Why risk leaders in chemical operations now shape business outcomes

For years, risk management was treated as a control function: reduce cost, transfer exposure, respond when something goes wrong. In chemical operations, that approach has always been incomplete. Today, as disruption becomes more frequent and more systemic, it is increasingly unworkable across industry.

What has changed most over the past two decades is the interconnectedness and velocity of risk. Physical hazards, cyber threats, climate-driven events, supply chain fragility and regulatory pressure no longer behave as separate categories – they compound. That reality is reflected in FM’s research: 62% of companies in industrial, manufacturing and technology sectors report at least one severe disruption due to extreme weather in the past three years, yet only 41% say their executive board regularly discusses extreme weather. The gap between disruption and preparedness is one reason risk leaders are being pulled closer to strategic decision-making.

Immediate consequences

In chemical operations, the consequences of this complexity are immediate. Sites are capital-intensive, highly engineered and dependent on utilities and critical equipment that cannot be replaced quickly. FM loss experience shows why: transformers, a common critical asset across chemical sites, have been associated with more than USD 500M in losses over four years, and depending on the type, replacement lead times can range from six to 36 months. When disruption meets long-lead recovery, “risk” stops being a technical discussion and becomes a strategic question: how quickly can operations restart, customer commitments be met, and market position be protected?

Fast recovery is a competitive advantage

This is where resilience becomes measurable – not abstract. The 2026 FM Resilience Index ranks 130 countries and territories across 18 resilience factors, and it is underpinned by real-world property loss analysis. One of its most business-relevant findings is direct: locations in countries ranked in the top 50 recover over 30% faster from property losses, on average, than locations in other countries. Faster recovery is a competitive advantage and it is influenced by choices leaders make around design, maintenance, spares and preparedness.

At the same time, transferring risk has become harder. As losses become more correlated and capacity more selective, risk transfer still matters. But it cannot be the strategy. FM’s NatHaz research highlights why engineered resilience now has a stronger financial rationale: 44% of risk decision-makers say the cost of insurance is too high to secure full coverage, and they estimate their insurance covers only about half of potential losses; brokers estimate coverage closer to 40%. In other words, the balance sheet increasingly depends on prevention and recovery capability, not only on insurance structure.

From protection to performance

This is also why effective risk leadership today is less about reporting exposures and more about integrating controls into performance. In chemical operations, the technical details matter because they drive business outcomes. Piping failures alone have driven over USD 300M in gross loss over five years, often involving release of ignitable, flammable, hazardous or toxic materials – events that can produce both major property damage and extended production interruption. Preventing these losses requires process safety discipline and asset integrity programmes commensurate with hazards such as corrosion, erosion, creep, fatigue and overpressure.

The risk leader’s growing influence

However, influence at the top table does not come automatically. Risk leaders who gain traction with senior executives do two things consistently.

First, they translate. They connect engineering realities to executive priorities –continuity of supply, customer reliability, capital allocation and recovery time. This translation matters because many organisations still overestimate how well they understand their exposure: 95% of risk decision-makers say they are mostly or fully aware of extreme weather exposure, but only 67% of brokers agree, and 74% of risk decision-makers underestimate wind and flood exposure in the countries or regions where business-critical operations are located. Engineering-led assessment closes that gap.

Second, they build trust, earned through transparency and partnership across functions over time. In complex plants, credibility becomes as important as competence: operations, maintenance, engineering, procurement, finance and security all need confidence that risks are understood, prioritised and actively managed.

Action before disruption

The most practical proof of “risk leadership” is action taken before disruption. Here, NatHaz findings show a persistent implementation gap. Brokers rank embedding risk engineering into the design and construction of new sites as the most impactful measure, yet only 28% of companies say they have fully adopted it. The same is true for equipment decisions: brokers rate selecting and installing equipment based on its resilience as highly impactful, but only 23% of organisations report full implementation. These are exactly the areas – design discipline, critical equipment resilience, spares strategy, contingency planning – where chemical operations can measurably reduce downtime.

This is why resilience is increasingly viewed not as a choice, but as the path forward. True resilience is not about preventing every loss; it is about limiting severity and accelerating recovery through engineered reliability. Preventive maintenance, well-designed contingency plans and adequate critical spares reduce downtime and help sustain supply chain stability and customer trust.

That is why risk now has a seat at the table. Not as a constraint on ambition, but as a strategic enabler of progress, because in an era defined by volatility, operational reliability and recovery speed increasingly determine competitiveness.