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Sustainability

Sustainability: The Business Opportunity of the 21st Century: Sustainability as a Constitutional Right – The Held Decision from Montana

Are you ready to take on the business opportunity of the 21st century? We are at a moment of enormous global change and even greater business opportunity. Climate change is the single biggest commercial opportunity of our time. In this podcast, Sustainability guru Richard Blundell and I explore the opportunities open to businesses that embrace sustainability from the business perspective. Find out why sustainability is the greatest opportunity of the 21st century, and you can prepare your business to take advantage of the unprecedented global opportunity.

In this episode of the “Sustainability: The Business Opportunity of the 21st Century” podcast, Richard and I deeply dive into the groundbreaking ruling in the case of Held v. State of Montana. This landmark ruling acknowledges climate change as a result of human activity, particularly CO2 emissions from burning fossil fuels, and challenges the constitutionality of fossil fuel provisions that ignore greenhouse gas emissions and climate change in environmental reviews.

My view of this ruling is a significant acknowledgment of climate change and emphasizes the importance of embracing sustainability from a business perspective. Conversely, Richard sees this as a momentous ruling that sets a precedent, affirming the reality of climate change and its connection to human activity. Our extensive experience and knowledge in the field of sustainability shape our perspectives. Join us on this episode of the Sustainability podcast as we delve deeper into this landmark ruling and its implications for the future.

Key Highlights:

  • Climate Change Ruling Sparks Sustainable Business
  • Montana’s Landmark Ruling for Future Environmental Protection
  • Groundbreaking Ruling with Climate Change Roadmap
  • Montana’s Urgent Climate Change Mitigation Efforts
  • The Detrimental Effects of Climate Change on Children

Resources:

Richard Blundell

Held v. Montana

Tom Fox

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Daily Compliance News

Daily Compliance News: September 14, 2023 – The What Could Go Wrong Edition

Welcome to the Daily Compliance News. Each day, Tom Fox, the Voice of Compliance, brings you compliance-related stories to start your day. Sit back, enjoy morning coffee, and listen to the Daily Compliance News. All from the Compliance Podcast Network. Each day, we consider four stories from the business world: compliance, ethics, risk management, leadership, or general interest for the compliance professional.

Stories we are following in today’s edition of Daily Compliance News:

  • Head of China’s top insurer jailed for corruption. (BBC)
  • Musk headed to arbitration against Wachtell. (Reuters)
  • PE plunges into NIL. (FT)
  • Tech leaders school Congress on AI. (NYT)
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Blog

Geopolitical Risks and Business Opportunities: Part 4 – Factors Impacting European Financial Integration

I recently had the opportunity to visit with Dr. Ian Oxnevad, Director of Geopolitical Risk Intelligence at Infortal Worldwide. This visit was for a podcast series sponsored by Infortal Worldwide entitled Global Risk Review. Dr. Oxnevad is a seasoned expert in geopolitical risk intelligence, with a Ph.D. in political science and a master’s degree in National Security Studies.

Ian Oxnevad is a seasoned expert in geopolitical risks impacting European financial integration and opportunities, with a profound understanding of Europe’s internal and external crises since 2008. We will consider factors affecting European financial integration in Part 4 of this five-part blog post series. Oxnevad’s perspective is that Europe has been grappling with constant internal stressors and external crises, such as banking crises and political upheavals, which pose significant risks to European financial integration. He underscores the need for enhanced risk analysis at the national level and geopolitical risk intelligence to navigate the uncertainties in Europe.

However, Oxnevad also identifies opportunities for US companies, particularly in the energy sector, to export to Europe, especially in the context of a stronger Euro. He further discusses the regulatory risks posed by GDPR and ESG laws in Europe and how US companies must manage these risks. In this blog post, we deeply dive into these complex and evolving geopolitical risks in Europe and their potential impact on financial integration and opportunities.

Europe has been facing many challenges impacting its financial integration and potentially altering the European Union (EU) and the Euro in a recent episode of the Riskology podcast hosted by Tom Fox and featuring Ian Oxnevad, the discussion centered around the geopolitical risks that Europe is currently grappling with and the opportunities that arise amidst these challenges.

