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. Enter your username or email to reset your password. . Kroll OnTrack Inc. or their affiliated businesses. 1 Eurasia Group 2023. The 16th edition of the Global Risks Report, published by the World Economic Forum with support from Marsh McLennan, highlights the disruptive implications of major risks, including the COVID-19 pandemic, that may reshape our world in 2021 and over the next decade. Yet, companies find Geopolitical Risk difficult to fully understand and even more challenging to manage. 1. Case Study 3 Our intelligence team works with regional field ops who know every corner of the . Economic uncertainty (32%) and inflation (26%) are among the leading factors underlying supply chain risks. The firm serves financial institutions, private equity . Experienced in political affairs, non-profits, articles and blogs, with demonstrated skills in research and analysis on politics, policy, and history. To ingrain the importance of external relations throughout their organizations, some companies rotate high performers and potential candidates for upper management into country leadership positions, where risk management becomes one of their duties. Geopolitical risk, however, is unlike credit, liquidity, or counterparty default risk. 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. Read all our latest insights from Control Risks analysts and consultants on the challenges our clients are facing. 3 Seerist is the only augmented analytics solution for threat and risk intelligence professionals. "dots": false, The report draws on the survey results from nearly 700 experts and decision-makers globally who were asked about their concerns . Please try again later! . Ian Bremmer is the president and founder of Eurasia Group, the leading global political risk research and consulting firm started in 1998. and risk management resources for todays professional services Geostrategic Business Group | EY - Global Close search Trending Why Chief Marketing Officers should be central to every transformation 31 Jan 2023 Consulting The CEO Imperative: How will CEOs respond to a new recession reality? Not surprisingly, several oil and gas companieswhich often make large, long-term investments in high-risk countries amid frequently shifting environmental-protection policiesfall in this category. 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 Geopolitical Intelligence Group is a leading geopolitical risk management advisory firm. 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. 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. 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 . Nascent-risk managers use an almost entirely defensive strategy, with minimal organization and processes. Geopolitical Intelligence Group (GIG) is a leading provider of intelligence services, offering strategic and operational insights into the complex geopolitical environment that affects businesses. 2. 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. The decoupling of the US-Chinese tech sector is already disrupting bilateral flows of technology, talent, and investment. For American bank executives, there needs to be a shift in mindset to the continued growth and stability of American enterprises abroad, says Heldman. Our policy and political risk consulting team helps business leaders to anticipate, analyze and navigate the challenges arising from political developments. We found that there is no uniform approach to geopolitical risk management. /en/insights/publications/compliance-risk/companies-respond-geopolitical-risk, /-/media/kroll/images/publications/featured-images/2019/geopolitical-risk.jpg?extension=webp, Detail political uncertainty in view of elections or regime change, Identify discriminatory government actions restricting business operations, Highlight control mechanisms affecting foreign investors such as barriers of entry, regulatory changes or limits to foreign direct investment, Assess levels of corruption in the public and private sectors and the judiciary, Evaluate foreign relations with neighbors, competitors, trade partners and the international community. 5 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. Turn qualitative country risk information into quantitative risk analysis and scores, Country Risk Investment Model Financial risks have probably never been more acute. The Ukraine war is likely to drive geopolitical fragmentation and the emergence of blocs, in our view, BlackRock said in its report. Please try again later. Coco Feng, Chinese president Xi Jinping seeks to rally countrys scientists for unprecedented contest,. Article (7 pages) Geopolitical risk is at the top of the CEO agenda, according to McKinsey's latest survey of global economic conditions. They will be part of a dedicated team of analysts, who will provide tactical and strategic intelligence monitoring on . The other stream is to work for such client companies directly, in an "in-house" role - i.e. MAX's Geopolitical Intelligence Services knows your part of the world because we're part of it too. As a result, the company was able to significantly expand its cloud business and gain advantage over competitors that were slower to act. 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. Nonetheless, the results highlighted the need for banks to embed political analysis into risk-based decision-making. Comprehensive spectrum of risk-based screening and due diligence solutions. Such a test would include a time frame for execution and possible technical options. {"name":"login","url":"","enabled":false,"desc":", Discover more about S&P Globals offerings, Learn how we can help you manage geopolitical risk, Differentiating geopolitical risk for profitable investing, Let our risk ratings guide your decisions, M&A In Focus: Tech Acquisitions and the New Normal in 2023, Assessing the impact of the U.S. Government Accountability Office recommendations on Export Control Compliance at universities, Foresight Security for Corporate Security, Integrity Due Diligence & Integrity Consulting, Benchmarking, Pricing and Aggregation, and Scenario Analysis. Others may opt to identify as global entities because of the access it accords them to pursue business opportunities in emerging markets. All rights reserved. @ Thomson Reuters, Sales 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" : [ Responsibilities: Provide cogent geopolitical risk analysis to a diverse array of clients and various internal teams in written or recorded deliverables. 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. Successful geopolitical risk managers tend to hire a cadre of personnel with experience in doing business in the market and dealing with local agencies. 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. Accurately forecast, quantify, and compare the financial viability of new investments and existing business activities by sector and project type, Bespoke Risk Scoring 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. 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. 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. 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. Improve your understanding and modeling of country and economic risk across countries and sectors. 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.. 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. 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. 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. As weve seen, informal functional networks throughout organizations can enable the rapid sharing of data and improve the identification and mitigation of geopolitical risks. Geopolitical events can manifest themselves in many ways. 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. 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. legal content, expertise, and technology, Find essential resources A confirmation email has been sent to you. One consumer packaged goods company we studied has developed a strong knowledge-sharing culture among functional networks. Shipping will increasingly be drawn into geopolitical disputes," says Kinsey. Unfortunately, geopolitical risk commonly is misunderstood by the Geopolitical shifts and technology changes are transforming international trade, creating both risks and opportunities for companies that can navigate this new environment. Citi. Internationally it poses increasing management challenges, particularly at board level. The Company: International Consulting Company is a global consulting firm based in Hong Kong. Sometimes, the payoff is simply that the company can continue doing business as usual. (See Exhibit 1.) Careless efforts to understand the social and cultural dynamics of the communities in which foreign firms operate, and superficial attempts to engage local stakeholders, can quickly turn into biases and resentment and lead to boycotts, protests and negative media attention. 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. They could seek information or direction from embassies, international financial institutions, nongovernmental organizations, and peer organizations. Major geopolitical events can often arise quickly and unpredictably. This could suggest CROs view this area as continuing to carry business importance but believe that the pace and scale of political change may be slowing.. 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. Risk Consulting. 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