@ Thomson Reuters, Sales 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. Improve your understanding and modeling of country and economic risk across countries and sectors. Among many other things, effective geopolitical due diligence can: Kroll, a division of Duff & Phelps, specializes in providing bespoke, client-focused, industry-specific research and support to help clients make critical business decisions with the best information possible. 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. 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. Complying with anti-money laundering and anti-bribery and corruption regulations. 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. Managing risk in today's environment is complex. 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. 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" : [ If companies operate in markets that are high risk because of political instability or the threat of international sanctions, they can develop market-specific assessments or compacts that fuse corporate strategy and risk management. As political frictions inside and among regions heat up, the likelihood increases that they will affect a global enterprises operations, performance, or people. for broadcasters and publishers, Explore our tax and 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. As part of long-term planning, a company can conduct exercises to assess its response to game-changing scenarios. "speed": 600, 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 businesss board can apply a materiality test to pinpoint what it should dedicate time to discussing. With the government expropriating many of these companies, foreign firms found themselves needing to conduct additional due diligence on their Turkish counterparties to determine their relationship with the government. Many companies, both financial and non-financial, were caught off guard, despite Putin having telegraphed his intentions for months in advance. BCG X disrupts the present and creates the future by building bold new tech products, services, and businesses. firms, Access global tax, legal, US Wants To Remove Iran From UN Womens Commission, Geopolitical Intelligence Group: Staying Ahead with Intelligence Services. Part of managing geopolitical risk is considering the ramifications of a companys core narrative. 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. Expropriation Geopolitical events can manifest themselves in many ways. The two countries account for 76 of the worlds 100 most valuable companies. Stakeholder and Influence Mapping 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. Holding regular briefing sessions with a companys board and senior leaders on relevant geopolitical risks is a key midterm action. 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 (2019). And differences can dissolve into disagreements about risk and Compacts provide strategic guidance for engaging within a country. Our intelligence analysts are building on 20 years experience in understanding political risks faced by our clients in insurance and financial services. Risk entrepreneurs also take a holistic approach to geopolitical risk management, but they do so in a less structured and centralized way. 2. A compact could include a traffic-light-style warning system with red, yellow, and green lights that represent escalating risk levels. According to our research, the consistent winners apply a highly developed approach to geopolitical risk management that emphasizes opportunity rather than just mitigation, involves the entire organization, and leverages sophisticated and robust analytical processes. Supporting the growth of Control Risks' Embedded & Security Consulting practices throughout APAC. Financial risks have probably never been more acute. Below are several examples in which Kroll was able to help clients anticipate the type, probability and impact of geopolitical volatility on its operations in key emerging markets. Eurasia Group 2023. Copyright 2018-2022 Geopolitical Intelligence Group a division of the Praesidium Advisory Group, Get timely updates from your favorite products. The most successful opportunists carefully monitor any situation that may, at first glance, appear to be a threat. Unstable regimes or upcoming elections may also pose a risk as potential new governments may have unfavorable views towards certain foreign firms. Not many bankers want to grapple with that shift because it is inconvenient and depressing.. Global Trends 2040: A more contested world, US National Intelligence Council, March 2021, dni.gov. Whats their secret? Interviews with Geopolitical Analyst Ian Bremmer. Marcin Grajewski, The EU strategic autonomy debate: What think tanks are thinking, European Parliament Think Tank, March 30, 2021, europarl.europa.eu. Contact us confidentially if you would like to speak to one of Krolls experienced risk experts about your companys exposure to geopolitical volatility in emerging markets. The challenges that geopolitical risks create will get worse. Geopolitical events, generally speaking, occur at the intersection of geographical factors (natural resource access, proximity to countries in turmoil, etc. 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. We have developed an analytical tool for assessing an organizations geopolitical risk management practices and opportunity. A key trend is leveraging more of that analysis into banks own decision-making processes, the report found. 3 Commodity prices rose sharply 4 after Russia . 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. 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. 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 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. Something went wrong. Geopolitical Intelligence Group (GIG) is a leading provider of intelligence services, offering strategic and operational insights into the complex geopolitical environment that affects businesses. Otherwise, internal fissures can build and burst in a way that damages culture, reputation, and performance. for political and security risk firms that sell their services or analysis to client companies (e.g. Political risk monitoring. Internationally it poses increasing management challenges, particularly at board level. Geopolitical risk is the number one global corporate risk. 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. . Sydney Olympic Park NSW 2127 Having an intimate knowledge of these diverse, complex and developing dynamics is critical in order to identify challenges before they become problems. Read more. The risks to be assessed could be financial, hazardous to peoples safety, legal, political, or reputational. Our policy and political risk consulting team helps business leaders to anticipate, analyze and navigate the challenges arising from political developments. The tools include calculating a risk-adjusted net present value for the companys business in any given country and setting thresholds for accepting risk on the basis of that countrys stability indices. 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. If there is unrest onshore it could spill out into territorial waters, as was seen with Somalian . Meanwhile continuing shortages of raw materials (39%), logistics and warehousing (35%) and components (33%) are all . Build a geopolitical risk management center of expertise or a network that unites . 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. International Business, March 30, 2021 Governments can confiscate assets, nationalize property, breach contracts, impose embargos or prohibit trade with specific countries. Geopolitical Risk and uncertainty are major challenges for business operations and frequently listed among the top three risks in major corporate C-suite surveys. 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. Understand counterparty risk with forward-looking analysis of reputational, legal and political risks associated with new or existing partners, Risk Quantification They should regularly look up from tending to the immediate needs of their operating environments to learn, adapt, and prepare for external and internal shocks and pressures. But so do some pharmaceutical, technology, and packaged goods companies. Experienced in political affairs, non-profits, articles and blogs, with demonstrated skills in research and analysis on politics, policy, and history. 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. 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