Outlook and Strategic Recommendations
The impacts of climate change and AI on the global economy are tangible, yet difficult to forecast. Climate change will increase volatility in weather patterns, disrupting supply chains and agricultural production. At the same time, the transition to cleaner energy and the focus on reducing carbon emissions is expected to create job opportunities. With many advanced economies facing fiscal constraints, compounded by pressure to raise spending on defense, climate financing to support the energy transition becomes even more complex.
Investment in AI has fueled growth in technology exports, a bright spot in the otherwise struggling manufacturing sector. However, while AI can improve operational efficiency, its reliance on power-hungry data centers adds to emissions. Technological competition is also ramping up as countries race to develop AI, while also competing for solar, electric vehicles and batteries.
The future is uncertain. Dynamic risk planning and tech-enabled scenario tools are foundational for long-term leadership.
The global pandemic and ongoing trade negotiations have emphasized the need for intelligence analysts to have an accessible, shareable and holistic view of the factors shaping agendas and activity globally — whether by state or non-state actors. Geopolitical uncertainty is front of mind not just for political and security analysts but for decision-makers across departments. Together, they must understand how events will unfold, who the critical actors are and what the impacts are likely to be to set effective and proactive policy.
A national security team is charged with identifying, predicting and acting on today"s interconnected risk drivers. The team is using granular forecasts and location-specific risk analysis alongside geopolitical scenarios that connect security to wider political, economic and industry dynamics to provide a credible view of the evolving security risk environment.
S&P Global Market Intelligence’s proven model-based scenarios assist financial institutions and corporations with all aspects of design, development and quantification of macroeconomic and macro-financial variables necessary to measure risks, meet regulatory requirements and comply with accounting standards, such as Current Expected Credit Losses (CECL) and the International Financial Reporting Standard (IFRS 9). Proprietary climate scenarios and scenario expansion services are also available to support regulatory climate stress tests with full model transparency and expert support.
A large global manufacturing company wanted to identify emerging risks and changes to investment conditions in the many countries in which it operates. S&P Global Market Intelligence’s Country Risk Service for access to macroeconomic forecasts, country and sovereign risk scores and integrated daily intelligence for more than 200 countries. In-depth analysis of the investment environment by country helped them focus on six criteria: political context, economic performance, legal environment, tax regime, operational framework and security risks. Importantly, dedicated risk dashboards keep them up to date on the latest developments. Members of the strategic planning team turned to
Global Trade Analytics Forecasting decisions. complemented this with forward-looking trade intelligence. The offering provided bilateral trade forecasts between 248 countries and regions across all HS4 commodities and 16 key indicators (i.e., trade concepts), including containerized trade measured in container tons or TEUs. This enabled the team to size international markets and identify global business risks and opportunities to help make confident trade and transportation investment
Geopolitical & Trade Risk
Supply Chain & Third-Party Risks
Climate Risks
Credit & Market Risks
Asset Pricing & Valuations Risks
AI & Technology Risks
To move from reactive to initiative-taking risk management, firms need to undertake dynamic scenario planning that integrates numerous factors — including macroeconomic, supply chain, climate and technology risks — and outlines possible paths forward. Underpinning this needs to be an integrated, cross-functional data platform that brings together different risk domains, breaks down silos and encourages collaboration. With this in hand, it will be easier to identify impending shocks and adjust strategies to minimize disruptions.
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