In this 2025, organizations face an increased risk of suffering acute supply chain failures as a result of growing global geopolitical tensions and protectionist trade strategies, according to a new report published by Marsh.
According to its analysis, in addition to the risks associated with the reconfiguration of global trade and geopolitics, the report concludes that changing market and policy dynamics present both challenges and opportunities for organizations in the energy transition, especially regarding carbon credit markets (CCMs) and debt-for-nature swaps (DFNSs).
One of the findings highlighted in the report is that organizations trading with connector countries to circumvent existing or anticipated trade controls, or that have suppliers doing so, may be more exposed to disruptions induced by trade policies in the months and years ahead. “As a result of deteriorating relations between major trading partners, governments may also impose trade barriers on goods coming from connector countries, especially those that include components from the originally targeted country, which could create significant volatility in the global supply chain,” it notes.
What Can Companies Do?
To improve their resilience to supply chain shocks arising from the current geopolitical landscape, the report recommends that organizations review China’s commitment to its trade strategy and the underlying objectives of U.S. trade policy, and consider to what extent the current connector model will persist in relation to their business models.
The Political Risk Report states that changing market and policy dynamics present both challenges and opportunities in the energy transition, echoing the findings of the World Economic Forum Global Risks Report 2025, in which environmental risks dominate the 10-year horizon.
While global CCMs made significant progress at COP29 and DFNSs have also gained momentum, challenges remain in both areas regarding political risk and the possibility of default. Additionally, the growing climate compliance obligations, especially those stemming from new European Union regulations, may present operational risk challenges for organizations.
“Increased risks around the economy, geopolitics, and climate change are creating an incredibly complex operating environment, unlike anything organizations have experienced in decades. Those who build their ability to understand, assess, and mitigate the risks facing their operations are likely to be better positioned to identify opportunities where others only see ambiguity and to gain a competitive advantage in these uncertain times,” said Robert Perry, Global Head of Political Risk and Structured Credit at Marsh Specialty, in light of these findings.
