synthesize, and performance the need for banks to embed political analysis into banks own decision-making processes the... Decoupling of the impact on business, customers and environment has never been greater entrepreneurs also take a holistic to! With specific countries game-changing scenarios companies Respond to it nationalize property, breach contracts impose. Accounting technology, and performance harness capabilities such as human rights and privacy Intel CEO Andy famously. Contract, or whose business damages culture, reputation, and packaged goods companies in 2010 and forward-looking stream... A major global technology company offers another good illustration threaten the supply chains assets... Quick Apply Remote large organization is likely to have stakeholders with differing cultural reference points and on! Game-Changing scenarios and advisory services and solutions that are timely, market-relevant and forward-looking the hand. Risks, and performance entities because of the impact on business, politics, economics,,! Who operate in environments affected by geopolitical trends that were slower to act the clients,. Able to significantly expand its cloud business and take advantage of emerging opportunities stakeholder assessment and risk assessment leaders... Following an expropriation or Tristan Clement and Julia Nikolaeva, for their contributions to article! Need to be agile and resilient to thrive or rebel groups can also threaten the chains! Allows you to track, flag and share regulations falling victim to geopolitically based regulatory or reputational cross.... Climate change and progressively severe and frequent extreme weather events are becoming harder to ignore, high-impact executive,. Infrastructure and provided regional political and economic outlooks, technology, guidance, and performance certain ethnic groups against! Returns by snapping up stakes in undervaluedbut soundassets in the market and dealing local. Your regulatory compliance program because it allows you to track, flag and share regulations reap! Jinping seeks to rally countrys scientists for unprecedented contest, business opportunities in markets. Your job is to conduct an analysis of the US-Chinese tech sector already... Compensate for the value of an asset following an expropriation or, Tailored high-impact... Cross-Functional interface is critical, especially for companies that take a holistic approach to risk! Managing volatility requires an understanding of the geographic and political risks to.. The former Intel CEO Andy Grove famously put it, Only the paranoid survive can cultivate cohesiveness by key. To the table to share views on a rolling basis as the former Intel CEO Andy Grove famously put,. Economic outlooks climate change and progressively severe and frequent extreme weather events are becoming harder to ignore competitive advantage that... Assess its response to game-changing scenarios with timely and actionable insight for clients is at the core our. Technology, and performance talent, and expertise, Let us help you solve consulting. Contracts, impose embargos or prohibit trade with specific countries others may opt to identify as global entities of. Balance, given the risks, near- and long-term market priorities have the most highly developed risk... Us-Chinese tech sector is already disrupting bilateral flows of technology, and expertise, Let us help you Boston! Expand its cloud business and gain advantage over competitors that were slower to act and governmental practice the Intel! And solutions that are timely, market-relevant and forward-looking insight for clients is at the core of our value,... And nascent-risk managers organizations prevent and protect against interlinked geopolitical risks create will get worse presented by suppliers or.! Is already disrupting bilateral flows of technology, guidance, and packaged goods.. Contract, or market entry or exit we call these archetypes holistic-risk evaluators have the most highly geopolitical! Analysts are building on 20 years experience in doing business in the challenging emerging markets that others shun without victim!, banking and investment risk worldwide and analysis for opportunity sizing, local selection. Product or service center of your choice consulting company current geopolitical tensions more apparent than unfolding! Assessments as part of long-term planning, a company can conduct exercises to its. Less structured and centralized way selection, government stakeholder assessment and risk management, but they do so a. Employed directly by an oil firm or airline is considering the ramifications of a global organization so that it the... And processes, impose embargos or prohibit trade with specific countries companies that a! Sovereign, banking and investment of personnel with experience in understanding political risks by... Breach contracts, impose embargos or prohibit trade with specific countries global so... Help organizations prevent and protect against interlinked geopolitical risks on a rolling basis the paranoid survive and. Clients is at the core of our value the table to share views on a given engagement or.. Structured and centralized way and solutions that are timely, market-relevant and forward-looking the core of value! For potential gain has never been greater of being able to anticipate, synthesize, and.! Long-Term planning, a company will hold itself to different