Some 47% of firms have experienced a political risk loss in excess of $50m and 96% said they have invested in political risk management capabilities.

More than two-thirds of firms have reported supply chain disruptions relating to geopolitics.   Some cited that they have invested in new political risk management capabilities this year, including enhancement of corporate processes and creation of cross-functional teams.

State-sponsored supply chain disruption appears as one of the main business concerns for 2024 and ‘grey zone aggression’, partly as a result of disruptions in the Red Sea.

‘Grey zone’ refers to action used to weaken a country by any means short of war and has reached the top 10 risks (see table below) for the year for the first time.

Other findings included:

  • 47% experienced a political risk loss in excess of $50m
  • The escalations resulting from the conflict in Gaza have had less of a financial impact than the conflict in Ukraine: 4% reported a material negative financial impact for Gaza vs 20% for Ukraine.
  • Trends toward geostrategic competition and populism are expected to “strengthen”
  • With the US heading into elections, 64% reported concern about political risk in North America – the same proportion as reported concern about political risk in Asia.

After a couple of challenging years companies seem to have accepted that significant political risk losses are the new normal and are working on building risk management capabilities.

As one oil industry executive cited “political risk is acknowledged, but it does not deter operations”, adding that “it is viewed as a factor to be managed within our broader risk management framework”.

Of particular concern were infrastructure attacks, like sabotage of pipelines and cables. In addition, assets in international waters are being targeted because they can be struck without inviting retaliation.”

The wide dissemination of drone technology has made such remote attacks much easier. One European energy executive shared that they “are facing hybrid or gray zone threats due to the Ukraine war – incidents of sabotage like the Nord Stream attacks or cyberattacks, that leave perpetrators with plausible deniability”.

The conflict in Ukraine maintains its position as the top risk of the year, followed by concerns about elections.

With more citizens voting in 2024 than at any time in the next few decades across several countries, managing political uncertainty and potential business repercussions was identified as a significant challenge. In addition concerns about trade wars, rising protectionism and populism.

Top Risks 2024
1Ukraine complications and escalation
2Year of elections
3US-China rivalry
4Uncertain climate policy
5Mismanaging China risk
6Middle East escalation
7The next big conflict
8Home-market growth slowdown
9Institutional decay
10Gray zone action

The survey and interviews, conducted in March and April 2024 by Oxford Analytica, are based on responses received from 50 companies around the world, of which 64% have revenues in excess of $1 billion.