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Analysis:
Analysis
14 Jun 2022
5 minute read

Reshaped by War

Examining the conflict in Ukraine and business implications for our interconnected world

Reshaped by War: Examining business implications of the conflict in Ukraine
1 MB PDF

The war in Ukraine has already catalyzed enormous disruption for businesses around the globe. Its economic impact has reverberated through energy, commodity, and financial markets, as well as trade and supply chains already disrupted by the COVID-19 pandemic.

While the geopolitical and humanitarian crisis dominates the headlines, a broad range of forces already at play are likely to shape business implications not only in 2022, but potentially for years to come. Understanding the possible near-term future scenarios and their implications will be critical to help business leaders make informed decisions and navigate the evolving environment ahead.

Deloitte invites executives to further explore these scenarios and prepare for a world that no one can predict. Download Reshaped by War: Examining business implications of the conflict in Ukraine to get started.

Among the highlights:

Four futures of the war in Ukraine
Deloitte has identified four scenarios—stories about the future designed to spark insight and spot opportunity and risk—that describe different ways the war in Ukraine could evolve over the course of 2022 and how businesses will be impacted:

  • Active military conflict ends in H2 2022 with a negotiated settlement, allocating part of eastern Ukraine to Russia, returning other land to Ukraine, enabling port access for Ukraine, and reopening trade between Russia and the West.
  • A negotiated peace agreement reactivates trade between Russia and West, but improved trade opportunities come with new risks
  • Localized warfare persists in eastern and southern Ukraine and although Western sanctions remain, enforcement weakens. Neutral / Russia-friendly countries continue trade with Russia and the West, and Russia seeks to further erode Western cohesion.
  • The drawn-out conflict exacerbates uncertainties about global trade and East/West relations, triggering near-term economic shocks
  • Waning Western cohesion allows Russia to gain control and push forward with destructive military gains, trade with neutral countries, and increased cyber attacks.
  • Russia has weaponized its control of essential resources that Western businesses depend on, and signals indicate an increasing risk of East/West trade friction
  • As Russia attacks supply routes in countries on its western borders, NATO deploys its military. The West exercises all possible sanctions, cutting off Russia from Western trade. The fighting intensifies, but the West prevails.
  • Russia’s exclusion from all trade with the West, coupled with active NATO military deployment, disrupts the global economy, but ultimately, stability in the region will create new opportunities

Selected implications for business

In close collaboration with an international team of subject matter specialists, Deloitte has examined business implications of each scenario across various domains, including supply chain, cybersecurity, energy, the macroeconomy, talent, and food.

While each scenario brings unique implications for businesses and governments, certain trends are likely to persist across all scenarios:

  • Continued inflationary pressure on global economic growth
  • Prolonged global supply chains shocks
  • Increased focus on energy independence but slower progress toward renewables
  • Increased risk of doing business in and with Russia
  • Growing risk to global food security
  • Heightened cyber risks facing businesses and governments

While the course of the war itself is uncertain, the importance of taking action quickly is not. By stress-testing organizational strategies against different possible futures and the conditions they create, leaders can build resilience and gain greater clarity about key challenges and opportunities that might lie ahead.

Co-authors

Martha Culver
mculver@deloitte.com

Annie Forhan
aforhan@deloitte.com

Jillian Macpherson
jimacpherson@deloitte.com

Rider Tuff
rtuff@deloitte.com

Rejin Johny
rjohny@deloitte.com

Get in touch

Andrew Blau

Deloitte - Global
With more than 30 years of experience that spans strategy consulting, futures thinking, social impact, and public policy, Andrew helps executive teams address and adapt to the most critical issues likely to shape their future success. He is a managing director at Deloitte Consulting, where he leads work on the firm’s “Signature Issues” program, created to accelerate Deloitte’s insights and services on the most important cross-cutting issues shaping organizations and markets. Previously, he launched and led Deloitte’s Strategic Risk Solutions practice, created to help senior executives and boards spot and prepare for disruption and other fundamental threats to their competitive position and business model. He also served as senior adviser to the Chief Strategy Officer, guiding internal efforts to develop and refine strategy for Deloitte and many of its practice areas, and as a Deloitte “Blockchain Fellow,” advising clients and Deloitte on the implications of the technology. Andrew joined Deloitte in 2013 with Deloitte’s acquisition of the Monitor Group, where he was a partner and head of Global Business Network, famous for the use of scenarios and other tools that help organizations thrive in a complex, uncertain environment. In that role, he led the largest dedicated scenario practice in the world, helping leaders in industry, government, and philanthropy manage uncertainty, develop new strategies, and make their organizations more able to adapt to change.
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