Geopolitical risks and cost of living threaten productivity in 2023: International SOS
Political tensions likely to spread beyond Russia-Ukraine
Organisations have been put into ‘perma-crisis’ mode with global risks from geopolitics to the cost of living threatening productivity going into 2023, says International SOS.
Publishing its Risk Outlook 2023 and updated global risk map, International SOS says businesses across the world face significant risks and greater challenges in protecting employees working in or travelling to countries with elevated threat levels.
The report, which includes the findings of a survey of 1,200 senior risk professionals across 108 countries, reveals almost half of experts at 48% predict cost-of-living pressures will be a major driver of productivity loss domestically during the next 12 months. It also reveals 42% of experts predict business travellers will be less productive because of geopolitical risks in 2023, and 33% see civil unrest impacting business travel.
Adjusting to perma-crisis mode requires more support and training for crisis management teams, which risk burnout, the report says.
“Experts have drawn attention to significantly high levels of crisis management fatigue. Managing crisis management fatigue is key in moving from perma-crisis to crisis resilience, and organisations that effectively embedded learnings from the last two years will emerge with more robust capabilities to manage challenges,” International SOS explains.
International SOS says Russia’s invasion of Ukraine this year put geopolitics firmly back on the corporate risk agenda. But in 2023, International SOS says it expects geopolitical volatility to spread beyond Russia-Ukraine as tensions increase between Russia and the west, and competition plays out between the US and China.
“Best practice for organisations is to consistently revisit the likelihood and possible impact to understand potential implications for their business and people,” advises International SOS.
Social unrest will also be a major item on the c-suite agenda in 2023, International SOS says, affecting organisations and employees in multiple ways and from multiple causes. Volatility in energy and agricultural markets will drive unrest, particularly in more fragile economies, and is most likely to occur in sub-Saharan Africa, Egypt and Lebanon, International SOS says. Public dissatisfaction with government progress on key economic and political issues is most likely to drive social unrest and violence in Pakistan, Sri Lanka, Ecuador, Peru and Iraq, while the US and western Europe are the most likely regions to see social unrest triggered by global and domestic polarisation.
Sally Llewellyn, global security director of International SOS, says: “The drivers for unrest will be numerous in 2023 and accounting for the impact of social unrest is going to be a key task for businesses in 2023.
“Mitigation starts with understanding the risk environments in which organisations operate, drivers of unrest and most likely impacts on employees and operations. This can also help businesses to ensure they have the right early warning systems in place, understand the potential triggers and what kind of organisational response is needed to counter any security issues. Education is also key. Employees and decision makers need to be knowledgeable about risks and the steps their organisation is taking to mitigate them and keep the workforce safe.”
Listing five trends for the year ahead, International SOS predicts a new era for mental health at work, more support for the travelling workforce, greater use of accurate and timely intelligence in decision-making, alongside adjusting to the perma-crisis and increasing health risks from climate change and other factors.
International SOS warns the impact of climate change could reach beyond extreme weather events. In particular, changes in climate could accelerate the emergence of infectious diseases, which International SOS says is on the radar for just 25% of organisations planning for future pandemics.