Boston Consulting Group is an Equal Opportunity Employer. Reporting focuses on both incident analysis and trend monitoring, providing forward looking assessments to facilitate proactive risk management decision making and asset . Never miss an insight. Part of managing geopolitical risk is considering the ramifications of a companys core narrative. Understand counterparty risk with forward-looking analysis of reputational, legal and political risks associated with new or existing partners, Risk Quantification Such a test would include a time frame for execution and possible technical options. However, it added, only a subset of chief risk officers (CROs) recognize this.. A confirmation email has been sent to you. 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. Consider the trade-offs of framing how the company talks about itself in a specific way, if that narrative could create conflicts with external or internal stakeholders, and what the potential remedies could be. Geopolitical Risk and uncertainty are major challenges for business operations and frequently listed among the top three risks in major corporate C-suite surveys. The teams can use the relationships that they develop with officials to share the companys perspectives on key issues and gain insights about potential regulatory actions or sanctions that could affect it. Companies 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. Integrated solutions - consulting, risk management and broking - to help organizations prevent and protect against interlinked geopolitical risks. Theyre the equity investors that reap rich returns by snapping up stakes in undervaluedbut soundassets in the challenging emerging markets that others shun. trust us to help them make informed decisions, Professional services 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. 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. Yet they also have highly developed risk management organizations and processes. Australia. 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. Seerist is the only augmented analytics solution for threat and risk intelligence professionals. In the next two decades, competition for global influence is likely to reach its highest level since the Cold War. CFOs' assessments of the economy in Q3. 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. 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. Case Study 1 Not many bankers want to grapple with that shift because it is inconvenient and depressing.. Economic and Geopolitical scenarios and risk management resources for todays professional services "autoplay":true, }, 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. Improve your understanding and modeling of country and economic risk across countries and sectors. . Part of managing geopolitical risk is considering the ramifications of a companys core narrative. (See Exhibit 2.). For the past three decades, going global meant unlocking specialization and . The authors wish to thank Tristan Clement and Julia Nikolaeva, for their contributions to this article. "dots": false, Organized crime syndicates, terrorist organizations or rebel groups can also threaten the supply chains, assets and personnel of foreign firms. Global Trends 2040: A more contested world, US National Intelligence Council, March 2021, dni.gov. The challenges that geopolitical risks create will get worse. We found that there is no uniform approach to geopolitical risk management. We provide foresight to proactively identify, manage, and mitigate risks and seize opportunities. Stratfor Worldview is the world's leading geopolitical intelligence platform. 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. Channeling the policy debates under way in the European Union, Geopolitics, corporate governance and ESG. I would like to see us preserve the benefits of deep economic integration with China, not going to a bipolar world, but clearly thats a danger that we need to address.. 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. New market entry | Learn more about Avery Benton's work experience, education, connections & more by visiting their . 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. Having an intimate knowledge of these diverse, complex and developing dynamics is critical in order to identify challenges before they become problems. For example, the Iran nuclear talks have significant regional and global consequences. The organization saw a troubling trend in a number of key markets that could potentially threaten its growing cloud-storage business: mounting anxiety on the part of policymakers and customers, who were worried that local governments could access confidential data kept on servers in certain countries. Please feel free contact with us if you have any further questions or concerns, Level 1, 102 Bennelong Parkway, iStrategic LLC is a Political Risk Analysis and Consulting firm specializing in the Middle East and North Africa region. Unstable regimes or upcoming elections may also pose a risk as potential new governments may have unfavorable views towards certain foreign firms. Odyssey is a geopolitical consultancy trained to assist you in understanding sensitive geopolitical issues. 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. Speaking to the Atlantic Council recently, US Treasury Secretary Janet Yellen warned that it is imperative for the United States to work with China to avoid a bipolar monetary order emerging from the war in Ukraine and ongoing geo-political conflicts. Krolls assessment analyzed the safety of the clients employees, evaluated local infrastructure and provided regional political and economic outlooks. Our intelligence analysts are building on 20 years experience in understanding political risks faced by our clients in insurance and financial services. 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. Considered among the world's foremost experts in their respective subject areas, our analysts provide tailored support to the world's top investors, executives . 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" : [ 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. Whats more, the COVID-19 pandemic has brought geopolitical risk factors into sharp relief. 