One of the key factors affecting European financial integration is the ongoing Russia-Ukraine war. This conflict, coupled with rising energy prices, Middle East instability, and unchecked migration, puts pressure on the region’s financial integration and potentially changes the EU and the Euro as a monetary unit. These external pressures, along with internal populism, ongoing inflation, and high energy costs, are fueling resentment and could significantly impact European integration and its governing laws.

The Russia-Ukraine war has spilled energy inflation, creating monetary instability and supply chain issues. Annual inflation rose by 40% in June 2022 due to the invasion, and it remains high at 16.6% as of February this year. This inflationary pressure affects various aspects of the economy, including consumer spending capacity, production capacity, and manufacturing affordability. Governments have increased spending to offset these costs, further straining the Euro and limiting the ability to navigate these challenges through monetary means.

The pressures Europe faces are not limited to the EU as a whole but extend to the national level. This shift necessitates a greater focus on risk analysis at both levels, as the rules and regulations governing European integration may change suddenly and overnight. The emergence of populism across the EU, as seen in France and the Netherlands, indicates growing animosity towards incumbents and a desire for change. This political upheaval poses risks and uncertainties for businesses operating in Europe, as regulations, taxation, and even the monetary unit itself may be subject to change.

Despite these challenges, there are opportunities for US energy companies to export to Europe. The weakening of the dollar and the strength of the Euro make Europe an attractive export location for US goods and services, including energy. However, regulatory risks and challenges must be carefully considered. Europe’s robust data protection and privacy laws, such as the General Data Protection Regulation (GDPR), and its focus on environmental, social, and governance (ESG) factors present potential risks for US companies. Compliance with these regulations requires careful risk management and due diligence.

ESG initiatives, particularly the push for renewable energy, present countervailing risks. While there is a regulatory push for green energy, the inefficiencies and costs associated with these technologies and the reliance on minerals from regions with questionable labor practices create challenges. Balancing the environmental (E) aspect of ESG with the social (S) and governance (G) aspects requires careful consideration and geopolitical risk intelligence.

The banking sector is also facing turmoil, with institutions like Deutsche Bank and Swiss banks experiencing challenges. While it is unlikely that the German government would allow Deutsche Bank to fail, the stability of these institutions and their role in global monetary and fiscal policy is a concern. The European Central Bank, the Bank of England, and the US Federal Reserve play crucial roles in stabilizing the financial systems, but their ability to navigate these challenges remains to be seen.

In conclusion, the geopolitical risks impacting European financial integration and opportunities are complex and multifaceted. Europe’s response to the Russia-Ukraine war, rising energy prices, Middle East instability, and unchecked migration will shape the future of the EU and the Euro. Balancing the tradeoffs involved in managing these risks, such as the need for defense spending versus protecting consumers, requires careful analysis and risk intelligence. US companies can find opportunities in exporting to Europe, but they must navigate regulatory risks and consider the contradictions within ESG mandates. The banking sector’s stability and global institutions’ role in stabilizing the financial systems are also areas of concern. As Europe faces these challenges, it is crucial to consider the impact on financial integration and opportunities when making decisions.

Please join us tomorrow when we explore geopolitical risks and business opportunities in China and the greater Asia Pacific region.

You can check Dr. Oxnevad in the full five-part Riskology podcast series here.

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Blog

What Data to Ask For and How to Ask for It

I recently had the opportunity to visit with Vince Walden, founder and CEO of KonaAI, for a podcast series on the uses of data driven compliance. KonaAI is the sponsor of those podcasts. This blog post series will flesh out the podcast show notes over the next five blog posts, and we will discuss generative AI and ChatGPT in compliance, the profiles of a corrupt payment, making the business case for data-driven compliance, what to ask for and how to ask for it and some success stories. In Part 4, we will explore what data to ask for and how to ask for it.

