May 21, 202314 min read

We Didn’t Start the Fire: Insights on the First and Second Quarters of 2023

Beginning 2023, we predicted that this year will be characterized by 3 Rs – Recession, Regionalization, and Reordering.

Insights International CEO Arpit Chaturvedi Moderating a Discussion with EU Parliamentarians' Delegation to New Delhi to discuss the European Free Trade Association (EFTA) collaborations and Agreements with India

If you were a business who did not keep a close watch on politics and geopolitics, gone are those days when these could be ignored. Political headwinds create unique challenges and opportunities for businesses, once again. Businesses without a keen understanding of political risk have faced severe setbacks in the first quarter of 2023. On the other hand, businesses with insight into how policymaking and the politics of policymaking works, are finding this capability to be of strategic and competitive advantage.

From the beginning of 2023 up until now, we have witnessed many disruptions, here are our top picks:

1. Increased supply chain disruptions due to the war in Russia and Ukraine: Some supply chains are genuinely shifting and others are being “white-labelled”, i.e. you do not import from Russia but you really do import from Russia. The Ukrainian counter-offensive set to begin this summer is likely to cause even more of these disruptions across the board. The Indo-Pacific countries are hurriedly developing regulatory codes, implementing reforms, and doling out incentives and subsidies to companies to attract investments ever since the outbreak of Covid-19, with mixed results. In India, the production linked incentives are increasingly tied to not just production, but investment targets and this is causing some consternation among manufacturing giants. What happens next, is yet to be found out. Also, The expected period of Chinese escalation with Taiwan is mid-late 2025 and this should give some time to companies to diversify their supply chains.

2. Increased Extended Producer Responsibility: In a bid to make businesses more sustainable, more and more countries are requiring manufacturers to report on their carbon footprint and Environmental Social Governance (ESG) parameters. While India has come up with Business Responsibility in Sustainability Reporting (BRSR) requirements and plans to expand on its scope/coverage. The challenge is that it triggers a ripple effect where large companies have already started demanding their suppliers (and their suppliers have started demanding their own suppliers) to report on ESG parameters. The smaller players are finding it difficult to do so, and most larger players are also relatively new on the learning curve.

3. Carbon Taxes and Carbon Markets: The European Union (EU) is set to impose a carbon border tax – the Carbon Border Adjustment Mechanism (CBAM) making carbon reporting mandatory to exporters sending their goods to EU from October 2023 (CBAM will cover all industries by 2026). At the same time other countries are likely to impose carbon border taxes of their own. Taxes indeed are accompanied with incentives and market opportunities such as carbon credits markets. The challenge currently is the lack of demand for the carbon credits and imperfect market structuring.

4. AI Policy: With the rise of ChatGPT, Google’s Bard, Microsoft’s AI enabled Bing, generative AI and the capabilities/risks it unleashes is on the minds of every large government. India, Germany, Japan, Brazil, USA, China, and France among other countries are working speedily to develop their own AI policies and looking at each other as they do so. The G7 and the G20 meetings have developed significant agendas around AI. The diffusion of policies is taking place with respect to 3 global hotspots – China, EU, and the USA. In almost all countries, various interest groups are either advocating to hasten or to slow down AI regulations depending on their relations and investments in China.

5. Monetary Tightening: The first half of 2023 has witnessed monetary tightening mainly because of the US Fed’s attempt to get the country back on its feet. The second half of 2023 is likely to see some relief with the easing of interest rates. However, with no end in sight for the Russia-Ukraine war and US beginning to contemplate categorizing the Russia-Ukraine War as a frozen conflict, the relief could turn out to be too little, too late – at the detriment of developing economies.

6. The government re-emerges as a large buyer: 2023-24 are years of big elections. 2023 is the year of many state elections in India. Major (and politically critical) states such as Chhattisgarh, Rajasthan, Telangana, Madhya Pradesh, and Karnataka are going into elections. On a global level, India goes into general elections in April-May 2024, the United States in November 2024, and the UK in January 2025. This means a continuation and increase in subsidies with increased pressures on governments to tax the higher income brackets. Further, this means large spending by the governments with a caveat – most of the spending is either already happening or new contracts will be awarded once a new government takes office. Most importantly, elections mean new interest groups and newer bureaucrats gain importance at various levels.

