{"id":11689,"date":"2025-07-10T09:00:00","date_gmt":"2025-07-10T07:00:00","guid":{"rendered":"https:\/\/escp.eu\/thechoice\/?p=11689"},"modified":"2025-07-10T10:25:41","modified_gmt":"2025-07-10T08:25:41","slug":"leading-through-the-fog-why-political-risk-is-now-everyones-business","status":"publish","type":"post","link":"https:\/\/escp.eu\/thechoice\/tomorrow-choices\/leading-through-the-fog-why-political-risk-is-now-everyones-business\/","title":{"rendered":"Leading through the fog: why political risk is now everyone\u2019s business"},"content":{"rendered":"\n

In an era defined by polycrisis \u2014 that is, a simultaneous and interlocking swarm of global disruptions \u2014 the comforting illusion of political stability has expired. For business leaders, this means that political risk can no longer be relegated to the back pages of boardroom slide decks<\/strong>. It has moved to the front, with a large font.<\/p>\n\n\n\n

That was the underlying message from a recent ESCP Geopolitics Institute <\/a>webinar, hosted under the quietly alarming title: Analysing Political Risk for Business in an Uncertain Geopolitical Landscape<\/em><\/a>. The event was moderated by ESCP professors Maxime Lefebvre and Vanessa Strauss-Kahn, co-directors of the ESCP Geopolitics Institute. <\/p>\n\n\n\n

It gathered three of the four editors of the Routledge<\/em> Handbook of Political Risk<\/em>, a 500-page diagnostic on how businesses can assess, absorb and potentially profit from the growing chaos.<\/p>\n\n\n\n

\n

It\u2019s clear that the global business environment is increasingly shaped by instability.<\/p>\nJulian Campisi<\/cite><\/blockquote>\n\n\n\n

Just in case: rethinking supply chains<\/strong><\/h2>\n\n\n\n

\u201cThis is something unprecedented,\u201d said Cecilia Emma Sottilotta, an assistant professor of political science at Italy\u2019s University for Foreigners of Perugia, referring to the evolving geopolitical context. \u201cWe are now entering a stage in which it\u2019s not anymore about diffused and diversified production chains, but it\u2019s actually about the resilience of economies<\/strong>. It\u2019s not about just-in-time anymore; it\u2019s about just in case.\u201d<\/p>\n\n\n\n

Sottilotta\u2019s remarks, laced with a kind of polite alarmism, reflect a hardening consensus. Political risk is no longer just about war zones or corrupt governments. With governments increasingly prone to sudden tariff spats, regulation-by-tweet, or outright institutional erosion, the global risk map is now all risk, no map.<\/p>\n\n\n\n

Indeed, political risk has expanded both vertically and horizontally. The dichotomy between macro and micro political risks has become nuanced<\/strong>, said Sottilotta. \u201cEven the big global crises, like COVID-19, actually may affect individual sectors, industries and even individual businesses within the same industry very differently.\u201d Even when two companies operate in the same country, the political risks they face can be entirely different.<\/p>\n\n\n\n

Forecasting the unpredictable<\/strong><\/h2>\n\n\n\n

Julian Campisi, assistant professor of political science at the University of Toronto \u2013 Scarborough in Canada, picked up the thread with a nod to a core question: how should businesses manage any of this? \u201cIt\u2019s clear that the global business environment is increasingly shaped by instability<\/strong>,\u201d he said. And it\u2019s become very difficult to predict what outcomes these crises will produce.<\/p>\n\n\n\n

Campisi pointed out that many of the risks now front of mind \u2014 cyber threats, export controls, regulatory appropriation, climate migration \u2014 are either uninsurable or very difficult to hedge. And while \u201cconfiscation, expropriation, nationalisation\u201d remain perennial concerns, they\u2019ve been joined by more opaque threats: the weakening rule of law in G7 countries, sudden populist backlashes, the rise of AI-enabled disinformation<\/a>. The implication? That political risk isn\u2019t just more widespread, but harder to quantify, insure or model.<\/p>\n\n\n\n