As always, I am joined by Vince Walden, founder and CEO of KonaAI. There is a quiet revolution happening in the realm of compliance. It’s one that, if harnessed correctly, can turn a typically reactive process into a proactive strategy. I am, of course, talking about data-driven compliance. By using the vast amounts of data your organization collects, you can uncover potential compliance risks before they become actual problems. This approach can be a game-changer for your role as a compliance officer and your organization’s overall risk management strategy. No longer will you be caught off guard. Instead, you’ll lead the charge with real-time insights and actionable data.

Imagine a world where compliance isn’t a headache but a strategic advantage. You’re not constantly putting out fires but predicting and preventing them. It might sound like a dream, but it doesn’t have to be. How so? Well, by adopting a data-driven approach to compliance. This innovative method allows you to identify, assess, and manage potential compliance risks based on actual data. It’s about staying one step ahead, making informed decisions, and truly adding value to your organization. It’s not just about avoiding penalties and meeting regulations anymore. It’s about creating an environment of continuous improvement and proactive risk management.

Let’s paint a picture. You’re in a game of chess. But in this game, you’re not just reacting to your opponent’s moves. You’re anticipating them, strategizing, and making proactive decisions. That’s the power a data-driven approach to compliance can bring to your role as a compliance officer. It’s more than just crunching numbers and keeping up with regulations. It’s about leveraging the power of data to identify and mitigate risks before they materialize. It’s about transforming compliance from a cost center into a strategic asset. So, if you’re curious about how to make this data-driven shift, buckle up because we’re about to dive deep into this transformative realm.

Compliance monitoring and risk assessment are crucial components of any effective compliance program. In a recent episode of the podcast “Data Driven Compliance,” hosted by Tom Fox and featuring Vince Walden, the topic of continuous compliance monitoring and risk assessment process was explored in depth. This article aims to comprehensively analyze the critical factors that impact this process, discuss the tradeoffs involved in balancing different factors, and explore the challenges associated with other approaches.

Vince highlighted the importance of starting with a fraud risk assessment. This initial step allows organizations to identify high-frequency and high-impact risks and implement mitigating controls. Compliance professionals can prioritize their efforts and focus on the most critical areas by assessing the likelihood and impact of various risks on a scale of one to ten.

Data sources play a crucial role in risk assessment. Financial accounting systems and third-party data are valuable sources of information for identifying and mitigating risks. Tracking and categorizing expenses in accounting systems is significant for identifying anomalies and assigning risk scores. Vince highlighted the significance of having a centralized system, such as the Kona platform, to streamline this process.

However, relying solely on analytics without integrating them into the fraud risk assessment would be best. He emphasized the need for alignment between data analysis and risk assessment to ensure efforts are focused on addressing the identified risks. Simply conducting data analytics without considering the underlying risks may not yield meaningful results.

One of the challenges in continuous compliance monitoring and risk assessment is the availability and accessibility of data. Some data sources may need help, requiring compliance professionals to prioritize based on the ease of data acquisition and its value. For example, if faced with choosing to conduct a data analytics project in Brazil or China, Walden suggested starting with Brazil due to the relative ease of obtaining data from that region.

Another challenge lies in the scope of compliance monitoring. Walden emphasized that compliance monitoring is not a one-time, all-encompassing effort. It is a journey that involves proactively assessing risks and monitoring them from location to location. Compliance professionals should focus on demonstrating continuous improvement rather than tackling all threats at once. This approach aligns with regulators’ expectations of an effective due diligence program.

In addition to the primary focus on risk assessment, Walden highlighted the importance of considering ancillary areas of inquiry. For instance, looking at places such as charitable donations or marketing spending can provide valuable insights into potential risks of bribery or corruption. The KonaAI tool can help correlate these ancillary data points and provide a more comprehensive view of compliance risks.

In conclusion, continuous compliance monitoring and risk assessment require a thoughtful and balanced approach. Organizations can identify and prioritize risks, starting with a comprehensive fraud risk assessment. Data sources, such as financial accounting systems and third-party data, play a crucial role in this process. However, aligning data analytics with the identified risks is essential to ensure meaningful results. Compliance professionals should also consider the data availability challenges and scope of compliance monitoring. Organizations can meet regulatory expectations and enhance their compliance programs by demonstrating continuous improvement and considering ancillary areas of inquiry.

