Geopolitical Risk: The Extra G - ESG²

Principles-based guidance for geopolitical risk oversight and its integration with ESG issues for boards, risk oversight committees and risk functions

 

Background

The benign political context in which many businesses globalised their market presence, supply chains and support services is disappearing. Organisations face an increasing variety of challenges from geo-economic competition between states and the emergence of an unstable geopolitical environment which increases the complexity of ESG decisions.

Preparedness

Organisations may lack the experience, capabilities and skills needed to manage geopolitical risk exposures and anticipate the ESG challenges these can create. Agile governance is key to addressing risks which are not easily quantifiable, increasingly non-linear and with wide-ranging first and second order business impacts.

Until now, comprehensive guidance to help companies and their boards address these complex issues has not existed.

The Extra G - ESG²

The Extra G - ESG² provides principles-based guidance. The guidance is designed to be used by boards, risk oversight committees, board committee members, heads of risk and risk functions. It is also relevant to senior executives in business units, and other control and assurance functions.

In preparing this guidance, The Risk Coalition has partnered with geopolitical risk management experts at GRI Strategies.

Why use the guidance? Key questions

Specialist understanding and monitoring of geopolitical and geo-economic issues tends not to feature as a central component of corporate strategy or risk management activity. The three key questions to consider are:

  • What internal capabilities do you need in your organisation to anticipate geopolitical risks and their impacts, and how should these be deployed within an organisation?

  • How can your company’s board ensure your organisation will remain resilient to potential external shocks?

  • Who in your organisation should have the leadership and oversight responsibilities in this critical area?

The guidance

The guidance is separated into Part A for risk oversight committees and Part B for risk functions. Whilst each stands alone, collectively they cover a total of 54 key issues that span accountability, risk culture, wider geopolitical risk management, and the integration of analytical capabilities and expertise with regard to geopolitical and related ESG issues in business planning.

The guidance is available by subscription.

Overview document

Further details can be obtained by downloading our Overview document. Please complete the following form:


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