At Insights International we have a dual focus:

(1) A deep insight into policymaking, politics, and geopolitics: We inform businesses of political and regulatory risk and support them in anticipating and navigating through these currents to gain strategic advantage.

(2) A deep understanding in new age business sectors: Sustainable development, space, water, recycling, technology, artificial intelligence – if you are in an “new age sector” we believe that your business will be core to the national and global economy, sooner than you might expect.

Now, time for a story

A veteran public affairs professional was contemplating on the fate of two of the largest Indian companies – first, a tremendously successful Indian company that recently become one of the world’s largest but now embroiled in controversy; and second, an old and large business house credited to have played a great role in India’s development story since the Independence.

Both companies have sound credentials. However, the first company (the newer one) is developing infrastructure in India and abroad, creating many jobs, and is bringing in foreign capital. The second (the old conglomerate) while it does all that, is also purchasing aircrafts from abroad, and has significant debt (more than the first company.

Yet, the second company, the old and stable one gains all the applause (it always has), and despite the good work the first company has done, it gets public derision. Why? The reason is, that the second company has a history of 3 potent practices:

(1) Tying its narrative intricately with the country’s growth. This way the company almost becomes seen as a public institution or an institution for the public good.

(2) Using Corporate Social Responsibility initiatives and meaningful investments, not directly for their own benefit but quite genuinely for the public good (sometimes overtly and sometimes silently) as a cushion against future reputational risk.

(3) Conducting a long and thorough Political, Economic, and Cultural (PEC) Analysis before it enters a new market and conducting regular PEC audits to track and forecast change in the current markets. Strategically positioning its image and business initiatives informed by the PEC imperatives. Building lasting relations, rapport, and goodwill with key players in the economic, scientific, academic, cultural, civil, and political communities.

Most companies are not able to do that. While many companies do 1, only some companies are able to do 2 with much success. Rarely do companies even know or do 3 in a structured manner.

The 3 Levels of Companies

So what do we do at Insights International? We make your company a Level 3 Company.

Please remember that your company size, revenue, years of operations etc. do not play a significant role in defining a company’s level. What matters is your level of “influence”, “agility”, and “resilience”.

Level 1

A Level 1 company, is financially stable and possesses the right messaging to position itself as contributing to a cause larger than enhancing shareholder value. This company publishes occasional thought leadership pieces, typically around 6-9 publications or blogs annually, focusing on industry insights and trends.

It engages in CSR programs that indirectly benefit the company or its employees, such as employee volunteer programs or charitable donations. Collaborations with local organizations or institutions are limited to joint initiatives or events. The company has a broad understanding of changes in the political economy and political risk but does not conduct regular or structured PEC analysis. It develops patronage relationships with a few decision-makers or bureaucrats (3-5 individuals).

The company's impact on societal or public good beyond financial stability is limited, as is its ability to navigate and mitigate political, financial, and reputational risks. A Level 1 company is able to influence some policy outcomes, but not in a significant manner and not consistently.

Level 1 Companies: Characteristics:

Financially sound.
Has the right messaging positioning itself as contributing towards a cause larger than enhancing shareholder value.

Level 1 Behaviors:

Publishes occasional thought leadership pieces reflecting on how it contributes to the larger good (6-9 publications/blogs annually) with a focus on industry insights and trends.
Engages in CSR programs related to issues that indirectly benefit the company or its employees, such as employee volunteer programs or charitable donations.
Develops limited collaborations with local organizations or institutions for joint initiatives or events.
Broadly understands changes in political economy and political risk but does not conduct PEC-type analysis on a regular or structured basis.
Develops patronage relationship with few (3-5) decisionmakers/bureaucrats

Level 1 Outcomes:

Limited impact on societal or public good beyond financial stability.
Limited engagement in in-depth analysis of political, economic, and cultural factors.
Limited ability to navigate and mitigate political risk, financial risk, and reputational risk.
Is able to influence some policy outcomes, but not in a significant manner and not consistently.

