This sentiment largely continued in the second . Boston Consulting Group is an Equal Opportunity Employer. Some may, for commercial and strategic reasons, choose to strengthen ties to the countries where the companies are based. CFOs' assessments of the economy in Q3. In 2017, violence erupted in parts of Ethiopia as certain ethnic groups demonstrated against government discrimination. The businesss board can apply a materiality test to pinpoint what it should dedicate time to discussing. "arrows": false, One way to initiate a more strategic approach is by assessing the risks that matter the most to a business. FS firms need to be agile and resilient to thrive. Large US banks were not alone in underestimating the determination of Russian president Vladimir Putin to ignite the biggest European conflict since World War II. Odyssey is a geopolitical consultancy trained to assist you in understanding sensitive geopolitical issues. Most companies do not have a dedicated team of full-time employees devoted to geopolitical risk management. 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. iStrategic LLC is a Political Risk Analysis and Consulting firm specializing in the Middle East and North Africa region. An escalation of geopolitical events can lead to outright wars . No matter their starting point, BCG can help. But the discussions often focus on a specific investment, project, or market entry or exit. Our privacy policy describes how your data will be processed. The firm's new geopolitical advisory team is being launched as multinational corporations grapple with volatile events around the world, from Russia's invasion of Ukraine to simmering tensions. Consider the trade-offs of framing how the company talks about itself, if that narrative could create conflicts with stakeholders, and what the potential remedies could be. Eurasia Group analysts leverage deep country and thematic expertise with quantitative methodologies to forecast fast-moving risks and opportunities. 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. Today, we work closely with clients to embrace a transformational approach aimed at benefiting all stakeholdersempowering organizations to grow, build sustainable competitive advantage, and drive positive societal impact. The Geopolitical Analyst (remote) will work closely with our teams to support research and analytical duty upon clients' needs. Marcin Grajewski, The EU strategic autonomy debate: What think tanks are thinking, European Parliament Think Tank, March 30, 2021, europarl.europa.eu. All rights reserved. Amid such a complex landscape, boards and corporate leaders should evaluate the many economic and other factors that may be important to their companies' strategies, investments, and growth objectives. And differences can dissolve into disagreements about risk and Case Study 1 Thats one finding from the US National Intelligence Councils report Global Trends 2040: A more contested world. 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. The other stream is to work for such client companies directly, in an "in-house" role - i.e. Andrew Cuomo, Governor (NY) Bill & Melinda Gates Foundation. Create a system for collecting, processing, and disseminating risk signals with a variety of time horizons or purposes across the organization, supplemented by input from external agencies and advisors. 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. Failing to adequately consider risk limitations and allocations when drafting integrated project contracts can result in the unintended consequence of your firm paying for the errors or omissions of your subconsultants. 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. Geopolitical Intelligence Group: Staying Ahead with Intelligence Servicesit. Deglobalization is poised to accelerate amid knock-on effects of Russias increased isolation from the global economy, ongoing sanctions and export controls, and the accompanying emphasis on self-reliance and the diversifying supply chains.. Geopolitics is personal. Never miss an insight. A sports industry client was exploring hosting a large televised event in a Middle Eastern city. Discussions can focus on three risk areas: brand and reputation; operational issues, such as cybersecurity strategy; and products, services, and partnerships. Geopolitical risk is the number one global corporate risk. Please feel free contact with us if you have any further questions or concerns, Level 1, 102 Bennelong Parkway, Conduct time-efficient international policy monitoring and updates. Geopolitics, corporate governance and ESG. Our intelligence-led approach to risk forecasting, and our global all-source open source intelligence infrastructure delivers the data and insights you need to mitigate geopolitical risks and seize opportunities. 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. Citi. The output of this study has implications for portfolio construction and risk management as well as sensible business and governmental practice. 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. Integrated solutions - consulting, risk management and broking - to help organizations prevent and protect against interlinked geopolitical risks. Many company boards already deliberate geopolitical risks to one degree or another. Get the latest news and intelligence on global issues impacting business, politics, economics, military, security and energy. The ability to proactively navigate turbulence can mean the difference between prospering through a crisis or falling victim. Prudent geopolitical risk management also requires understanding how to deal with issues that cross borders. Understand how geopolitical trends impact your business We help organisations understand the complex issues defining international business, geopolitics and cross-border regulation so they can better anticipate change, identify opportunities, manage risks and ultimately shape the future of their organisation. Sign in with your username. Political Risk Consultancy We are specialists in providing economic and political risk consultancy. Build a geopolitical risk management center of expertise or a network that unites employees across the organization to share expertise and best practices and to ensure collaboration. A holistic view uses four lenses: global geopolitical trends and scenarios, ongoing operations, investment decision making, and frequent monitoring of evolving events and development that can affect the business. Economic uncertainty (32%) and inflation (26%) are among the leading factors underlying supply chain risks. (See Exhibit 2.). 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. We provide customized information services, including strategic&competitive intelligence, market research, risk management and industrial analysis. In this context, the word investment can refer to anything from purchasing shares of a company to trying to sell . Examine local perceptions of foreign operators, Provide a granular understanding of industry stakeholders and their relations with key domestic, government and international actors, Provide intelligence, analysis and insight into various security threats facing the clients people, assets and operations, Evaluate the preservation of human rights, with a focus on freedom of speech, treatment of women and the LGBT community, and discrimination of ethnic or religious minorities. The client was exploring the feasibility of moving people and equipment to several Turkish ports and was concerned about the impact of political volatility, crime and corruption on their operations. Enter your username or email to reset your password. Sign up to receive periodic news, reports, and invitations from Kroll. 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. It could also apply the system to the entities with which it does business, separating those with which a local office can work without needing additional approval from those that need risk approval and those with which an office should never work with. Industries that are positively exposed to geopolitical risks suffer a decline in investment that is larger than the aggregate effect. In such discussions, its of utmost importance to make sure that all affected geographic regions are represented. For many companies, the strategic competition between China and the United States will top the list of standing risk issues to discuss. Such external pressures exert other internal pressures on corporate leaders. Violence and Civil Unrest However, it added, only a subset of chief risk officers (CROs) recognize this.. 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. In extreme cases, a disruptive event can jeopardize an entire business. The new geopolitics of global business, Economist, June 5, 2021, economist.com. They could seek information or direction from embassies, international financial institutions, nongovernmental organizations, and peer organizations. Integrate geopolitical signals and risk assessment into strategic-planning processes and define actionable strategies to both protect the business and take advantage of emerging opportunities. Considered among the world's foremost experts in their respective subject areas, our analysts provide tailored support to the world's top investors, executives . Geopolitical shifts and technology changes are transforming international trade, creating both risks and opportunities for companies that can navigate this new environment. Its up to leaders to weave the fabric of a global organization so that it resists the tears that mounting pressures threaten to create. Leverage deep country and thematic expertise geopolitical risk consulting quantitative methodologies to forecast fast-moving risks and opportunities companies!, BCG can help that can navigate this new environment data will be processed East North. 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