Top Risks Forecast

2 min read

In our latest CEO Outlook survey, most global CEOs named geopolitics and political uncertainty the top threats to organizational growth.

For several decades, businesses reacted to geopolitical changes instead of actively anticipating them. As geopolitical turbulence grows and alliances shift, leaders need to anticipate and respond proactively, rather than reactively, to geopolitical events.

Eurasia Group releases a report each year forecasting potential geopolitical risks that may play out over the upcoming year. Our report assesses the relationship between these potential risks and broader geopolitical trends and their potential impact on global business.

Top risks forecast 2025
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      Top risks

      In our report analysis, we have identified three critical trends for businesses, which we call 'bottom lines':

      Trade policy restrictions



      Global trade and investment patterns are shifting. The future of supply chains and economic integration are becoming more dependent on national security priorities and increased policy interventions.
       

      Vulnerability calls for operational resilience


      Conflict escalation is now the norm, as historical collective security arrangements have been disrupted by a lack of global leadership. Despite this reality, few corporations have implemented resilience strategies.

      AI governance gaps



      The global regulatory environment for emerging technology is growing more complex and fragmented, meaning businesses will have to spend more time, money and effort steering their companies through uncharted waters.

       

      KPMG
      sector FPI

      US
      election

      Middle
      East crisis

      No
      diplomatic solution in Ukraine

      Ungoverned AI

      Axis of
      rogue
      states

      China’s
      slower
      growth**

      Fight for critical minerals

      Persistent global economic headwinds

      El Nino and extreme weather events

      Corporate culture
      wars
      Energy & Natural
      Resources      		 84.39
      Financial Services 89.97
      Government N/A
      Infrastructure 89.41
      Industrial Manufacturing 94.26
      Technology, Media and
      Telecom      		 92.88
      Consumer & Retail 93.87
      KPMG
      FPI score*      		 Limited
      impact      		 Moderate
      impact      		 High
      alert

      *KPMG Financial Performance Index (FPI) measures the financial health of individual companies. It is based on an initial pool of more than 40,000 companies globally and identifies those companies, sectors, regions, countries, and territories that are performing well and those that are underperforming. FPI scores range from 0 to 100, with 100 representing the highest and most favorable score.

      **The risk is about the major role that the Chinese economy has played over the last 15 years in driving global economic growth and how slower Chinese growth rates going forward might have an important impact on global growth prospects. Over the past decade and a half, China has been a major driver of the world’s economic growth, accounting for 35 percent of global nominal GDP growth.

      heatmap
      ×

      KPMG
      sector FPI

      US
      election

      Middle
      East crisis

      No
      diplomatic solution in Ukraine

      Ungoverned AI

      Axis of
      rogue
      states

      China’s
      slower
      growth**

      Fight for critical minerals

      Persistent global economic headwinds

      El Nino and extreme weather events

      Corporate culture
      wars
      Consumer & Retail 93.87
      Energy & Natural
      Resources      		 84.39
      Financial Services 89.97
      Government N/A
      Infrastructure 89.41
      Industrial Manufacturing 94.26
      Technology, Media and
      Telecom      		 92.88
      KPMG
      FPI score*      		 Limited
      impact      		 Moderate
      impact      		 High
      alert

      *KPMG Financial Performance Index (FPI) measures the financial health of individual companies. It is based on an initial pool of more than 40,000 companies globally and identifies those companies, sectors, regions, countries, and territories that are performing well and those that are underperforming. FPI scores range from 0 to 100, with 100 representing the highest and most favorable score.

      **The risk is about the major role that the Chinese economy has played over the last 15 years in driving global economic growth and how slower Chinese growth rates going forward might have an important impact on global growth prospects. Over the past decade and a half, China has been a major driver of the world’s economic growth, accounting for 35 percent of global nominal GDP growth.

      Download CFO agenda for elevating finance report

      Top risks forecasts

      Bottom lines for business in 2024 and beyond.

      Download the full report (PDF 2.42MB)

      What can business leaders do?

      The world has become a much more geopolitically complex place, and these complexities are only expected to grow. Business leaders need to focus on building strategies and frameworks that take their geopolitical response from reactive to proactive, including developing holistic geopolitical risk management approaches.

      There are five steps business leaders can start to take today:

      1. Use dynamic risk assessment to prioritize and quantify risk
        Geopolitical risks rarely exist in isolation. It is crucial for companies to consider the interconnectedness of risks within their operations, supply chains and broader ecosystem.
      2. Visualize your supply chain exposure
        Supply chains are now influenced by a trade policy that forces businesses toward
        new trading partners at a time when cyber and geopolitical exposure are increasing. Mitigating these risks requires a multifaceted approach.
      3. Integrate trusted AI into your business
        Companies need to harness the power of AI and accelerate thoughtful adoption while recognizing the potential risks. AI strategies should be firmly rooted in ethical conduct and responsible practices.
      4. Drive sustainable innovation to prevent disruptive regulation
        In today’s increasingly disruptive world of climate disasters, political conflict and societal inequalities, rapid ESG progress is crucial to achieving a more sustainable future. Leaders can use the power of ESG to transform their businesses.
      5. Develop a comprehensive public engagement strategy
        Business leaders are increasingly pressured to take public positions on social and political issues such as polarizing conflicts, gender issues and net zero targets. Companies need a framework to decide when and how to communicate publicly on social and political issues.

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      Mohammad Abudalo blog posts
      Mohammad Abudalo
      Advisory Leader
      KPMG in Jordan
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