People may worry that a company will hold itself to different standards in different regions. Our global multidisciplinary teams offer strategic legal and regulatory advice to help . Andrew Cuomo, Governor (NY) Bill & Melinda Gates Foundation. 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. Eurasia Group 2023. Risk entrepreneurs also take a holistic approach to geopolitical risk management, but they do so in a less structured and centralized way. Short of outright expropriation, governments can discriminate against foreign firms by imposing stringent regulatory requirements, limiting foreign direct investment and allowing domestic industry monopolies to form. Our . oil companies, airlines, tech firms ,etc.). The report draws on the survey results from nearly 700 experts and decision-makers globally who were asked about their concerns . The negative effects of climate change and progressively severe and frequent extreme weather events are becoming harder to ignore. Any investment in taxable fixed-income securities is subject to certain risks, including credit risk, interest-rate risk, foreign risk, and currency risk. However, it added, only a subset of chief risk officers (CROs) recognize this.. They may have to balance, given the risks, near- and long-term market priorities. Get the latest news and intelligence on global issues impacting business, politics, economics, military, security and energy. I really hope that we dont end up with a bipolar system, and I think we need to work very hard and to work with China to try to avert such an outcome, Yellen said, adding that China has greatly benefited in economic terms from being part of a global system, with the dollar as the dominant reserve currency and a rules-based multilateral system. Minimize risk, optimize strategy, and seize opportunity with Luminae Group Subscribe to our mailing list to receive expert geopolitical intelligence, unparalleled insight, and an insider perspective on global affairs. 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. 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. 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. 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. Integrated solutions - consulting, risk management and broking - to help organizations prevent and protect against interlinked geopolitical risks. Geopolitical risk, however, is unlike credit, liquidity, or counterparty default risk. Provide cogent geopolitical risk . Sometimes, the payoff is simply that the company can continue doing business as usual. Theyre the equity investors that reap rich returns by snapping up stakes in undervaluedbut soundassets in the challenging emerging markets that others shun. In extreme cases, a disruptive event can jeopardize an entire business. We grouped companies into four general archetypes according to the extent to which they recognize and act on opportunities arising from geopolitical shiftsin addition to mitigating the downside risksand the intensity of focus and sophistication of processes with their organizations. Quantifying return on advocacy is difficult, however. But so do some pharmaceutical, technology, and packaged goods companies. Such a unit could, for example, analyze political events that threaten to disrupt the companys operations materially or prepare responses to government inquiries into sensitive topics. 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. 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. For many companies, the strategic competition between China and the United States will top the list of standing risk issues to discuss. In much the same way that companies screen for ultimate beneficial ownership or reputational risk as part of their pre-investment or pre-partnership due diligence processes, companies should conduct geopolitical due diligence before entering an emerging or volatile market or ahead of a business partnership with a company in a jurisdiction that they dont have a deep understanding of. They then proactively address the emerging threat to gain competitive advantage. 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. accounting technology, guidance, and expertise, Let us help you solve If political risk has hurt your company, political risk insurance can help mitigate the financial cost. Boston Consulting Group 2023. Industries that are positively exposed to geopolitical risks suffer a decline in investment that is larger than the aggregate effect. 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. 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. Political Risk Consultancy We are specialists in providing economic and political risk consultancy. Interviews with Geopolitical Analyst Ian Bremmer. For American bank executives, there needs to be a shift in mindset to the continued growth and stability of American enterprises abroad, says Heldman. Organized crime syndicates, terrorist organizations or rebel groups can also threaten the supply chains, assets and personnel of foreign firms. by Read all our latest insights from Control Risks analysts and consultants on the challenges our clients are facing. Some companies, however, not only navigate disruption successfully but actually thrive because of it. Independent data and analysis for opportunity sizing, local partner selection, government stakeholder assessment and risk assessment. Not engaging in such discussions in the current geopolitical context would be malpractice. 5. Leaders can cultivate cohesiveness by bringing key stakeholders to the table to share views on a given engagement or project. The Ukraine war is likely to drive geopolitical fragmentation and the emergence of blocs, in our view, BlackRock said in its report. Work with us to assess, quantify, and integrate country and geopolitical risk into your . In such discussions, its of utmost importance to make sure that all affected geographic regions are represented. Our geopolitical risk intelligence solutions provide end-to-end coverage of political, violent, sovereign, banking and investment risk worldwide. Thats one finding from the US National Intelligence Councils report Global Trends 2040: A more contested world. {"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. Whats their secret? Political risk consulting firms. 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. Boston Consulting Group is an Equal Opportunity Employer. Geopolitics, corporate governance and ESG. Geopolitical Risk – What Is It and How Can Companies Respond To It? 4 World Path Consulting San Francisco, CA Quick Apply Remote. 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. Geopolitical forces at work in the economy. Geopolitics is personal. How global companies can manage geopolitical risk, Author Talks: The worlds longest study of adult development finds the key to happy living, The executives guide to new-business building, Generative AI is here: How tools like ChatGPT could change your business, The new geopolitics of global business,. for broadcasters and publishers, Explore our tax and 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. Accurately forecast, quantify, and compare the financial viability of new investments and existing business activities by sector and project type, Bespoke Risk Scoring 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" : [ 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.. Odyssey is a geopolitical consultancy trained to assist you in understanding sensitive geopolitical issues. Some of these political consulting clients include: Airbnb. Whats more, the COVID-19 pandemic has brought geopolitical risk factors into sharp relief. 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. "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. Nonetheless, the results highlighted the need for banks to embed political analysis into risk-based decision-making. Related Expertise: Companies also have been attempting to measure the impact of their lobbying efforts on governments, such as by benchmarking the success of their advocacy compared with that of their industry peers or estimating potential cost savings. 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