FM Global Includes Top 3 Business Risks in Global Resilience Index

May 25, 2017

FM Global has expanded its Global Resilience Index to include insights around three of the top risks facing businesses: cyber attack, natural hazards and supply chain failure.

The interactive, online index ranks 130 countries and territories by their enterprise resilience to disruptive events. (By clicking on a graphic related to a specific country, risk profiles and rankings are revealed.)

Now in its fourth year, the index is designed to help businesses make decisions on the locations of facilities, select suppliers, evaluate established supply chains and identify customers who may be vulnerable, said Johnston, R.I.-based FM Global in a statement.

Users of the index can now investigate 12 quantified resilience drivers related to each country’s economic strength, risk quality and supply chain condition, the company added.

Cyber Risk Resilience

As an example of the index’s expanded insights into the area of cyber risk vulnerabilities, FM Global said analysis indicates that Saudi Arabia is a country with above-average inherent cyber risk. Its high internet penetration, combined with a limited cyber security industry, make it a more vulnerable target, the company indicated.

On the other hand, India, with its growing information technology industry, emerges as a country with below-average inherent cyber risk, FM Global said.

Natural Hazards

Providing an example of the index’s expanded insights into the area of natural disasters, FM Global said that Sweden has above-average resilience, due to its lower-than-average exposure to hazards such as windstorms, flood and earthquakes.

On the other hand, flood-prone Bangladesh, which is a major manufacturing hub for apparel and textiles, ranks toward the bottom of the index in terms of resilience to natural catastrophes, according to the index’s findings.

Supply Chain Risks

For companies with global supply chains, Germany, a major exporter and importer, ranks near the top in resilience, driven in part by its strong ability to demonstrate where parts, components or products are in transit, the index reveals.

Conversely, Russia ranks below average in the area of global supply chain resilience.

Enterprise Resilience

The index also ranks countries in overall enterprise resilience. Switzerland occupies the number-one ranking, reflecting high scores for its infrastructure, local supplier quality, political stability, control of corruption and economic productivity. However, Haiti ranks at the bottom of the index due in part to its high natural hazard exposure and poor economic conditions.

FM Global said many of the above insights originate from three new resilience drivers, which were added to the index:

  • Inherent cyber risk. A reflection of a country’s vulnerability to a cyber attack and its ability to recover.
  • Urbanization rate.Serves as a proxy for stress (on water supplies, power grids and other infrastructure) that would be exacerbated by natural disasters such as windstorms, flood and earthquakes.
  • Supply chain visibility.Reflects the ability to track and trace consignments across a country’s supply chain.

Other drivers of resilience that form the index include: productivity, political risk, oil intensity, exposure to natural hazard, natural hazard risk quality, fire risk quality, control of corruption, quality of infrastructure and quality of local suppliers. (See FM Global’s infographic for a graphic that explains the areas covered by the index).

“Our clients have found the index valuable when making important decisions about their properties, business strategies and supply chains,” said Bret Ahnell, executive vice president at FM Global.

“We upgraded the index this year to reflect escalating threats that can make a lasting impact on business performance. FM Global will continue to improve the index and make the data publicly available to any business, client or not,” he added.

The index was produced for FM Global by analytics and advisory firm Pentland Analytics.

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Further details about FM Global’s Global Resilience Index can be found on the company’s website.

Source: FM Global

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