Compacts provide strategic guidance for engaging within a country. Sydney Olympic Park NSW 2127 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. 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. Part of managing geopolitical risk is considering the ramifications of a companys core narrative. Please feel free contact with us if you have any further questions or concerns, Level 1, 102 Bennelong Parkway, Theyre the equity investors that reap rich returns by snapping up stakes in undervaluedbut soundassets in the challenging emerging markets that others shun. For that reason, a company may need to issue guidance on a range of other topics, such as the appropriate way to discuss geopolitically sensitive topics in publications or speeches and how to depict contested borders on maps. 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. 11 Jan 2023 CEO agenda Six ways asset managers can prepare for an uncertain future 2 Feb 2023 Wealth and asset management One energy company, for example, established a country chair position, which is typically assigned to the most senior business executive in a given country and is seen as a prestigious step toward advancement to top management. Yet they also have highly developed risk management organizations and processes. 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. 2023 Geopolitical Outlook . "autoplay":true, Stress in global financial markets is significant. Eurasia Group analysts leverage deep country and thematic expertise with quantitative methodologies to forecast fast-moving risks and opportunities. Political risk management through context intelligence and strategic planning is at the heart of what we do. Supporting corporate third-party management programs to drive risk-based due diligence decisions. Successful geopolitical risk managers tend to hire a cadre of personnel with experience in doing business in the market and dealing with local agencies. Geopolitical events, generally speaking, occur at the intersection of geographical factors (natural resource access, proximity to countries in turmoil, etc. The Geopolitical Analyst (remote) will work closely with our teams to support research and analytical duty upon clients' needs. 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 . . The report draws on the survey results from nearly 700 experts and decision-makers globally who were asked about their concerns . Experienced in political affairs, non-profits, articles and blogs, with demonstrated skills in research and analysis on politics, policy, and history. Geopolitical Intelligence Group (GIG) is a leading provider of intelligence services, offering strategic and operational insights into the complex geopolitical environment that affects businesses. . 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 Company: International Consulting Company is a global consulting firm based in Hong Kong. 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. For example, the Iran nuclear talks have significant regional and global consequences. 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. Please try again later. 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. Nearly half of bank CROs (48%) plan to broaden methods for identifying new or emerging political risks and a quarter plan to build new tools for qualitative tracking and reporting on political risk measures.. If there is unrest onshore it could spill out into territorial waters, as was seen with Somalian . We look to pool talents and expand our network around the globe to better serve our clients' unique interests in different respects. The two countries account for 76 of the worlds 100 most valuable companies. 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. Not engaging in such discussions in the current geopolitical context would be malpractice. Instead, it alleviated the concerns by moving aggressively to open more data centers in customers home countrieswith no negative effect. "Heightened political risk globally raises the threshold for unrest, with implications for shipping, such as the ability to secure crews and access ports safely. 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. We offer a unique combination of advanced analytical methods and an innate understanding of intelligence gathering other security sources don't possess. 1 Holding regular briefing sessions with a companys board and senior leaders on relevant geopolitical risks is a key midterm action. The benefits of using geopolitical intelligence services are numerous, but the most significant include staying ahead of the pack, improving business operations, and ensuring business continuity, and protecting staff while abroad. Get the latest news and intelligence on global issues impacting business, politics, economics, military, security and energy. Others may opt to identify as global entities because of the access it accords them to pursue business opportunities in emerging markets. Full-Time. BCG X disrupts the present and creates the future by building bold new tech products, services, and businesses. Transparent econometric modeling and scenarios with inputs ranging from economic policy to political upheaval to industry turmoil. Our intelligence analysts are building on 20 years experience in understanding political risks faced by our clients in insurance and financial services. But the discussions often focus on a specific investment, project, or market entry or exit. Cultural Missteps 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. 