In an era defined by polycrisis — that is, a simultaneous and interlocking swarm of global disruptions — 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. It has moved to the front, with a large font.
That was the underlying message from a recent ESCP Geopolitics Institute webinar, hosted under the quietly alarming title: Analysing Political Risk for Business in an Uncertain Geopolitical Landscape. The event was moderated by ESCP professors Maxime Lefebvre and Vanessa Strauss-Kahn, co-directors of the ESCP Geopolitics Institute.
It gathered three of the four editors of the Routledge Handbook of Political Risk, a 500-page diagnostic on how businesses can assess, absorb and potentially profit from the growing chaos.
It’s clear that the global business environment is increasingly shaped by instability.
Julian Campisi
Just in case: rethinking supply chains
“This is something unprecedented,” said Cecilia Emma Sottilotta, an assistant professor of political science at Italy’s University for Foreigners of Perugia, referring to the evolving geopolitical context. “We are now entering a stage in which it’s not anymore about diffused and diversified production chains, but it’s actually about the resilience of economies. It’s not about just-in-time anymore; it’s about just in case.”
Sottilotta’s 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.
Indeed, political risk has expanded both vertically and horizontally. The dichotomy between macro and micro political risks has become nuanced, said Sottilotta. “Even the big global crises, like COVID-19, actually may affect individual sectors, industries and even individual businesses within the same industry very differently.” Even when two companies operate in the same country, the political risks they face can be entirely different.
Forecasting the unpredictable
Julian Campisi, assistant professor of political science at the University of Toronto – Scarborough in Canada, picked up the thread with a nod to a core question: how should businesses manage any of this? “It’s clear that the global business environment is increasingly shaped by instability,” he said. And it’s become very difficult to predict what outcomes these crises will produce.
Campisi pointed out that many of the risks now front of mind — cyber threats, export controls, regulatory appropriation, climate migration — are either uninsurable or very difficult to hedge. And while “confiscation, expropriation, nationalisation” remain perennial concerns, they’ve been joined by more opaque threats: the weakening rule of law in G7 countries, sudden populist backlashes, the rise of AI-enabled disinformation. The implication? That political risk isn’t just more widespread, but harder to quantify, insure or model.
Yet Campisi remained pragmatic. “Business leaders must adopt really proactive and flexible strategies to protect their operations, assets and reputations,” he said. He suggested firms ask themselves hard questions: Do they have geopolitical scenario plans? Do they know if they’re exposed to high-risk transit routes? Have they assessed their AI and cyber vulnerabilities? If not, they’re probably overdue.
You need people, you need experts you really trust… who really know the context and can provide the sensitive insight that you need.
Cecilia Emma Sottilotta
The risk no index can see
The practical end of the spectrum was represented by Hannes Meissner, managing partner at LM PRISK, a boutique consultancy in Austria. “From a practical point of view,” he said, “what can you do?” Meissner offered a three-tiered framework: geopolitical risk (global), country-level risk (regulatory, institutional) and informal risk — by which he meant state capture, systemic corruption and elite patronage networks.
While software dashboards and risk indices still have their place, Meissner argued that truly understanding political risk means going off-script. “You really have to understand the context in which you want to do business,” he said. “You have to understand who your partners are — and that has to take place with human intelligence methods.”
Messner’s approach blends granular impact assessments — tracking how tariffs or sanctions hit supply chains, compliance and market access — with hard-nosed scenario planning.
Human over machine
While artificial intelligence can scan a region in seconds, its conclusions may be contradictory — or worse, confidently wrong. “Different models will give you completely different answers,” noted Sottilotta. “Who tells you what’s the truth, right?” Her point was less about the limits of machine learning than about the rising value of judgment. “You need people, you need experts you really trust… who really know the context and can provide the sensitive insight that you need.” In short: human intelligence isn’t going away. It’s becoming premium.
As for forecasting the future, Campisi was realistic. “Geopolitical risks will be with us for some time,” he said. “Especially given the fact that in the contemporary era, these political risks are very complex, interlinked and interdependent — and thus harder to predict.”
In other words: the fog isn’t lifting. But for firms willing to invest in intelligent analysis, human sources and scenario planning, the path through it may just be navigable.
Until, of course, the next war. Or election. Or algorithm.
This article is based on a webinar organised by the ESCP Geopolitics Institute. You can register here to stay informed of other events and activities from the institute.