Unfortunately, geopolitical risk commonly is misunderstood by the Andrew Cuomo, Governor (NY) Bill & Melinda Gates Foundation. Accurately forecast, quantify, and compare the financial viability of new investments and existing business activities by sector and project type, Bespoke Risk Scoring 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. BCG was the pioneer in business strategy when it was founded in 1963. Geopolitical Intelligence Group (GIG) is a leading provider of intelligence services, offering strategic and operational insights into the complex geopolitical environment that affects businesses. Organized crime syndicates, terrorist organizations or rebel groups can also threaten the supply chains, assets and personnel of foreign firms. accounting technology, guidance, and expertise, Let us help you solve 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. 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. | Learn more about Avery Benton's work experience, education, connections & more by visiting their . We evaluated their organizations approaches along three dimensions: the strategic role of geopolitical risk management within the company, the ways in which different parts of the organization are leveraged, and the use of risk management processes and tools. Human Rights Violations Any discussion of such potentially existential issues must start at the top. Utilize our expert insight and data to get risk scores tailored to your specific metrics, Benchmarking, Pricing and Aggregation, and Scenario Analysis 3 Commodity prices rose sharply 4 after Russia . Our geopolitical risk intelligence solutions provide end-to-end coverage of political, violent, sovereign, banking and investment risk worldwide. 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. Please try again later. Transparent econometric modeling and scenarios with inputs ranging from economic policy to political upheaval to industry turmoil. Our global multidisciplinary teams offer strategic legal and regulatory advice to help . While there is no universal formula for success, building robust geopolitical risk management organizations and processes is key to begin navigating an uncertain world. Because the company sells its products almost everywhere, problems that pop up in one country often may have already been solved in another. Such external pressures exert other internal pressures on corporate leaders. Already a member? Taking a bionic approach to digital transformation can lead to successful business outcomes. Supporting the growth of Control Risks' Embedded & Security Consulting practices throughout APAC. by Most companies do not have a dedicated team of full-time employees devoted to geopolitical risk management. To sharpen their view of the shifting global landscape, a growing number of major multinational corporations have been investing in their abilities to identify trends early and to influence the decisions of host governments ahead of major transitions, such as sudden changes in trade agreements or national governments. 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. iStrategic LLC is a Political Risk Analysis and Consulting firm specializing in the Middle East and North Africa region. While no one can predict the future . . 2 for political and security risk firms that sell their services or analysis to client companies (e.g. Marcin Grajewski, The EU strategic autonomy debate: What think tanks are thinking, European Parliament Think Tank, March 30, 2021, europarl.europa.eu. Geopolitical risk monitoring Read more Read less Comprehensive monitoring of physical security and regulatory challenges facing business operations in any country and globally. Equity investments are subject to market risk or the risk that stocks will decline in response to such factors as adverse company news or industry developments or a general economic decline. | Eurasia Group is the world's leading global political risk research and consulting firm. In volatile times such as these, a companys instinct is to focus on defenseto protect the business from harm. A client operating in the entertainment industry was seeking to incorporate in a foreign jurisdiction from which it would base its regional activities. Case Study 3 The negative effects of climate change and progressively severe and frequent extreme weather events are becoming harder to ignore. They explain, "In volatile times such as these, a company's instinct is to focus on defense to protect the business from harm. Geopolitical risk is the number one global corporate risk. 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. 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. Our intelligence team works with regional field ops who know every corner of the . Whats more, the COVID-19 pandemic has brought geopolitical risk factors into sharp relief. Companies must consider how to harness capabilities such as 5G and AI without falling victim to geopolitically based regulatory or reputational cross fire. BCG X disrupts the present and creates the future by building bold new tech products, services, and businesses. }, 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. Considered among the world's foremost experts in their respective subject areas, our analysts provide tailored support to the world's top investors, executives . CFO sentiment got off to a very strong start in the first quarter of 2017. Trade Wars and a Stronger Europe. Not many bankers want to grapple with that shift because it is inconvenient and depressing.. "fade": true, 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 In the next two decades, competition for global influence is likely to reach its highest level since the Cold War. Related Expertise: <br><br>Her expertise is sought out and appreciated by multinationals, Crown corporations, associations, small businesses, employee-owned companies, nonprofits, and First Nations . 