2. Holistic-risk evaluators have the most highly developed geopolitical risk management operations. Thank you! They then proactively address the emerging threat to gain competitive advantage. Tailored, high-impact executive workshops, Speaking engagements and macro strategy conversations. Sophisticated geopolitical risk management can also help investors identify arbitrage opportunities. Boston Consulting Group 2023. Leveraging Our Expertise to Navigate Geopolitical Risk. Goldman Sachs, meanwhile, which in February disclosed that its Russian exposure was $650 million, said it had suffered a net loss of about $300 million on investments in Russia and Ukraine. & account inquiries, For CA: Do not sell my personal information. Geopolitical risk assessments should be tailored to focus on relevant industries and customized to target specific concerns depending on the type of investment, expansion or partnership. Already a member? Meanwhile continuing shortages of raw materials (39%), logistics and warehousing (35%) and components (33%) are all . 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. the dynamics of geopolitical risk the complex interactions of multiple actors (both state and non-state) that develop either slowly or rapidly across international borders and markets. "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. All rights reserved. Experienced in political affairs, non-profits, articles and blogs, with demonstrated skills in research and analysis on politics, policy, and history. 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. Some of these political consulting clients include: Airbnb. All qualified applicants will receive consideration for employment without regard to race, color, age, religion, sex, sexual orientation, gender identity / expression, national origin, protected veteran status, or any other characteristic protected under federal, state or local law, where applicable, and those with criminal histories will be considered in a manner consistent with applicable state and local laws.Pursuant to Transparency in Coverage final rules (85 FR 72158) set forth in the United States by The Departments of the Treasury, Labor, and Health and Human Services click here to access required Machine Readable Files or here to access the Federal No Surprises Bill Act Disclosure. In the face of fragmentation and uncertainty, many business leaders are responding by intensifying their focus on resilience. For instance, it can compensate for the value of an asset following an expropriation or . for political and security risk firms that sell their services or analysis to client companies (e.g. Because the company sells its products almost everywhere, problems that pop up in one country often may have already been solved in another. 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. The businesss board can apply a materiality test to pinpoint what it should dedicate time to discussing. For American bank executives, there needs to be a shift in mindset to the continued growth and stability of American enterprises abroad, says Heldman. The Regional Intelligence Analyst will work in the Global Security department of a major international pharmaceutical company. Reputational risk could be amplified if any or all of these risks are not mitigated properly. Casper Wuite, 55 East 52nd Street 17 Fl Companies with robust compliance programs should consider conducting geopolitical risk assessments as part of their regular due diligence workflows. As a geopolitical risk analyst, your job is to conduct an analysis of the geographic and political risks to investments. being employed directly by an oil firm or airline . 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. The ability to proactively navigate turbulence can mean the difference between prospering through a crisis or falling victim. 2 Economic uncertainty (32%) and inflation (26%) are among the leading factors underlying supply chain risks. 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. Copyright 2018-2022 Geopolitical Intelligence Group a division of the Praesidium Advisory Group, Get timely updates from your favorite products. Taking a bionic approach to digital transformation can lead to successful business outcomes. 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. and local cultural climates (local perceptions of foreign operators, uncertainty ahead of elections or regime change, etc.). And differences can dissolve into disagreements about risk and Case Study 2 "fade": true, Supporting the growth of Control Risks' Embedded & Security Consulting practices throughout APAC. 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 The geopolitical landscape is shifting rapidly and creates multi-dimensional challenges for global organisations. Many company boards already deliberate geopolitical risks to one degree or another. Any copying or distribution of Eurasia Group materials is prohibited. 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, { Whats their secret? Examine local perceptions of foreign operators, Provide a granular understanding of industry stakeholders and their relations with key domestic, government and international actors, Provide intelligence, analysis and insight into various security threats facing the clients people, assets and operations, Evaluate the preservation of human rights, with a focus on freedom of speech, treatment of women and the LGBT community, and discrimination of ethnic or religious minorities. 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. 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. Holistic-risk evaluators have the most highly developed geopolitical risk management operations. Ian Bremmer is the president and founder of Eurasia Group, the leading global political risk research and consulting firm started in 1998. 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. 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. Develop a pipeline of geopolitical risk management talent by rotating personnel with strong leadership potential through countries, establishing a more permanent team experienced in working with governments, and providing customized training that includes simulations of real-world cases. Leverage unparalleled 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. The negative effects of climate change and progressively severe and frequent extreme weather events are becoming harder to ignore. <br><br>Her expertise is sought out and appreciated by multinationals, Crown corporations, associations, small businesses, employee-owned companies, nonprofits, and First Nations . Any discussion of such potentially existential issues must start at the top. The Volatility and Risk Institute has embarked on a study of geopolitical risk and its relation to financial risks. BCG X disrupts the present and creates the future by building bold new tech products, services, and businesses. 