Resources:

Connect with Vince Walden on LinkedIn

Check out KonaAI

Connect with Tom Fox on LinkedIn

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Riskology

Infortal on Global Risk Outlook: Part 3 – Dr. Ian Oxnevad on Russia and Ukraine

“If you’re fighting off a major world power, corruption will not be on your plate. You’re going to be looking at trying to keep domestic production up and national solidarity at high levels,” says Dr. Ian Oxnevad, returning guest on this installment of the Riskology special series. Dr. Ian Oxnevad and Tom discuss the geopolitical risk landscape between Russia and Ukraine.

Dr. Ian Oxnevad is the Director of Geopolitical Risk Intelligence for Infortal Worldwide, with a background in political science and national security studies. He is also the host of The Riskology Podcast.

You’ll hear Ian and Tom discuss:

  • The impact of the Russia-Ukraine war, as well as the implications counteroffensive measures may have on both countries. 
  • Companies may face risks in doing business with Russia as they violate sanctions. Ian also discusses the proxy war between Russia and the West and between China and the West.
  • The shrinking European economy is due to higher energy costs and the impact of food supplies in other parts of the world. 
  • The risks of corruption in Ukraine.
  • How China is playing a role in filling the void left by Western investment and the need for due diligence in the post-war business landscape
  • There is potential for a “rush” of people and companies looking to capitalize on the efforts to rebuild Ukraine. This can present a potential risk in terms of corruption for Ukraine.

Resources

Infortal Worldwide | Email | Tel: 1.800.736.4999 | Podcast

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Data Driven Compliance

The Uses of Data Driven Compliance: Part 3 – Making the Business Case for Data Driven Compliance

Welcome to Data Driven Compliance. In this podcast, we discuss how to use data to improve and enhance the effectiveness of your compliance program, creating greater business efficiency, all leading to more return on investment for your compliance regime. Join host Tom Fox as he explores how data will drive your compliance program to the next level. This podcast is sponsored by KonaAI.

I recently had the opportunity to visit with Vince Walden, founder and CEO of KonaAI, for a podcast series on the uses of data driven compliance. Over these five podcasts, we will discuss generative AI and ChatGPT in compliance, the profiles of a corrupt payment, making the business case for data-driven compliance, what to ask for and how to ask for it, and some success stories. Part 3 discusses how to make the business case for data-driven compliance.

Vince Walden, a seasoned professional with over 25 years of experience in compliance and risk management, is the founder and CEO of KonaAI, a software company specializing in automating data management for compliance and fraud risk management. Walden believes that compliance professionals play a crucial role in data-driven risk management. He emphasizes the need for these professionals to make a business case for data-driven compliance to both risk professionals and the CFO or head of operations.

According to Walden, data-driven compliance not only aligns with regulatory expectations and avoids risks, but it also improves the overall functioning of the business by identifying hidden money, reducing costs, eliminating waste and fraud, and preventing improper payments. His perspective is shaped by his extensive experience in the field, including his work as a consultant, fraud investigator, and forensic technologist. Join Tom Fox and Vince Walden as they delve deeper into this topic on this episode of Data Driven Compliance.

Key Highlights:

  • The Importance of Data Driven Compliance
  • Effectively Conveying Compliance Value to CFOs
  • The Impact of Data Driven Compliance
  • Maximizing Compliance ROI through Risk Mitigation

Resources:

Connect with Vince Walden on LinkedIn

Check out Kona AI

Connect with Tom Fox on LinkedIn

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31 Days to More Effective Compliance Programs

One Month to More Effective Written Standards: Day 7 – Policies and Procedures

There are numerous reasons to put some serious work into your compliance policies and procedures. They are certainly a first line of defense when the government comes knocking. The 2020 Update made clear that “Any well-designed compliance program entails policies and procedures that give both content and effect to ethical norms and that address and aim to reduce risks identified by the company as part of its risk assessment process.”

