In response to the arrest of Ovidio Guzman, son of El Chapo, in early January, cartel violence has escalated in the Mexican states of Sinaloa and Chihuahua, the latter of which shares a 500-mile border with the United States. The resulting shoutouts, blockades and car-jackings have left U.S. companies in the region scrambling to protect their people and assets. Mexico is a vital economic partner, as its total goods and services trade with the U.S. exceeds $675 billion each year and U.S. companies are poised to invest $40 billion in Mexico over the next two years. As a result, long-term instability along the southern border will have massive business implications for the U.S.

In 2023, companies will reckon with a multidimensional portfolio of geopolitical risks—not just here in North America but around the world. For chief security officers, human resources professionals and anyone responsible for keeping people safe and productive as they move or operate across borders, geopolitics matters now more than ever. As companies prepare their budgets and assess their operational capabilities for the upcoming year, it is critical that corporate leaders are acutely aware of the risks that could affect their businesses and employees.

The war in Ukraine was a wake-up call as to how entire industries can unravel in response to a geopolitical crisis. It also highlighted the need for U.S. companies to invest in contingency or emergency plans as part of their duty of care responsibilities, as numerous enterprises with ties to Eastern Europe experienced disruption and threats to safety as a consequence of the war. Travel managers were among those pressed into service at the beginning of Russia’s invasion, and many didn’t have efficient evacuation or contingency plans.

To that end, preparation must be the top priority for chief security officers and human resources professionals—and business travel managers could have an important role. An even more destructive regional conflict could emerge on the other side of the globe within just a few short years.  

China has adopted an increasingly belligerent stance towards Taiwan as part of its “reunification” efforts. A conflict in the Indo-Pacific would be a battle for naval and aerial supremacy, rendering the oceans and skies unreliable for evacuations or emergency transport. Unlike Europe, where people could be evacuated through land routes to Poland, an island cut off by the Chinese navy would present far greater complications for companies attempting to move people and assets.

As business travel returns to pre-pandemic levels, companies should take greater care to ensure that employees traveling in high-risk regions are protected. In the event of conflict, civil unrest, or even travel disruptions like strikes or storms, companies should have the appropriate contingency and emergency evacuation protocols in place to transport their employees to safety. That protection should include digital platforms which alert traveling employees about risks in real-time and offer constant communication to better guarantee their safety.

For companies with a global presence, it is clear that geopolitics or civil unrest in a host country cannot just be written off. Even companies that only operate in the domestic space should be considering the impact of international politics as it relates to economic concerns.    

It is critical that companies are well attuned to their government’s international posture and how it manages relationships with other countries. Actions such as tariffs and non-tariff measures (including sanctions), diplomatic spats, and travel restrictions can have second- or third-order effects on domestic operations. 

The ongoing tensions between the U.S. and great power competitors like China and Russia, as well as other adversarial states like Iran, have also created concerns for U.S. companies regarding the threat of retaliation. Given our reliance on technology and digital infrastructure in today’s business environment, hostile nation-states have been targeting U.S. companies with cyberattacks that can compromise sensitive information and damage a company’s reputation.  

One emerging threat vector is the risk of businesspeople or employees being targeted by acts of violence or kidnapping. Kidnapping poses an especially acute threat in Latin America but this risk can be mitigated with proper security measures.  

Whether a company is exporting goods across the southern border or sending business travelers into Europe or Asia, corporate leaders need to be thinking about the worst-case scenario and what the downstream effects are for their business and employees. As companies turn the page to a new year, anticipating the worst and preparing for it will be the most crucial step to mitigating geopolitical risk.