Navigating Geopolitical Risk in a Fractured World

An interview with Tobias Wellner, Senior Analyst, Control Risks

In a global landscape marked by geopolitical tension, regulatory fragmentation and increasingly fragile supply chains, businesses face risks that are more complex – and more consequential – than ever. To explore how organisations can navigate this uncertainty, we spoke with Tobias Wellner, a Senior Analyst at global specialist risk consultancy Control Risks.

Based in Berlin, Tobias focuses on geopolitics, sanctions, and trade restrictions, drawing on insights from Control Risks’ network of more than 90 analysts worldwide. His perspective is shaped not only by years advising multinational companies, but also by his earlier work in humanitarian aid and peacebuilding – including time spent on the frontlines of the South Sudan conflict – experience that continues to inform his approach to understanding and managing risk today.

When we speak of geopolitical risk, which issues should business leaders pay most attention to in today’s environment?

Tobias: I see two overarching trends that will shape global business more than anything else. The first is the growth in regulatory complexity. We’re seeing a revival of industrial policy and growing interventionism by governments, particularly in strategic sectors such as tech, defence and renewables. The competition between the US and China is the biggest driver of this: sanctions, tariffs, export controls are being implemented more and more by both sides. Just recently, China expanded export controls on rare earth technologies, and the US expanded its export restriction toolkit. A trade war truce agreed in October will remain fragile, with both sides remaining committed to longer term strategic competition. Their trade restriction measures (often masked as protective actions) will ripple through global supply chains, creating enormous challenges for compliance teams. Companies will need stronger internal capabilities in sanctions, trade controls and regulatory analysis. And this isn’t just about the US and China. As a result of increasing global complexities, we are seeing the rise of the so-called Middle Powers: countries like Mexico, Brazil, the UAE, Saudi Arabia, Türkiye, South Africa, Vietnam and Indonesia. These countries are really stepping up their own regulatory regimes to bolster the growth of their economies.

The second trend is the rising disregard for territorial integrity. We are going to see even more regional conflicts. This will have obvious impacts for companies going forward, increasing particularly operational and security risks. Companies will have to make sure their people are safe during war incidents, or how to travel safely, and manage security incidents. Not only will supply chains be impacted, but there will also be greater reputational risks. Employees, investors and the wider society will expect businesses to take clearer stances on conflicts and political issues.

How should companies balance the tension between needing to take bold strategic bets in uncertain times and the urge to be overly cautious?

Tobias: There’s no clear-cut answer to this formula, but there are a few aspects to consider. First, business decision-makers need a really good inflow of geopolitical risk analysis, rather than today’s newspaper headlines. We often work with companies to develop geopolitical scenarios – each with clear assumptions, indicators and triggers. We are transitioning towards a much more fragmented and flexible trade system, one that’s defined by the diversification of global supply chains. The companies that are going to survive are the ones that can operate across diverging regulatory frameworks and remain agile amidst a growing number of conflicts and regulatory pressures – while finding a balance between cautious and strategic decision-making.

Second, companies must move from reactive crisis management to embedded resilience. In practice, this means accepting that volatility is normal rather than exceptional. The shift from ‘just in time’ to ‘just in case’ is real. However, this brings its own risks: if volatility is normalised, then everything is a potential crisis. This, in turn, makes a company’s ability to prioritise, plan and innovate much more difficult.

Geopolitical risks and the supply chain – how effective or sustainable are strategies like near-shoring, friend-shoring, and supply chain decoupling?

Tobias: Few companies have the ability or willingness to completely decouple for certain markets, such as China. What we see instead is diversification; a mix of near-shoring and friend-shoring combined with multi-route, multi-supplier strategies. After years of disruptions – the pandemic, the war in Ukraine, the Gaza conflict, tariff wars – companies and governments are now pricing in volatility. Supply chain disruptions, extreme weather events, or new tariffs are no longer surprises. They are part of the new operating reality.

How can companies sift out the important information in all the noise of this unpredictable world?

Tobias: There are a lot of headlines, a lot of noise. Everyone is bombarded with this. You need to listen to the noise, but you also need to learn how to identify the underlying music – the patterns and drivers that matter for your business. Scenario analysis helps. Strong internal compliance teams help. Partnerships with local stakeholders help. But above all, you need a disciplined process for connecting geopolitical developments to business decisions.

What shifts in the geopolitical order will most shape global business over the next 5–10 years?

Tobias: Three stand out.

The first is a more complex, loosely multipolar system. The US is retreating in some areas; China is recalibrating its global engagement; and many regional powers are becoming more assertive. International organisations like the UN will still matter, but mostly as diplomatic forums – not as strong rule-setters. Expect more bilateral deals and regional blocs.

The second is a key defining threat, one that we've been talking about for a very long time: climate change. The world in general is just not ready for the fast-paced changes that will come our way from a climate change perspective. I think everyone – companies and societies – should expect much more supply chain disruptions and supply chain shifting because of climate-induced disruptions. Especially, but not exclusively, in emerging markets.

And third – on a personal level, I am quite worried about democratic backsliding. This is not just for my own love of democracy, but also from a business point of view. Democratic processes such as elections, institutions, regulatory processes: if these are not transparent anymore, this will disrupt the equal playing field. And that will be harmful for the economy at large.

But there is good news too: countries in the Global South are really accelerating the diversification of their trade and foreign relations. This is a response to geopolitical volatility; these countries want to move away from dependence on just the US market, just the EU or China. We will see many more trade links such as the new trade deals between Mexico and Brazil, Vietnam’s outreach to the Global South, or the Gulf States’ massive investments in Africa. This will create opportunities for companies to benefit from these increasing south-south trade corridors.

How does your experience in humanitarian aid, conflict analysis and peacebuilding connect with business-focused geopolitical risk?

Tobias: I think there are two lessons from the humanitarian world that matter enormously for business. First: local conflict analysis. When you operate in a war zone, understanding your environment is a matter of survival. That same principle applies to global companies. If you don’t truly understand the political, social and security dynamics in the places you operate, you expose your business, your people, and your reputation to unnecessary risk.

Second: humanitarian organisations understand that risk can’t be avoided; it can only be managed. For example, my current employer is called Control Risks, not Avoid Risks. The humanitarian sector takes calculated risks based on in-depth situational knowledge. That’s a skill businesses increasingly need.

There’s also a deeper connection: peacebuilding strengthens the security environment on which all economic activity depends. And practically, humanitarians often have the best local networks – government, civil society and community leaders. Companies planning new operations can benefit enormously from these local perspectives.

If you could offer CEOs one piece of geopolitical advice, what would it be?

Tobias: The global operating environment is going to remain unstable and geopolitics won’t become simpler. We are in a transition to a more fragmented, flexible and conflict-prone world. Invest in understanding your operating environment, building strategies for agility, not stability.

Control Risks | Global Risk Consultancy