This statement made clear that the regulators will take a strong view against a company that does not have well-thought-out and articulated policies and procedures against bribery and corruption, which are systematically reviewed and updated. Moreover, having policies written out and signed by employees provides what some consider the most vital communication layer and acts as an internal control. Together with a signed acknowledgment, these documents can serve as evidentiary support if a future issue arises. In other words, the “Document, Document, and Document” mantra applies just as strongly to policies and procedures in anti-corruption compliance.

The specific written policies and procedures required for a best practices compliance program are well-known and long-established. According to the 2020 FCPA Resources Guide 2nd edition, some of the risks companies should keep in mind include the nature and extent of transactions with foreign governments (including payments to foreign officials), use of third parties; gifts, travel, and entertainment expenses; charitable and political donations; and facilitating and expediting payments. Policies help form the basis of expectations for standards of conduct in your company. Procedures are the documents that implement these standards of conduct.

Three key takeaways:

1. Written compliance policies and procedures, together with the Code of Conduct, form the backbone of your compliance program.

2. The DOJ and SEC expected well-thought-out and articulated compliance policies and procedures to be adequately communicated throughout your organization.

3. Institutional fairness for the application of policies and procedures demands the consistent application of your policies and procedures across the globe.

For more information, check out The Compliance Handbook, 4th edition, here.

Categories
Blog

Geopolitical Risks and Business Opportunities: Part 3 – Russia and Rebuilding Ukraine

I recently had the opportunity to visit with Dr. Ian Oxnevad, Director of Geopolitical Risk Intelligence at Infortal Worldwide. Global Risk Review, a podcast series that Infortal Worldwide sponsors was the reason for this visit. Dr. Oxnevad is a seasoned expert in geopolitical risk intelligence, with a Ph.D. in political science and a master’s degree in National Security Studies.

Over this five-part blog series, we will look at the risk profile for US Companies doing business in the following geographic regions: the Middle East, Latin America, Russia and Ukraine, Africa, and the Asia Pacific region. Over this five-part blog post series, we will review Dr. Oxnevad’s views in each one of these regions. Part 3 reviews the business opportunities and risks in Russia and the challenges and opportunities in rebuilding Ukraine.

Dr. Oxnevad deeply understands the issues in Russia and Ukraine. His belief that the upcoming rebuilding of Ukraine will spark a surge of interest from significant US corporations, the EU, and China, potentially resulting in increased corruption and geopolitical risks, shapes his perspective on the global implications and geopolitical risks. Oxnevad emphasizes the need for ongoing due diligence and monitoring by Western companies to navigate potential challenges and uncertainties, such as changes in laws and competition from different countries. He also acknowledges the significant risk of corruption in Ukraine, especially during the rebuilding process, and believes it may take time for EU institutions to mitigate this risk.

The war between Russia and Ukraine has had far-reaching consequences, not only for Europe but also for other parts of the world. Indeed, it has changed business across the globe forever.

One of the key factors to consider is the impact on global food supplies. Russia and Ukraine are major food and grain suppliers, and the war and sanctions have disrupted their production. This has put food supplies at risk, increasing food costs and inflationary pressures worldwide. Countries in Africa and the Middle East, in particular, heavily rely on these food supplies, and the uncertainty surrounding Ukraine’s ability to meet these demands raises concerns.

The rebuilding of Ukraine presents significant opportunities for major corporations from the United States, the European Union, China, and other countries. However, it also raises concerns about corruption and geopolitical risks. Ukraine has been traditionally viewed as a high-risk country for corruption, and the war has only exacerbated this issue. The chaos and emergency in the country create a greater incentive for corruption to exist. President Zelensky’s ability to address these concerns remains to be determined, and it is unlikely that corruption will disappear even if the war were to end abruptly.