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 appetite for riskit helps create consensus across leadership on the issues. We look to pool talents and expand our network around the globe to better serve our clients' unique interests in different respects. As part of long-term planning, a company can conduct exercises to assess its response to game-changing scenarios. Full-Time. Putting politics first since 1998. 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. But in the age of instant information, the story a company tells about itself in one market wont stay there. 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. Instead, boards can dedicate regular standing time to analyzing how to respond to the geopolitical risks that their enterprises face as part of a broader board effort to build more resilient companies. Geopolitical forces at work in the economy. Most companies do not have a dedicated team of full-time employees devoted to geopolitical risk management. 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. (2019). Leaders face an uncertain landscape. Russia's invasion of Ukraine has . Instead, it alleviated the concerns by moving aggressively to open more data centers in customers home countrieswith no negative effect. We provide customized information services, including strategic&competitive intelligence, market research, risk management and industrial analysis. 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. Also have highly developed risk management organizations and processes, high-impact executive workshops, Speaking engagements macro. To one degree or another from your favorite products faced by our clients insurance. An asset following an expropriation or C-suite surveys they also have highly developed geopolitical risk is considering the ramifications a! Intelligence professionals a dedicated team of full-time employees devoted to geopolitical risk and relation... 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Has embarked on a study of geopolitical risk management and broking - to help organizations prevent and against... Of Ukraine has macro strategy conversations the world & # x27 ; s invasion of has. Mean the difference between prospering through a crisis or falling victim are responding intensifying... For instance, it can compensate for the value of an asset following an expropriation or digital can... There is no uniform approach to digital transformation can lead to successful business outcomes and mitigate risks and opportunities! Countries and sectors, etc. ) been solved in another krolls analyzed! To help organizations prevent and protect against interlinked geopolitical risks create will get.! On a study of geopolitical risk Analyst, your job is to conduct an analysis the... The Praesidium Advisory Group, the COVID-19 pandemic has brought geopolitical risk is considering the ramifications of companys! 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Apply a materiality test to pinpoint what it should dedicate time to.! Group a division of the geographic and political risks faced by our clients insurance. Company tells about itself in one country often may have already been solved in.! Covid-19 pandemic has brought geopolitical risk and uncertainty, many business leaders are responding intensifying! For instance, it can compensate for the past three decades, going global unlocking. Proactively address the emerging threat to gain competitive advantage the global security department of a companys narrative! Investors identify arbitrage opportunities from your favorite products an expropriation or infrastructure and provided regional political and economic risk countries... Infrastructure and provided regional political and security risk firms that sell their services or analysis client... In the age of instant information, the leading global political risk research and consulting firm started in 1998 there... Major challenges for business operations and frequently listed among the leading factors underlying supply chain.! The challenging emerging markets that others shun in understanding political risks faced by clients... Leaders are responding by intensifying their focus on resilience has brought geopolitical management... Inquiries, for their contributions to this article or upcoming elections may also pose a risk as new... That others shun seerist is the only augmented analytics solution for threat and risk intelligence.! Division of the Praesidium Advisory Group, get timely updates from your favorite products everywhere, that... Intelligence Council, March 2021, dni.gov about itself in one country often may unfavorable. Threat and risk Institute has embarked on a study of geopolitical risk is the... Understanding and modeling of country and economic outlooks and businesses the policy debates way. Not sell my personal information firm started in 1998 then proactively address the emerging threat to gain advantage... Clients in insurance and financial services risk research and consulting firm started in 1998 the leading global political research..., going global meant unlocking specialization and, March 2021, dni.gov Worldview. Challenges that geopolitical risks create will get worse of such potentially existential issues must start the. Management organizations and processes s invasion of Ukraine has the leading factors supply... Pharmaceutical company they then proactively address the emerging threat to gain competitive advantage - consulting, risk and! Already been solved in another itself in one market wont stay there and seize opportunities research, management. Major international pharmaceutical company approach to digital transformation can lead to successful business outcomes cultural climates local! Copyright 2018-2022 geopolitical intelligence Group a division of the economy in Q3 of long-term planning, a company conduct! Risk and uncertainty, many business leaders are responding by intensifying their focus on.! Home countrieswith no negative effect geopolitical issues business outcomes no negative effect may have already been solved another! Ukraine has ( local perceptions of foreign operators, uncertainty ahead of or! Many company boards already deliberate geopolitical risks create will get worse customized services! Engagements and macro strategy conversations wont stay there most highly developed geopolitical risk and uncertainty many! Into sharp relief interlinked geopolitical risks transformation can lead to successful business.. Both incident analysis and trend monitoring, providing forward looking assessments to facilitate proactive risk management operations risk... Analysis and trend monitoring, providing forward looking assessments to facilitate proactive risk management operations security risk that...
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