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 value of being able to anticipate, synthesize, and harness risk for potential gain has never been greater. Note: Political risk consulting firms specializing in analyzing the business risk presented by the political environment in a region or country--including but not limited to regulatory risk in particular sectors, risks of appropriation or nationalization, and broader geopolitical risks. Evaluate key infrastructure and access to electricity, internet, labor, etc. US Wants To Remove Iran From UN Womens Commission, Geopolitical Intelligence Group: Staying Ahead with Intelligence Services. "dots": false, Companies may want to gather internal and external perspectives before deciding what to include in market compacts. However, it added, only a subset of chief risk officers (CROs) recognize this.. We study the dynamic effect of industry- and firm-specific geopolitical risk on firm-level investment. In the next two decades, competition for global influence is likely to reach its highest level since the Cold War. Partner & Director, Global Trade & Investment, Managing Director & Senior Partner; Global Leader, Energy Practice. Independent data and analysis for opportunity sizing, local partner selection, government stakeholder assessment and risk assessment. Geopolitical Intelligence Group is a leading geopolitical risk management advisory firm. Political risk analysis In an era of major geopolitical shifts, where liberal and democratic norms are constantly challenged, companies are increasingly required to factor political risks into their considerations. 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. Theyre the technology companies and oil producers that can tell a political backlash is brewing well before it hits full force and then use their foresight to reposition their businesses ahead of competitors. CFOs' assessments of the economy in Q3. iStrategic LLC is a Political Risk Analysis and Consulting firm specializing in the Middle East and North Africa region. BCG X disrupts the present and creates the future by building bold new tech products, services, and businesses. Read all our latest insights from Control Risks analysts and consultants on the challenges our clients are facing. "autoplaySpeed":8000 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. This website uses cookies. The authors wish to thank Tristan Clement and Julia Nikolaeva, for their contributions to this article. From project or investment selection, through market entry and ongoing risk monitoring and management, we can support you with actionable intelligence, business relevant forecasts, and tailored solutions. Coco Feng, Chinese president Xi Jinping seeks to rally countrys scientists for unprecedented contest,. . The role will be the global lead for looking at Geopolitical Risk across Nokia and what those impacts to might mean to Nokia's business and people. Odyssey is a geopolitical consultancy trained to assist you in understanding sensitive geopolitical issues. International Trade, | Learn more about Avery Benton's work experience, education, connections & more by visiting their . 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. Major geopolitical events can often arise quickly and unpredictably. 4. Adept & highly organized self-stater. Managing geopolitical risk. 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. In-depth analysis, they recognize, does not come solely from algorithms. A compact could include a traffic-light-style warning system with red, yellow, and green lights that represent escalating risk levels. Andrew S. Grove, Only the Paranoid Survive: How to Exploit the Crisis Points That Challenge Every Company, New York, NY: Currency, 1996. Capital reserves, credit portfolios, investment policies and capital and debt profiles all demand constant scrutiny to adequately manage and mitigate risk. With geopolitical risk on the rise in advanced economies, the house view on opportunity in markets such as the US, the UK, and China has become elusiveand boards and management teams are often divided on where to invest or allocate capital for long-term growth. A lot of American banks have operated under the assumption that more or less everything in the world is stable, said Heather Heldman, managing partner and principal at Luminae Group, a Washington, D.C.-based geopolitical risk consulting firm. By closely monitoring growing public support for greenhouse gas mitigation measures in many countries, for example, a leading oil-and-gas company was able to invest in renewable natural-gas technologies much earlier than its peers. We'll email you when new articles are published on this topic. It is the first step in your regulatory compliance program because it allows you to track, flag and share regulations. 3 Our geopolitical risk intelligence solutions provide end-to-end coverage of political, violent, sovereign, banking and investment risk worldwide. Shipping will increasingly be drawn into geopolitical disputes," says Kinsey. Case Study 1 Sign in to the product or service center of your choice. firms, Expand your audience and your capabilities by joining our partner program, Integrate Thomson Reuters content and functionality to enhance your tools and workflows, Offering insight into corporations in the U.S. and abroad, Insights on issues concerning environmental, social, and governance topics, A look into the inner workings of government and the courts, Legal coverage focusing on the business and practice of law, Featuring an expanded insight into the world of tax professionals, Technology and innovation resource center, Exploring how technology and innovation will influence the evolution of future services, About Thomson One way to initiate a more strategic approach is by assessing the risks that matter the most to a business. According to the report, no single locale is likely to dominate all regions or domains, and a broader range of actors will compete to advance their ideologies, goals, and interests.. Governments can confiscate assets, nationalize property, breach contracts, impose embargos or prohibit trade with specific countries. Companies with robust compliance programs should consider conducting geopolitical risk assessments as part of their regular due diligence workflows. A client operating in the entertainment industry was seeking to incorporate in a foreign jurisdiction from which it would base its regional activities. But so do some pharmaceutical, technology, and packaged goods companies. Thank you! We call these archetypes holistic-risk evaluators, risk entrepreneurs, systemic-risk managers, and nascent-risk managers. Geopolitical risk monitoring Read more Read less Comprehensive monitoring of physical security and regulatory challenges facing business operations in any country and globally. Holding regular briefing sessions with a companys board and senior leaders on relevant geopolitical risks is a key midterm action. Meanwhile continuing shortages of raw materials (39%), logistics and warehousing (35%) and components (33%) are all . Supporting the growth of Control Risks' Embedded & Security Consulting practices throughout APAC. Such a test would include a time frame for execution and possible technical options. Unstable regimes or upcoming elections may also pose a risk as potential new governments may have unfavorable views towards certain foreign firms. It is by no means certain that they are ready for the next major crisis, experts say. Thats one finding from the US National Intelligence Councils report Global Trends 2040: A more contested world. Others may opt to identify as global entities because of the access it accords them to pursue business opportunities in emerging markets. 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. 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. 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. Otherwise, internal fissures can build and burst in a way that damages culture, reputation, and performance. Geopolitical events can manifest themselves in many ways. Obtain the data you need to make the most informed decisions by accessing our extensive portfolio of information, analytics, and expertise. China and the United States decoupling in the technology sphere is another political risk in 2020, considered by the Eurasia Group as "the most impactful . The 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. Expropriation Our privacy policy describes how your data will be processed. We offer our . Integrated solutions - consulting, risk management and broking - to help organizations prevent and protect against interlinked geopolitical risks. The degree to which banks systematically analyze political risks varies across the industry. Many companies, both financial and non-financial, were caught off guard, despite Putin having telegraphed his intentions for months in advance. Instead, they depend on personnel from government relations, strategy, and other business functions to identify and mitigate risks, with one function coordinating and consolidating input. Depending on the circumstance, a companys leaders may have to weigh the effect that political or media scrutiny on the companys operations in one area has on its holdings in other locales. 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. Geopolitical shifts and technology changes are transforming international trade, creating both risks and opportunities for companies that can navigate this new environment. 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. To enhance the role of geopolitical risk management and thus create tangible business opportunities, leaders should take the following steps: In every risk there is also an opportunity is a well-worn adage. Business strategy and operational efficiency require constant evaluation in a complex and often volatile environment. 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. Copyright 2018-2022 Geopolitical Intelligence Group a division of the Praesidium Advisory Group, Get timely updates from your favorite products. Not engaging in such discussions in the current geopolitical context would be malpractice. We support each client's unique risk profile . Successful geopolitical risk managers tend to hire a cadre of personnel with experience in doing business in the market and dealing with local agencies. . Organizations can be prepared to respond to geopolitical risks across multiple time frames. 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. 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. 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. 5. Provide cogent geopolitical risk . 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. 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