New data from FM Global ranks countries for resilience, here’s how risk managers can use the index to help improve business decision-making
Singapore is the second most resilient country in the world, according to the latest FM Global resilience index.
The index ranks the resilience of 130 countries’ business environments based on economic, risk quality and supply chain data.
Tan Hian Hong, operations senior vice president, operations manager, Asia, FM Global said, ”Asia remains home to some of the most resilient economies on the planet as well as some of its least.”
The ranking of the major economies reflects the region’s complexity and the challenges facing businesses seeking stability and continuity in a dynamic global landscape.
Singapore maintains its historically high ranking due to its strong economy, supply chain management and advanced approaches to risk management, followed by Japan, Hong Kong and Korea which all rank in the top quarter of the index.
Economic powerhouses China and India, as well as Singapore’s Southeast Asian neighbours, dominate the mid-sections of the Resilience Index, where factors including natural hazard exposure, geopolitics and infrastructure quality have pushed rankings down.
However, China fell ten places on the political risk ranking, reflecting labour unrest, zero-Covid-policy protests, and international pressures on human rights abuses.
Meanwhile, Hong Kong fell 17 places in the energy intensity resilience ranking, indicating its greater reliance on energy to generate economic performance.
”Asia remains home to some of the most resilient economies on the planet as well as some of its least.”
Other business environments became more resilient in their energy position, for instance, Australia rose eight places, partly reflecting its Energy Productivity Plan and Strategy.
Those programs were designed to reduce energy costs for people and businesses, reduce carbon emissions, and improve sustainability.
Australia moved one spot from 20th to 19th on the wider index this year, making it the second most resilient nation in the Asia Pacific region.
“Every country is unique when it comes to its risk profile and Australia is no different,” says Andrew Stafford, senior vice president, operations manager at FM Global Australia.
“With leaders in the region becoming increasingly concerned of climate-related business disruptions, the FM Global Resilience Index can play a critical role in assessing and strengthening the resilience of Australian businesses - many of which are key contributors both to the community and economy.”
The most resilient nations
FM Global’s data, both proprietary and aggregated from respected third parties, places these 10 countries/territories atop this year’s Resilience Index:
- United States 3 (Central region)
- United states 1 (East)
The bottom ten are:
- Lao PDR
What does it mean for risk managers globally?
The warming climate, a vulnerable economy, and geopolitical risks are powerful forces affecting business performance.
These concerns weigh heavily on risk managers, who need to help c-suite executives understand the implications for their companies.
However, the free-to-access resilience index data can provide risk professionals with valuable insights particularly when it comes to making business decisions.
“When potential disruptions loom, a resilient company can mitigate losses of revenue, market share and growth”
The data can help inform leaders on where to locate facilities, invest in risk mitigation, cultivate markets, source supplies and form strategic partnerships.
Used well, it could be an essential tool for site selection, supply chain design and market targeting.
FM Global says that several global organisations have already integrated the index into their site-selection/enterprise risk management software for strategic decision-making.
“Objective data should support most major business decisions,” said Pentti Tofte, staff senior vice president, data analytics, FM Global.
”When potential disruptions loom, a resilient company can mitigate losses of revenue, market share and growth – losses that may have been unrecoverable.”
The report identifies several factors that risk managers should be considering when it comes to establishing the resiliency of their sites and operations.
- Climate change: Regions with greater wind and flood exposures and weaker building codes tend to be less resilient
- The economy: Productive countries (those with higher GDP per capita) generally have more resilient business environments. Health expenditure per capita, political risks, energy intensity and high urbanisation rates also affect resilience
- Geopolitics: The world is still feeling the effects of global supply chain disruption, which has fuelled moves toward reshoring. Companies concerned about a government’s stability can consult the resilience index’s political risk ranking.
- Energy: Energy intensity is the resilience driver that saw the most movement overall this year.
- Seismic risk: Tragedies such as the 2023 Turkey–Syria earthquake disaster highlights the importance of enforcing building codes and standards.
The report said: “When an organisation becomes concerned about business risk, there are two ways, broadly speaking, to strengthen resilience: stay out of harm’s way and mitigate one’s risk through investments in property protection and business continuity.”