INTRODUCTION
From episodic shocks to embedded risk
Geopolitical instability has long been a feature of the global economy. Periods of conflict, political tension, and shifts in state behaviour have shaped the operating environment for multinational organisations. For the most part, however, these threats have been treated as episodic: event-driven, geographically contained, and often external to core business strategy. Their effects, while sometimes severe, were typically limited to defined regions or timeframes.
In recent years, that position has shifted. Geopolitical risk is no longer defined by isolated events but exerts a persistent influence on how organisations operate. It increasingly shapes decisions on where to invest, how supply chains are configured, and how workforces are deployed. In doing so, it challenges the fundamental assumptions of stability, access, and continuity on which global business models are built.
This shift has been reinforced by recent events; the first major land war in Europe since WWII, intensified tensions between major powers, and regional flashpoints in the Middle East and Asia have underscored the potential for conflict to spread or escalate. Alongside this, the growing use of cyber-attacks, sanctions, and proxy actors has altered how geopolitical pressure is applied. These developments point to a form of risk that is increasingly ambiguous, and more likely to intersect with business activity in unpredictable ways.
At the same time, the structural foundations of global commerce have remained largely intact. Organisations continue to operate across geographies, with business models that depend heavily upon international supply chains. In this context, disruption rarely remains contained. Events often manifest through familiar impacts such as interruption, delay, or financial stress, blurring the distinction between geopolitical and operational risk. For organisations, this makes visibility into how disruption travels – and where it is most likely to be felt – a critical capability, not a secondary consideration.
Taken together, these developments point to a shift in how geopolitical risk must be understood and managed. It is no longer sufficient for organisations to treat disruption as a background condition or external constraint. Instead, it must be viewed as a dynamic force that interacts with, and often defines, core aspects of organisational risk.
In the sections that follow, this report traces the outline of a threat that spans physical damage, supply chain disruption, cybersecurity, and credit and liquidity exposures. It also considers the implications of geopolitical risk for people – including both employees on the ground, and those with the formidable task of guiding their organisation through these increasingly unpredictable times. In doing so, it aims to help organisations better understand how geopolitical risk manifests across their operations, and how its effects can be managed in practice.