Yet Campisi remained pragmatic. \u201cBusiness leaders must adopt really proactive and flexible strategies to protect their operations, assets and reputations<\/strong>,\u201d he said. He suggested firms ask themselves hard questions: Do they have geopolitical scenario plans? Do they know if they\u2019re exposed to high-risk transit routes? Have they assessed their AI and cyber vulnerabilities? If not, they\u2019re probably overdue.<\/p>\n\n\n\n

\n

You need people, you need experts you really trust\u2026 who really know the context and can provide the sensitive insight that you need.<\/p>\nCecilia Emma Sottilotta<\/cite><\/blockquote>\n\n\n\n

The risk no index can see<\/strong><\/h2>\n\n\n\n

The practical end of the spectrum was represented by Hannes Meissner, managing partner at LM PRISK, a boutique consultancy in Austria. \u201cFrom a practical point of view,\u201d he said, \u201cwhat can you do?\u201d Meissner offered a three-tiered framework: geopolitical risk (global), country-level risk (regulatory, institutional) and informal risk \u2014 by which he meant state capture, systemic corruption and elite patronage networks. <\/p>\n\n\n\n

While software dashboards and risk indices still have their place, Meissner argued that truly understanding political risk means going off-script. \u201cYou really have to understand the context in which you want to do business<\/strong>,\u201d he said. \u201cYou have to understand who your partners are \u2014 and that has to take place with human intelligence methods.\u201d <\/p>\n\n\n\n

Messner\u2019s approach blends granular impact assessments \u2014 tracking how tariffs or sanctions hit supply chains, compliance and market access \u2014 with hard-nosed scenario planning.<\/p>\n\n\n\n

Human over machine<\/strong><\/h2>\n\n\n\n

While artificial intelligence can scan a region in seconds, its conclusions may be contradictory \u2014 or worse, confidently wrong<\/strong>. \u201cDifferent models will give you completely different answers,\u201d noted Sottilotta. \u201cWho tells you what\u2019s the truth, right?\u201d Her point was less about the limits of machine learning than about the rising value of judgment. \u201cYou need people, you need experts you really trust\u2026 who really know the context and can provide the sensitive insight that you need.\u201d In short: human intelligence isn\u2019t going away. It\u2019s becoming premium.<\/strong><\/p>\n\n\n\n

As for forecasting the future, Campisi was realistic. \u201cGeopolitical risks will be with us for some time,\u201d he said. \u201cEspecially given the fact that in the contemporary era, these political risks are very complex, interlinked and interdependent \u2014 and thus harder to predict.\u201d<\/p>\n\n\n\n

In other words: the fog isn\u2019t lifting. But for firms willing to invest in intelligent analysis, human sources and scenario planning, the path through it may just be navigable.<\/p>\n\n\n\n

Until, of course, the next war. Or election. Or algorithm.<\/p>\n\n\n\n

This article is based on a webinar organised by the ESCP Geopolitics Institute<\/a>. You can register here<\/a> to stay informed of other events and activities from the institute.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

From supply chains to cyber threats, today\u2019s political risks are interconnected, fast-moving \u2014 and increasingly local. Experts at ESCP argue that leadership now requires a new kind of foresight rooted in scenario thinking, not certainty.<\/p>\n","protected":false},"author":1,"featured_media":11688,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[14],"tags":[302,42],"class_list":["post-11689","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-tomorrow-choices","tag-geopolitics","tag-leadership","category-14","description-off"],"acf":[],"yoast_head":"\nWhy political risk is now everyone\u2019s business - The Choice by ESCP<\/title>\n<meta name=\"description\" content=\"Experts at ESCP argue that leadership now requires a new kind of foresight rooted in scenario thinking, not certainty, about political risk.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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