Oct 10, 2023 - Economy

Geopolitical tensions weigh on global companies

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Illustration: Sarah Grillo/Axios

Geopolitical risks are weighing heavier on business leaders than ever before.

Why it matters: Companies are not only worried about being able to operate during crises, but also about employee safety as remote work and flexibility create a greater number of potentially dangerous scenarios.

Driving the news: Travel companies including Delta, Royal Caribbean and IHG Hotels & Resorts have temporarily canceled Tel Aviv flights, adjusted routes or increased their security measures following the surprise Hamas attack on Israel, Reuters reports.

  • Big U.S. banks with employees in the country are asking workers to remain at home, according to Reuters.
  • UPS had temporarily suspended flights in and out of Israel, while FedEx said it was resuming service today in consultation with local authorities and only where "safe and possible."

The big picture: Geopolitical tensions were flagged as the top risk to the global economy over the next two years in a survey of businesses from Oxford Economics conducted in July.

  • Cited by 36% of respondents, it surpassed financial crisis, inflation expectations, a tightening credit supply and trade tensions.
  • Separately, 48% of about 4,500 risk experts across 58 countries cited geopolitical instability as their top risk last year, up from 31% in 2018, according to an Axa report.

What they're saying: At a recent industry convention, "we had more companies than we've ever had come and speak to us, [and our competitors] were seeing a similar increase," Tyler Hosford, regional security manager for International SOS, a medical and security assistance firm, tells Axios.

  • At the "very basic level," companies like International SOS help clients look at who's traveling while providing tools and intelligence on potential threats.
  • But now, businesses are increasingly asking for deeper consultations on contingency, including running test exercises.

The intrigue: Companies with offices and operations in Israel are thinking about the kind of support they can provide to workers in Israel — with many Israeli nationals not looking to leave the country — including physical resources or tele-mental health sessions, Hosford says.

  • "A lot of companies going forward will probably look at [Israel] as a place where [they may] need to have food, water [and] medical supplies stocked or contracted," he adds.

Flashback: Russia's invasion of Ukraine changed the way companies approached support for local nationals, according to Hosford.

  • U.S. companies enlisted former military and law enforcement experts to help employees in Ukraine move to safety following Russia's attacks.
  • "Traditionally, the idea of evacuating local national employees was a non-starter because by definition, you're potentially creating a refugee situation."

What we're watching: Stock and crypto-trading platform eToro says its operations are continuing without interruption and that it's "doing everything [it] can to ensure that every [worker] and their family receive the necessary support during these challenging times," according to a spokesperson.

  • Separately, Palo Alto Networks, a U.S. cybersecurity company with a Tel Aviv office, tells Axios' Sam Sabin that it has confirmed the safety of all of its employees in the region and "will continue to monitor the escalating situation" and "shift workloads to other regions as needed."
  • Representatives for multinationals including McDonald's, Meta, Salesforce and Microsoft declined to share information or did not respond to queries from Axios.

Go deeper: U.S. lawmakers scramble to help constituents stuck in Israel

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