FM Global Resilience Index Helps Guide Location Decisions

The online tool from FM Global, a RI-based mutual insurance company, provides data on risk conditions for businesses choosing new locations, evaluating supply chains, and other important factors.

FM Global, a mutual insurance company focused on property risk management for the resilience of its client-owners offers its enhanced, online 2022 FM Global Resilience Index, a an online tool that companies can use to inform strategic decisions as they site new facilities, evaluate supply chains, assess their business risk around the world, and perform due diligence for mergers and acquisitions.

Established nearly two centuries ago, Johnston-RI-based FM Global applies its capital, scientific research capability and engineering expertise to serve clients. The enhanced interactive Resilience Index enables decision makers to find and compare objective data about 130 countries and territories around the world. It now includes 15 economic, risk quality, and supply chain measures that offer executives insights into the vulnerabilities of a country’s business environment and, conversely, its resilience.

The FM Global Resilience Index sees nearly 20,000 visits per year from business leaders from sectors including chemicals, education, forest products, healthcare, mining, molten materials, pharma/biotech, power generation, governments, and semiconductors. Some global companies have integrated the index into their executive dashboards as well.

Climate Risk And ESG Enhancements

Two new index measures included in the 2022 FM Global Resilience Index — climate risk exposure and climate risk quality — help businesses intensify their focus on emerging environmental perils. The former measure reflects such threats as severe floods and wind storms, while the latter reflects building codes, code enforcement, and facilities improvements.

Notably, the Republic of Korea’s climate risk quality rose in rank for this measure since last year, climbing 36 places, from 89 to 53, as the country demonstrated its commitment by releasing national flood maps in 2021. The Resilience Index also indicates countries which are relatively better able than others to address climate-related risks such as the United Kingdom. While ranked 111th for climate risk exposure, the UK sits in 17th place for climate risk quality this year.

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Image: FM Global Resilience Index

Conversely, as businesses struggle to manage supply chain strains, this year’s index reveals manufacturing nations that rank low for both climate risk exposure and climate risk quality including China region 1 (East) and region 2 (Southwest and some coastal locations), India and Vietnam.

With stakeholder demands on companies increasing, the 2022 Resilience Index now includes country filters that present specific index data related directly to businesses’ climate risk and Environmental, Social and Governance (ESG) interests, as organizations strive to become more transparent in their commitments and values. The two filters enable index users to focus exclusively on the climate risk- and ESG-related measures within the Resilience Index to better understand inherent country risks and identify opportunities through these lenses.

Additionally, in recognition of the impact of pandemic risk, the 2022 FM Global Resilience Index includes two new measures: health expenditure and supply chain timeliness. Also, due to the availability of better-quality data, the Resilience Index now contains improved measures for cyber risk and energy intensity, a more comprehensive measure for 2022, broadened from fossil fuels to now include renewable and clean energy sources.

“Building resilience to achieve long-term sustainable outcomes is critical to business success, whether adjusting to war, navigating a pandemic, dealing with the threat of a changing climate, or meeting ESG demands,” said Pentti Tofte, Staff Senior Vice President, Data Analytics, FM Global. “The 2022 FM Global Resilience Index is designed to support senior executives with preparing for—and adapting to—a dynamic risk landscape and with building business resilience responsibly.”