FM Global resilience index ranks Australia as third best in region
Australia is the third most resilient economy in the Asia Pacific region, after Singapore and New Zealand, according to an annual FM Global index measuring a business environment’s strengths and vulnerabilities.
The country scored an overall 86.2 out of 100 to place 20th globally on the FM Global Resilience Index, with zero representing the lowest resilience and 100 the highest.
Singapore topped the region with a score of 96.8 to place fourth out of 130 economies covered by the index, and New Zealand 86.8 to occupy 19th spot, one ahead of Australia.
Globally Denmark topped the resilience table with a score of 100, followed by Switzerland (97.7) and Luxembourg (97.5). Germany rounded up the top-five most resilient economies with a score of 96.5 to place fifth after Singapore.
FM Global says the index is a composite measure of an economy’s relative resilience to disruptive events based on a list of 15 drivers including new additions climate risk exposure, climate risk quality, health expenditure and supply chain timeliness.
The FM Global Resilience Index breaks down the 15 deciding drivers into three subgroups: risk quality, economic and supply chain.
Risk quality comprises of seismic risk exposure, climate risk exposure, climate risk quality, fire risk quality and cyber risk quality; economic is made up of productivity, political risk, energy intensity, urbanisation rate and health expenditure; and supply chain covers infrastructure quality, control of corruption, corporate governance, supply chain visibility and supply chain timeliness.
Australia scored 91.5 for risk quality, 80.2 for supply chain and 68.1 for economic.
Australian Operations VP and Client Service Manager Greg Duncan says Australia “is indeed a resilient country” as reflected by its overall score for the index.
The US mutual insurer says climate risk exposure and climate risk quality were added to help businesses intensify their focus on emerging environment perils.
Climate risk exposure reflects such threats as severe floods and wind storms, while climate risk quality reflects building codes, code enforcement, and facilities improvements.
Australia scored 67.4 out of 100 for climate risk exposure, reflecting the relatively high threat of perils like severe flood and bushfires.
However, its score of 88.9 for climate risk quality indicates ”the country is relatively better able than many other nations to address climate-related risks,” Mr Duncan said.
FM Global says before the Russia-Ukraine conflict, critical supply chains were already under strain from the pandemic. The resulting consequences have been trade bottlenecks and record backlogs of cargo ships.
“Two years on, shortages of key components and materials continue, significant delays at ports remain, and prices continue to rise,” FM Global says. “The specter of persistent inflation looms large.”
Click here to view the index.