From a geopolitical standpoint, the war between Russia and Ukraine has become a proxy war between Russia and the West and China and the West. This further complicates the situation and introduces additional risks. The resolution of the war and the lifting of sanctions will depend on various factors, including Russia’s political landscape and the leadership of President Putin. If Putin remains in power, the sanctions will likely stay in place. However, if there is a change in leadership, lifting sanctions could be a possibility, albeit with careful consideration of Russia’s economic and political landscape.

The rush to capitalize on Ukraine’s rebuilding presents both opportunities and risks. Many countries and corporations will be vying for a stake in Ukraine, increasing the incentives for corruption and other geopolitical risks. Competitors will be aware of the presence of different countries, further complicating the situation. It is crucial for American companies and others to carefully assess the risks associated with corruption in Ukraine and conduct thorough due diligence before engaging in business opportunities.

The international community, including the European Union, NATO, and the United Nations, may play a role in assisting Ukraine in its rebuilding efforts. Establishing the rule of law, policies, and procedures will ensure a successful reconstruction. However, the timing of international involvement is crucial. Rebuilding efforts must occur before existing EU institutions move in to address corruption, as this will help mitigate the associated risks.

In conclusion, rebuilding Ukraine has significant global implications and geopolitical risks. The disruption of food supplies, the rush to capitalize on opportunities, and the challenges associated with corruption must be carefully considered. The resolution of the war and the lifting of sanctions depend on various factors, including Russia’s political landscape. International assistance in rebuilding efforts, particularly in establishing the rule of law, will be crucial. However, it is essential to conduct thorough due diligence and assess the risks before engaging in business opportunities in Ukraine.

Please join us tomorrow when we explore geopolitical risks and business opportunities in Europe.

You can check Dr. Oxnevad in the full five-part Riskology podcast series here.

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Daily Compliance News

Daily Compliance News: September 13, 2023 – The Dirty Deeds Edition

Welcome to the Daily Compliance News. Each day, Tom Fox, the Voice of Compliance brings to you compliance-related stories to start your day. Sit back, enjoy a cup of morning coffee, and listen in to the Daily Compliance News. All, from the Compliance Podcast Network. Each day we consider four stories from the business world, compliance, ethics, risk management, leadership, or general interest for the compliance professional.

  • Businesses should disclose China risks. (WSJ)
  • DOJ ramps up National Security enforcement resources. (WSJ)
  • No timeline for climate disclosure from SEC. (WSJ)
  • New pod on corruption. (Dirty Deeds)
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Compliance Into the Weeds

Compliance into the Weeds: Failure to Have Effective Compliance Program

The award winning, Compliance into the Weeds is the only weekly podcast which takes a deep dive into a compliance related topic, literally going into the weeds to more fully explore a subject. Looking for some hard-hitting insights on sanctions compliance? Look no further than Compliance into the Weeds! In this episode, Tom and Matt consider the recent DOJ enforcement action involving Verizon Business Network Services for failure to have an effective cyber security compliance program.

The recent case of Verizon’s non-compliance with cybersecurity standards and subsequent remediation efforts has sparked a significant conversation in the realm of cyber compliance. Tom views this case as a roadmap for companies to enhance their cybersecurity programs, emphasizing the importance of gap analysis and pressure testing. He draws parallels between cybersecurity compliance and the Foreign Corrupt Practices Act (FCPA) compliance, suggesting that Verizon’s case could serve as an example for other companies.

Matt applauds Verizon’s voluntary self-disclosure and extensive remediation efforts. He underscores the importance of disclosure, cooperation, and remediation in both cybersecurity and corruption cases, viewing Verizon’s actions as a positive example for other companies. Join Tom Fox and Matt Kelly as they delve deeper into this topic in the latest episode of the Compliance into the Weeds podcast. 

Key Highlights

·      Verizon’s Cybersecurity Program Failures

·      Enhancing Cybersecurity Compliance through Remediation Measures

·      Automating Compliance Efforts with GRC Tools

·      Potential Penalties for Non-Disclosure of Cybersecurity Issues

 Resources

Matt in LinkedIn

Matt on Radical Compliance

Tom 

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