In the past, corporations have had varying approaches to try to manage geopolitical risks. Some use advisors who provide insightful and in-depth country or topic analyses, others use management consulting services, and some seek insurance or risk transfer products. More recently, some use corporate diplomacy and sustainability best practices. A few use a combination of all of these.
Managing geopolitical risks can be challenging due to:
In some ways, managing these risks is similar to an advanced chess game. You often need to think several moves ahead, as well as laterally to be on the look-out for newly developing and impactful trends.
The risks used to be primarily caused by direct government actions such as:
These risks can, and do, still happen. However, geopolitical risks have become much more complex, frequent and impactful. We believe there is a change in underlying trends.
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