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      Geopolitics is increasingly impacting Australian business

      Geopolitical tensions should concern Australian business leaders just as much as they concern their global counterparts.

      Three risk scenarios present major challenges to Australian businesses in 2024-25. These scenarios are:

      • Crisis hits, we're not prepared
      • The death of truth and trust
      • Walls, moats, and stranger danger.

      About the report

      Top Risks to Australian Businesses 2024-25 outlines these geopolitical risk scenarios and offers guidance to help business leaders prepare both strategically and operationally for an increasingly volatile future.

      Download the report to read more.
       

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      Top Risks to Australian Business 2024-25

      What are the key geopolitical risks for business?
      Download

      Geopolitical risk scenarios for Australian businesses

      Three scenarios, each comprising interconnected and mutually reinforcing geopolitical risks, are of critical importance to the Australian business community.

      • Crisis hits, we're not prepared
        • There is an intersection among the risks of climate disasters, declining biodiversity, unpredictable energy markets, and unstable food security.
        • The combined impact of these risks highlights the gap between immediate actions to deliver short-term market demands and planning and long-term investment needed for sustainable resilience.
        • Businesses may not be prepared for the broad-ranging volatility ahead.
      • The death of truth and trust
        • Trust in public institutions is decreasing around the world. Businesses are increasingly being expected to fill the trust gap.
        • It's becoming increasingly difficult to decipher what is really true. This is being exacerbated by the proliferation of misinformation and disinformation.
      • Walls, moats, and stranger danger
        • There are contagion effects across the risks of deglobalisation, Australian national security and US politics and policy.
        • Combined, these geopolitical risk factors increase competition and drive countries away from open cooperation, and towards selective connections with 'like-minded' countries.

      What is the risk outlook for your industry?

      Find out the geopolitical risk and opportunity outlook for six key Australian industries.

      Scenario 1: Crisis hits, we're not prepared

      Outlook: There are moderate risks

      Scenario 2: The death of truth and trust

      Outlook: Active management is warranted

      Scenario 3: Walls, moats and stranger danger

      Outlook: Active management is warranted

      Scenario 1: Crisis hits, we're not prepared

      Outlook: There are critical risks

      Scenario 2: The death of truth and trust

      Outlook: There are critical risks

      Scenario 3: Walls, moats and stranger danger

      Outlook: Active management is warranted

      Scenario 1: Crisis hits, we're not prepared

      Outlook: There are critical risks

      Scenario 2: The death of truth and trust

      Outlook: Active management is warranted

      Scenario 3: Walls, moats and stranger danger

      Outlook: There are critical risks

      Scenario 1: Crisis hits, we're not prepared

      Outlook: There are critical risks

      Scenario 2: The death of truth and trust

      Outlook: There are critical risks

      Scenario 3: Walls, moats and stranger danger

      Outlook: Active management is warranted

      Scenario 1: Crisis hits, we're not prepared

      Outlook: There are critical risks

      Scenario 2: The death of truth and trust

      Outlook: There are critical risks

      Scenario 3: Walls, moats and stranger danger

      Outlook: There are critical risks

      Scenario 1: Crisis hits, we're not prepared

      Outlook: There are critical risks

      Scenario 2: The death of truth and trust

      Outlook: Active management is warranted

      Scenario 3: Walls, moats and stranger danger

      Outlook: There are moderate risks

      Responding to geopolitical risk scenarios

      The risk scenarios facing Australian businesses can seem overwhelming. However, practical steps can be taken to build resilience and maximise opportunities. The report features key questions to prompt Australian business leaders' thinking on how they can best respond.

      Download

      Top Risks to Australian Business 2024-25

      What are the key geopolitical risks for business?
      Download

      Key geopolitical implications for Australian businesses

      Deal Advisory, Detail of Arthur Ravenel Bridge in Charleston SC

      Sectoral differences

      • Exposure to geopolitical risk scenarios varies by sector.
      • Geopolitical volatility can create business opportunities if proactive strategies are established.

      Changing domestic regulations and compliance

      • Geopolitical competition is pushing governments to expand their definition of what counts as critical, and tighten regulations on businesses in those sectors.
      • Tightening regulations and increasing compliance requirements will mean businesses need to stay well-informed and agile.

      Diversification and strategic self-sufficiency

      • Global trade and investment flows are disrupted as countries move towards greater self-sufficiency and trade and investment based on shared values and trust.
      • No longer able to rely on traditional sources, businesses can adapt by diversifying supply chains or onshoring / friendshoring operations.

      Trust and reputation

      • People's trust in public institutions is eroding, and more expectations are being placed on business to fill the trust gap.
      • Businesses increasingly need to ensure their conduct and operations don't damage their reputation, with a focus on transparency, ethical conduct, and monitoring their suppliers.
      • Businesses also need to make sure building trust with one community segment does not undermine trust elsewhere.

      Why choose KPMG's geopolitical risk and strategy services?

      KPMG helps Australian businesses understand the impacts of geopolitical issues across all areas of their business and supports them to anticipate, adapt, and build resilience for strategic advantage. 

      Our expertise spans risk, trade, economics, operations and governance, supply chains, scenario modelling, and corporate strategy.

      Geopoliticals and business impacts

      • 93% of international firms suffered losses linked to political instability in 2023. 
      • Business leaders around the world rate geopolitics as their top concern.
      • Resilience to geopolitical risks doesn't mean predicting the future - it means knowing how to adapt.
      KPMG Australia Geopolitics hub

      Related insights

      Browse KPMG's insights and thought leadership below.

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      Contact KPMG's geopolitical team

      Merriden Varrall
      Dr Merriden Varrall

      Partner, Geopolitics Hub

      KPMG Australia

      Jon Berry
      Jon Berry

      Director, Geopolitics Hub

      KPMG Australia