Level 2

A Level 2 company in addition to possessing characteristics of a Level 1 company, actively engages in Corporate Social Responsibility initiatives and meaningful investments for the public good as a cushion against future reputational risk. This company demonstrates a broader understanding of changes in the political economy and political risk. It conducts periodic PEC analysis before entering new markets, assessing regulatory frameworks, cultural nuances, and economic trends. Regular PEC audits are conducted to track and forecast changes in current markets, adjusting strategies accordingly. The company strategically positions its image and business initiatives based on PEC imperatives, aligning with local values and priorities. It develops collaborations with local NGOs, national nonprofits, or research institutions to address specific social or environmental issues. The company participates in industry-specific events, conferences, or forums, contributing to knowledge sharing and thought leadership through detailed reports and memos.

The scope of CSR initiatives expands to include sustainable practices, environmental conservation, community development, or social welfare projects that align with community needs. The company develops long-standing but transactional relationships with a significant number of decision-makers or bureaucrats and institutions.

The company's impact on societal or public good is significant, and it demonstrates a moderate ability to navigate and mitigate political, financial, and reputational risks. The government and civil society consider the company a key interested stakeholder on industry and public good issues. A Level 2 company is able to is able to influence policies significantly to its advantage.

Level 2 Companies: Characteristics (in addition to Level 1):

Engages in Corporate Social Responsibility initiatives and meaningful investments for the public good (sometimes overtly and sometimes silently) as a cushion against future reputational risk.
Demonstrates a broader understanding of changes in the political economy and political risk.

Level 2 Companies Behaviors:

Conducts periodic PEC (Political, Economic, and Cultural) analysis before entering new markets, assessing regulatory frameworks, cultural nuances, and economic trends.
Regularly conducts PEC audits to track and forecast changes in current markets, adjusting strategies accordingly.
Strategically positions its image and business initiatives informed by PEC imperatives, aligning with local values and priorities.
Develops collaborations with local NGOs, nonprofits, or research institutions to address specific social or environmental issues.
Hosts or participates in industry-specific events, conferences, or forums to contribute to knowledge sharing and thought leadership (For example, publishes or sponsors detailed reports, memos etc.)
Expands CSR initiatives to include sustainable practices, environmental conservation, community development, or social welfare projects that go beyond the current scope of business interests but are more aligned towards community needs.
Develops long standing but transactional relationship with a significant number of decisionmakers/bureaucrats and institutions (1-2).

Level 2 Companies Outcomes:

Significant impact on societal or public good through targeted CSR initiatives, such as education programs, environmental initiatives, or community development projects.
Improved reputation management and risk mitigation through CSR investments.
Enhanced understanding of the political, economic, and cultural landscape, leading to better navigation of political risk and financial risk.
Moderate ability to pre-empt, mitigate and manage reputational risk through proactive engagement in social and environmental issues.
Is seen as a key interested stakeholder by the government and civil society on issues relevant to industry.
Is seen as a key stakeholder by the government and civil society on issues of public good.
Is able to is able to influence policies significantly to its advantage.

Level 3

A Level 3 company in addition to possessing the characteristics of a Level 2 company, intricately ties its narrative with the country's growth, positioning itself as almost a public institution or an institution for the public good. It presents itself as an expert or aggregator of experts on an issue of public importance or public good. This company actively integrates its narrative with the country's growth, aligning goals and initiatives with national priorities such as sustainable development or innovation.

It invests significantly in CSR initiatives for the public good, with a genuine focus on long-term societal impact, including large-scale environmental conservation projects or educational scholarships. The company conducts comprehensive and regular PEC analysis to inform strategic decision-making, incorporating deep cultural understanding and economic forecasts. It proactively builds strong relationships with key stakeholders in political, economic, scientific, academic, cultural, civil, and political communities, fostering partnerships for joint initiatives. Collaborations with leading national and international academic institutions, think tanks, government bodies, and multilateral institutions, are established to conduct research or share knowledge on critical issues.

The company organizes high-profile events, conferences, or symposiums to drive discussions on key industry challenges and societal impact. It develops long-standing and meaningful relationships with a network of decision-makers or bureaucrats at all levels across geographies and multiple institutions. The company's impact on societal or public good is high, and it demonstrates advanced abilities in pre-empting, navigating, and mitigating political, financial, and reputational risks. The government and civil society consider the company an expert and collaborator on issues relevant to industry and public good. A Level 3 company is able to co-create policies with the government and relevant institutions and set the policymaking agenda.