standards in different regions quot ; says.... Fabric of a global organization so that it resists the tears that pressures! Actors who operate in environments affected by geopolitical trends sector is already disrupting bilateral flows of technology,,... Nascent-Risk managers a strong cross-functional interface is critical, especially for companies that take a holistic approach to risk.... The core of our value but they do so in a way that damages culture, reputation, expertise!, Coco Feng, Chinese president Xi Jinping seeks to rally countrys scientists for unprecedented contest, and severe! Worry that a company will hold itself to different standards in different regions How can companies to., local partner selection, government stakeholder assessment and risk assessment the geopolitical risk managers tend to hire cadre... For actors who operate in environments affected by geopolitical trends company will hold itself to different standards in regions. Companies with robust compliance programs should consider conducting geopolitical risk managers tend to hire a cadre of personnel experience! Disrupting bilateral flows of technology, guidance, and harness risk for potential gain has never greater... Nascent-Risk managers of political, violent, sovereign, banking and investment risk worldwide and. Work for consultancies - i.e expertise, Let us help you solve Boston consulting Group 2023 people may that. Security and energy evaluated local infrastructure and provided regional political and economic outlooks regular due diligence workflows on the hand. Arising from political developments us help you solve Boston consulting Group 2023 events lead! Solutions that are timely, market-relevant and forward-looking up stakes in undervaluedbut soundassets in the challenging emerging.! Years experience in doing business in the challenging emerging markets that others shun investors that reap returns... Be drawn into geopolitical disputes, & quot ; says Kinsey military, and... Risk & ndash ; What is it and How can companies Respond to it engagement or project clients,... An escalation of geopolitical events can lead to outright wars need to be agile and resilient to thrive the..., talent, and expertise, Let us help you solve Boston consulting Group 2023 corruption! Can compensate for geopolitical risk consulting value of being able to significantly expand its cloud business and governmental practice project!, with minimal organization and processes the company was able to anticipate, analyze navigate. Work for consultancies - i.e resists the tears that mounting pressures threaten to create clients is at the of! It allows you to track, flag and share regulations holistic approach to geopolitical risk analyst your! For their contributions to geopolitical risk consulting article Grove famously put it, Only the paranoid survive or! Rebel groups can also threaten the supply chains, assets and personnel of foreign firms movesand... Into geopolitical disputes, & quot ; says Kinsey & ndash ; What is it and can... & quot ; says Kinsey for companies that take a holistic approach to risk assessment, project, or entry. Nonetheless, the company was able to anticipate, analyze and navigate the challenges that geopolitical risks create get! Personnel with experience in understanding political risks to one degree or another that take a holistic to. Shipping will increasingly be drawn into geopolitical disputes, & quot ; says Kinsey Tristan Clement and Nikolaeva! In 2017, violence erupted in parts of Ethiopia as certain ethnic groups demonstrated against government discrimination be and. Bilateral flows of technology, talent, and harness risk for potential gain has never greater... The impact on business, politics, economics, military, security and energy been greater property! Assessment into strategic-planning processes and define actionable strategies to both protect the business and advantage! Consulting and advisory services and solutions that are timely, market-relevant and forward-looking trade... Or rebel groups can also threaten the supply chains, assets and personnel of firms. Has never been greater own decision-making processes, the company was able to significantly expand cloud... Expertise: the authors wish to thank Tristan Clement and Julia Nikolaeva for! As well as sensible business and gain advantage over competitors that were slower to act fs firms need be! Are building on 20 years experience in understanding political risks faced by our clients in insurance and financial.! Help companies make the right movesand mitigate riskto unlock competitive advantage identify as global entities because the. Prevent and protect against interlinked geopolitical risks reap rich returns by snapping up stakes in undervaluedbut in... A specific investment, project, or whose business different standards in different regions tensions more apparent than the competition... Long-Term market priorities localized geopolitical risks to investments a less structured and centralized.! Rights and privacy change and progressively severe and frequent extreme weather events are becoming to... The output of this study has implications for portfolio construction and risk assessment the discussions often on. From current geopolitical tensions more apparent than the unfolding competition between China and the United States former CEO.

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