11 Jan 2023 CEO agenda Six ways asset managers can prepare for an uncertain future 2 Feb 2023 Wealth and asset management 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. Derek Leatherdale and Hanif Barma from the Risk Coalition identify in this article the key things that any board or risk committee should consider in the context of the complex and volatile geopolitical environment in which business now operates. For instance, it can compensate for the value of an asset following an expropriation or . Our geopolitical risk intelligence solutions provide end-to-end coverage of political, violent, sovereign, banking and investment risk worldwide. Long-term planning can also cover such issues as the following: For both internal and external stakeholders, walking a geopolitical tightrope may cause leaders to redefine how they think about and position their companies. In . Some may, for commercial and strategic reasons, choose to strengthen ties to the countries where the companies are based. They then proactively address the emerging threat to gain competitive advantage. Part of managing geopolitical risk is considering the ramifications of a companys core narrative. 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. Political risk advisory Our ability to combine leading political expertise with timely and actionable insight for clients is at the core of our value. Our Asia-Pacific footprint is now a huge advantage.. GIG has nearly 2 decades of high-level experience consulting to a comprehensive portfolio of local and international clientele encompassing the government, corporate and private sectors. 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. Subscribed to {PRACTICE_NAME} email alerts. PwC's experts discuss the volatility of the global market and its potential impact. 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. Global Trends 2040: A more contested world, US National Intelligence Council, March 2021, dni.gov. We provide customized information services, including strategic&competitive intelligence, market research, risk management and industrial analysis. Kroll OnTrack Inc. or their affiliated businesses. Companies should also be vigilant about risks presented by suppliers. "Heightened political risk globally raises the threshold for unrest, with implications for shipping, such as the ability to secure crews and access ports safely. Nowhere is the fallout from current geopolitical tensions more apparent than the unfolding competition between China and the United States. Even leading global companies within the same industry can differ sharply, depending on their corporate cultures and geopolitical risk appetites. 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. New York NY 10055. In such sessions, the high-level stakeholders can discuss the companys potential exposures and review ongoing mitigation efforts. 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. Global geopolitical risk and economic uncertainty have increased dramatically over the past decade, according to leading indices. Seerist is the only augmented analytics solution for threat and risk intelligence professionals. Business strategy and operational efficiency require constant evaluation in a complex and often volatile environment. Amid such a complex landscape, boards and corporate leaders should evaluate the many economic and other factors that may be important to their companies' strategies, investments, and growth objectives. 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. 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. 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. This sentiment largely continued in the second . Systemic-risk managers adopt a primarily defensive position, focusing on protecting their businesses from the downsides of change. legal content, expertise, and technology, Find essential resources 5 As part of long-term planning, a company can conduct exercises to assess its response to game-changing scenarios. Experienced in political affairs, non-profits, articles and blogs, with demonstrated skills in research and analysis on politics, policy, and history. 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. Kroll was able to provide a report detailing the countrys foreign relations, its position as an economic and business center in the region, the local and regional attitudes towards foreign direct investment and the jurisdictions evolving tax laws for foreign firms, which helped the client decide whether to proceed with incorporating in the country. A confirmation email has been sent to you. 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. Today, the company has offices in New York, Washington, and London, as well as a network of experts and resources around the world. Henry EnglerThomson Reuters Regulatory Intelligence, The war in Ukraine has shed an unflattering light on the ability of large US financial firms to manage geopolitical risk, a type of risk that relies more on qualitative and subjective analysis than models and spreadsheets. Leaders can cultivate cohesiveness by bringing key stakeholders to the table to share views on a given engagement or project. Capital reserves, credit portfolios, investment policies and capital and debt profiles all demand constant scrutiny to adequately manage and mitigate risk. Thats one finding from the US National Intelligence Councils report Global Trends 2040: A more contested world. Reputational risk could be amplified if any or all of these risks are not mitigated properly. Expropriation Sign up to receive periodic news, reports, and invitations from Kroll. Technology, especially, has become what Chinese president Xi Jinping has called the main battleground of global power rivalry. 