Historically disruptive year highlights true value of resilience

After a year of supply chain disruption, political tension and growing climate worries, resilience is increasingly recognised as key for global businesses – and nowhere more so than in Denmark, according to FM Global’s latest Resilience Index.

The Scandinavian nation rises from third in last year’s index to its first-ever top ranking, bumping Norway off the top spot – a spot it has held for some years.

In this year’s index, Denmark benefits from higher resilience rankings than last year in the measures for economic productivity, fire risk quality and oil intensity (signifying increased vulnerability to oil shock). Norway and Luxembourg round out the top three countries in overall business resilience, with Western Europe taking 9 of the top 10 places. The Central United States is the lone exception, occupying ninth place as it did last year.

“Historically, efficiency, speed, and profitability have often been primary considerations for global businesses,” said Andrew Bryson, operations senior vice-president and manager of FM Global’s London operations. “However, the disruption that many organisations suffered in 2020 should remind leaders across the globe that the ability to recover, rebound and operate in difficult conditions should be valued equally highly. Resilience has always affected a company’s total value and events of the last 12 months have dramatically reiterated this point.”

Ukraine is the index’s biggest riser, soaring from 84 to 63 based on improved resilience rankings in multiple measures, including productivity, oil intensity, natural hazard exposure, inherent cyber risk and control of corruption.

The biggest faller is Oman, sinking from 57 to 69 because of steep drops in economic productivity and oil intensity. The drop would have been even larger if not for an improved ranking in natural hazard exposure due to new, more incisive data incorporated into the index relating to earthquake risk.

The United Kingdom re-entered the index’s top 10 (now ranked 10 in overall resilience, up from 13 in 2020’s index), driven primarily by an easing of political risk, reflecting in part the election of a government with a large majority and the political stability this brings.

The United States region 1 (the East and Southeast) fell from 10 to 17 in this year’s index, reflecting two changes: a drop in the region’s natural hazard exposure ranking of nine places due to the new earthquake risk data; and a falling political risk ranking for the country as a whole (from 41 down to 50). The latter shift may reflect partisan acrimony and heightened conflict over social justice issues.

China’s region 1 (the East) fell nine places, from 68 to 77, due to a 19-place drop in the country’s oil intensity ranking and a 6-place drop in control of corruption. China’s region 3 (Central and West) fell six places, from 65 to 71, exacerbated by a 9-place drop in its natural hazard exposure ranking.

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