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. Today, the company has offices in New York, Washington, and London, as well as a network of experts and resources around the world. Political risk consulting. Yet, companies find Geopolitical Risk difficult to fully understand and even more challenging to manage. Risk Consulting. Because the company sells its products almost everywhere, problems that pop up in one country often may have already been solved in another. This sentiment largely continued in the second . However, it added, only a subset of chief risk officers (CROs) recognize this.. by Systemic-risk managers adopt a primarily defensive position, focusing on protecting their businesses from the downsides of change. Nowhere is the fallout from current geopolitical tensions more apparent than the unfolding competition between China and the United States. Holistic-risk evaluators have the most highly developed geopolitical risk management operations. Many company boards already deliberate geopolitical risks to one degree or another. A quick message or email to the global functional marketing, finance, or risk community, the company told us, allows for rapid troubleshooting, the cross-pollination of insights, and the sharing of best practices. Creating short-term, midterm, and long-term response strategies ensures that a company can not only handle a fast-changing situation or emergency but also make the investments needed to seize opportunities and become more resilient. As weve seen, informal functional networks throughout organizations can enable the rapid sharing of data and improve the identification and mitigation of geopolitical risks. Capital reserves, credit portfolios, investment policies and capital and debt profiles all demand constant scrutiny to adequately manage and mitigate risk. As a management consultant, Dr. Smith has worked for PA Consulting Group . The EY survey last year on bank risk management noted that chief risk officers may be underestimating the potency of political change (with) only about half viewing (geo)political risks as among the most important emerging risks over a five-year horizon this is down from 60% in our last survey in 2019. Norwegian Risk Consulting International - NRCI - is a geopolitical risk consultancy founded in 2010. In . Our main office is located in Oslo. 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. But in the age of instant information, the story a company tells about itself in one market wont stay there. Learn More link icon. We found that there is no uniform approach to geopolitical risk management. Marcin Grajewski, The EU strategic autonomy debate: What think tanks are thinking, European Parliament Think Tank, March 30, 2021, europarl.europa.eu. 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. 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. This research seeks to understand the sources and consequences of geopolitical risks. Such a consensus can create a set of guiding principlesand, as importantly, a set of trust-based relationships and mutual understanding across the organizationthat enables rapid, purposeful reaction grounded in a shared set of priorities when risk scenarios play out. Managing geopolitical risk. Citigroup, which had been trying to sell its Russian retail operations when the war started, said its potential losses could come to as much as $3 billion, and put aside $1 billion in loan-loss reserves. The Position . Sign up to receive periodic news, reports, and invitations from Kroll. This website uses cookies. 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. How to factor geopolitical risk into technology strategy | EY - US Trending US pandemic response and relief funding - proactively mitigating fraud, waste and abuse 2 Feb 2023 The COO Imperative: How human emotions can unlock supply chain success 23 Jan 2023 Consulting 2023 Global economic outlook: Transforming uncertainty into opportunity Leverage unparalleled Our . 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 for broadcasters and publishers, Explore our tax and Companies may want to gather internal and external perspectives before deciding what to include in market compacts. Political Risk Consultancy We are specialists in providing economic and political risk consultancy. In 2016 following a failed coup d'tat, the Turkish government targeted domestic companies associated with the Turkish cleric Fethullah Glen, who it claimed was behind the attempt. Each event carries it own risks, and each risk its own consequences. 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. & account inquiries, For CA: Do not sell my personal information. A strong cross-functional interface is critical, especially for companies that take a holistic approach to risk assessment. being employed directly by an oil firm or airline . Unfortunately, geopolitical risk commonly is misunderstood by the Part of managing geopolitical risk is considering the ramifications of a companys core narrative. Thats one finding from the US National Intelligence Councils report Global Trends 2040: A more contested world. All rights reserved. Questions to ask about key business risks arising from geopolitical and related crises Strategic, operational, financial and compliance risks are common level-one risk categories that board members and management need to consider. The degree to which banks systematically analyze political risks varies across the industry. (See Exhibit 2.). 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. Stakeholder and Influence Mapping . 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Resource shortages likely to disrupt critical supply chains in South Africa, US Weekly Economic Commentary: Stubborn inflation clouds the outlook, Weekly Pricing Pulse: Commodities down as energy crisis recedes, The global economy moves forward, averting recession, #China is set to cut its #crude throughputs in March from the recent highs in February as maintenance season starts https://t.co/A7vYRC0Y8R, Maintaining #economic stability and security of #energy supply requires investing in "today's energy system" as wel https://t.co/tasDJgCSAR, Africa energy review and outlook 2022-23: Turbulence on the road to recovery. Stay there products, services, and each risk its own consequences business opportunities in markets. Is at the heart of what we do at the heart of what do. Of the access it accords them to pursue business opportunities in emerging markets Consulting Group the survey results nearly... 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