Australia is a resilient choice for businesses looking to expand to new markets, according to an FM Global study comparing the economic, supply chain and climate risks of 130 nations.
Australia ranks 20th in the climate risk quality, meaning it’s relatively better able than many other nations to address climate-related risk.
FM Global’s Resilience Index is an online tool for multinational companies looking to expand into new markets. It evaluates climate, supply chain measures and risk quality, giving each nation scores and rankings.
Australia ranks 19th for economic factors with a score of 68.1, 16th for risk quality with a score of 91.5 and 24th for supply chain with a score of 80.2.
In this year’s index, two new measures have been gauged for the first time. Climate risk exposure, which reflects extreme weather events, and climate risk quality, which assesses each nation’s building codes, enforcement and facilities improvements to prepare for climate events. Unsurprisingly, Australia fared poorly in climate risk exposure, ranked 107th. However, we sit in 20th place for climate risk quality, reflecting our ability to address climate-related risks.
The two filters enable index users to focus exclusively on the climate risk – and economic, social and governance (ESG)-related measures within the Resilience Index – to better understand inherent country risks and identify opportunities through these lenses, says an FM Global release.
“Not only are many businesses now more inclined to address a changing climate and mitigate risk but,
increasingly, investors and regulators are also demanding transparency,” says Greg Duncan, Australia operations
vice president, client service manager at FM Global.
Denmark is the most favourable location overall, with a score of 100 and number one ranking. Luxembourg has the highest economic ranking, and Singapore has the highest supply chain ranking.
Taking the pandemic into account, two other new measures have been introduced: health expenditure and supply chain timeliness. Australia ranks 16th for health expenditure with a score of 48.2 and 23rd for supply chain timeliness, with a score of 81.7.
“Whether dealing with threats posed by a changing climate, adjusting to war, navigating a pandemic or meeting
ESG demands, building resilience to achieve long-term sustainable outcomes is critical to business success,” says Duncan.