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 . Many governments have introduced laws requiring companies to take actions to mitigate the risk of adverse human rights impacts. 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. 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. 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. International Trade, A compact could include a traffic-light-style warning system with red, yellow, and green lights that represent escalating risk levels. Nascent-risk managers use an almost entirely defensive strategy, with minimal organization and processes. 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. 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. Others may opt to identify as global entities because of the access it accords them to pursue business opportunities in emerging markets. Geopolitics is "the study of the effects of Earth's geography (human and physical) on politics and international relations.". We provide foresight to proactively identify, manage, and mitigate risks and seize opportunities. 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. Read all our latest insights from Control Risks analysts and consultants on the challenges our clients are facing. (2019). The Great Decoupling. Banks are used to quantifying risks that can be measured, with long, historical data series serving as inputs to create future scenarios. 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. 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. Stay connected with us and get all latest updates. With Thomson Reuters Regulatory Intelligence, you can find and get clarity on regulatory developments. (See Exhibit 1.) Theyre the equity investors that reap rich returns by snapping up stakes in undervaluedbut soundassets in the challenging emerging markets that others shun. Supporting corporate third-party management programs to drive risk-based due diligence decisions. Failing to adequately consider risk limitations and allocations when drafting integrated project contracts can result in the unintended consequence of your firm paying for the errors or omissions of your subconsultants. Yet, companies find Geopolitical Risk difficult to fully understand and even more challenging to manage. Boston Consulting Group 2023. Seek to continuously measure and monitor the impact of geopolitical risk management activities on the business. Ian Bremmer is the president and founder of Eurasia Group, the leading global political risk research and consulting firm started in 1998. 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. Geopolitical Intelligence Group is a leading geopolitical risk management advisory firm. "speed": 600, Holistic-risk evaluators have the most highly developed geopolitical risk management operations. We look to pool talents and expand our network around the globe to better serve our clients' unique interests in different respects. They may have to balance, given the risks, near- and long-term market priorities. & account inquiries, For CA: Do not sell my personal information. In 2017, violence erupted in parts of Ethiopia as certain ethnic groups demonstrated against government discrimination. 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. Adaptive artificial intelligence combined with localised geopolitical risk expertise from Control Risks. A counterparty who defaults on a contract, or whose business . This website uses cookies. The businesss board can apply a materiality test to pinpoint what it should dedicate time to discussing. It becomes even more complicated when global events such as pandemics, cyberattacks, geopolitical upheavals, or supply . And they may have to grapple with a global workforce with divergent views on issues such as data privacy and human rights. 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" : [ Those risks could include securing operations and people amid political instability, ensuring that they comply with evolving local regulations in one market, and staying abreast with human-rights considerations in another. 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Ability to combine leading political expertise with timely and actionable insight for clients is at the of..., problems that pop up in one country often may have to balance, given risks. Us National intelligence Councils report global Trends 2040: a more contested world, US National intelligence Councils global... The fallout from current geopolitical tensions more apparent than the unfolding competition between China and the United States board... Risks that can be measured, with minimal organization and processes very strong start in the Middle East and Africa. Primarily defensive position, focusing on protecting their businesses from the downsides of change the. To mitigate the risk of adverse human rights its regional activities exposures and review ongoing mitigation.. Nowhere is the only augmented analytics solution for threat and risk intelligence solutions provide end-to-end coverage political. 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