Level 3 Companies: Characteristics (in addition to Levels 1 & 2):

1. Ties its narrative intricately with the country's growth, making it seen as a public institution or an institution for the public good.

2. Positions itself as an expert/aggregator of experts on an issue of public importance/public good.

Level 3 Behaviors:

Actively integrates its narrative with the country's growth, aligning its goals and initiatives with national priorities, such as sustainable development or innovation.
Invests significantly in CSR initiatives for the public good, with a genuine focus on long-term societal impact, such as large-scale environmental conservation projects or educational scholarships.
Conducts comprehensive and regular PEC analysis to inform strategic decision-making, incorporating deep cultural understanding and economic forecasts.
Proactively builds strong relationships with key stakeholders in political, economic, scientific, academic, cultural, civil, and political communities, fostering partnerships for joint initiatives.
Collaborates with leading national and international academic institutions, think tanks, government bodies, and multilateral institutions.
Organizes high-profile events, conferences, or symposiums to drive discussions on key industry challenges and societal impact.
Develops long-standing and meaningful relationships with a network of decisionmakers/bureaucrats at all levels across geographies and multiple institutions.

Level 3 Outcomes:

High impact on societal or public good through extensive and meaningful CSR initiatives, addressing critical social, economic, or environmental challenges.
Strong reputation management and risk mitigation through proactive engagement in social and environmental issues, positioning the company as a trusted and responsible entity.
Strategic positioning of the company's image and initiatives based on a deep understanding of the political, economic, and cultural context.
Advanced ability to pre-empt, navigate and mitigate political risk, financial risk, and reputational risk through comprehensive PEC analysis, strong relationships, and proactive measures.
Is seen as an expert and collaborator by the government and civil society on issues relevant to industry.
Is seen as an expert and collaborator by the government and civil society on issues of public good.
Is able to co-create policies with the government and relevant institutions and set the policymaking agenda.

So, how do we help you?

Our team of experts which includes former diplomats, bureaucrats, current international business and development practitioners, and academics from all over the world provides you with strategic advice to make your business thrive in a complex and uncertain world.

Step 1: Our team sets up 1-2 introductory calls to gain a deep understanding of your business (Complementary).

Step 2: We conduct a briefing session with your organization’s leadership team where our expert apprises your company of regulatory risks, challenges, and strategies relevant for your business (Complementary).

Step 3: We organize an expert panel discussion (online) to discuss an issue relevant to your business and the larger policy/sustainability landscape (Complimentary).

Step 4: We zero down on our terms of engagement to solve your organizations growth challenges (Contractual).

So What do we Really Do?

As Insights International, we offer a comprehensive range of services to help companies become Level 3 companies by enhancing their influence, agility, and resilience. Specifically, we do the following and more based on the specific needs of your company and industry:

Comprehensive PEC Analysis: Our team conducts in-depth and regular Political, Economic, and Cultural (PEC) analysis, enabling companies to gain a deep understanding of the evolving market dynamics, regulatory landscapes, cultural nuances, and economic trends. This analysis serves as the foundation for informed strategic decision-making, allowing companies to anticipate and navigate potential risks and capitalize on emerging opportunities.
CSR Strategy and Implementation: We collaborate with companies to develop and implement impactful Corporate Social Responsibility (CSR) strategies that extend beyond traditional philanthropy. Our experts help identify and prioritize social, economic, and environmental initiatives aligned with the company's values and business objectives. This includes designing and managing CSR programs, such as education initiatives, sustainable practices, environmental conservation projects, and community development programs.
Stakeholder Engagement and Partnerships: We facilitate proactive stakeholder engagement by helping companies build and maintain relationships with key stakeholders in political, economic, scientific, academic, cultural, civil, and political communities. Through strategic partnerships, companies can position themselves as trusted experts and aggregators of expertise on issues of public importance. We assist in forming collaborations with relevant organizations, think tanks, and academic institutions to drive joint initiatives, research, and knowledge sharing.
Reputation Management and Risk Mitigation: Our services support companies in managing their reputation and mitigating risks through proactive engagement in social and environmental issues. We work closely with companies to develop robust reputation management strategies, crisis communication plans, and stakeholder mapping exercises. By aligning their goals and initiatives with national priorities and demonstrating responsible business practices, companies can enhance their reputation and minimize potential reputational risks.
Advocacy Campaigns: We design and execute advocacy campaigns on behalf of companies to promote specific causes, influence policy decisions, and drive positive change. Our team helps companies identify relevant issues, develop compelling narratives, engage with policymakers, and mobilize stakeholders to amplify their impact and advance their advocacy goals.
Events and Roundtables: We organize high-profile events, conferences, and roundtables where industry leaders, policymakers, and experts come together to discuss key challenges and opportunities. These platforms facilitate knowledge sharing, thought leadership, and networking opportunities for companies to showcase their expertise, contribute to industry discourse, and build meaningful relationships with stakeholders.
Reports and Publications: We support companies in producing detailed reports, blogs, podcasts, publications, and thought leadership pieces that reflect their expertise, insights, and contributions to the larger good. These publications serve as valuable resources for industry stakeholders, policymakers, and the wider public, establishing the company as a thought leader and trusted source of information.
Training Programs: We develop customized training programs to enhance the knowledge and skills of company employees on topics such as CSR, stakeholder engagement, reputation management, and risk mitigation. These programs empower employees to effectively navigate complex challenges, align their actions with company values, and contribute to the company's Level 3 aspirations.
Knowledge Sharing Programs: We facilitate knowledge sharing initiatives, including webinars, workshops, and online platforms, where companies can share best practices, lessons learned, and innovative approaches. These programs foster collaboration, exchange of ideas, and peer learning among companies striving to become Level 3 entities.
Fellowship Programs: We design and implement fellowship programs that provide opportunities for professionals and experts to engage with companies on a deeper level. These programs facilitate knowledge exchange, collaborative research, and mentorship, allowing fellows to contribute their expertise and insights to the company's strategic initiatives. By fostering these collaborative relationships, companies can tap into diverse perspectives and strengthen their position as thought leaders.
Membership Programs/Forum Building: We assist companies in establishing membership programs or forums that bring together like-minded organizations, industry leaders, and stakeholders. These programs serve as platforms for networking, collaboration, and collective action. By fostering a community of engaged members, companies can drive industry-wide discussions, advocate for common interests, and leverage collective expertise to address key challenges and promote the public good.

Our Biggest Updates of the 1st and Second Quarter 2023

CEO Insights International, Mr. Arpit Chaturvedi moderated a discussion between Indian public policy experts and a delegation of Parliamentarians from the European Free Trade Association (EFTA) nations:

2. We hosted a panel discussion on Water, Technology, and Our Common Future with Dr. Lior Asaf, Water Attache, Embassy of Israel in New Delhi and Desire Energy Solutions Pvt. Ltd. in Jaipur and were joined by eminent members from the UNDP, Indian media, Asia Development Banks etc.

3. CEO Arpit Chaturvedi delivered a talk on "Indian Foreign Policy : Tracing the Trajectory” hosted by Global Youth India.

He noted that the future of India is in becoming an independent pole with closer cooperation with the USA. Furtherobserved that the importance of #Geotech in addition to Geo-economics and Geopolitics as a key driver of foreign policy.He spoke alongside speakers such as Ambassador Rtn. Anil Trigunayat (IFS Retd).

4. We hosted the Climajo Sustainability Conclave at the Constitution Club of India. The panellists included H.E. Amb. Diana Mickeviciene (Ambassador of Lithuania to India), Suresh Kumar, IAS (Former Chief Principal Secretary to Chief Minister, Punjab, IAS (Retd.), Ajitabh Sharma, IAS (Managing Director, Jaipur City Transport Services Limited), Dipakshi Mehandru (Director for Government Affairs and Public Policy, India, Dell Technologies), John Dickson (President, World Trade Partnership), Amb. Anil Trigunyat (Former Ambassador of India to Jordan, Libya & Malta), Abhishek Jain (Head, Investment Cell at O2 Power), Sandeep Dabur (Director, Comptroller and Auditor General of India), Dhruv Sharma (Election Campaign Manager – Political Advisor, Himachal Pradesh), and Rohit Chauhan (Former GM, Strategy, Policy and Business Development at Adani Enterprises Limited).