Visualizing Social Risk in the World’s Top Investment Hubs


This post is by Carmen Ang from Visual Capitalist


Social Risk in the World’s Top Investment Hubs

Visualizing the Social Risk of the World’s Top Investment Hubs

As social responsibility becomes an important aspect of doing business, it’s more crucial than ever for decision-makers to understand the risks associated with various global markets.

This graphic, using data from a report by Verisk Maplecroft, looks at the world’s top cities for foreign direct investment (FDI) and assesses their relative levels of social risk.

In the article below, we’ll take a look at the research methodology to explain how risk was assessed in the report and touch on some key markets that placed high on the ranking.

The Relationship Between FDI and Social Risk

To look at the relationship between FDI and social risk, the report identified the top 100 cities for FDI in 2020, using data from fDi Markets (the Financial Times’ foreign investment monitor).

From there, social risk in the top 100 FDI cities was measured using data from Verisk Maplecroft’s Cities@Risk Social Index​​. The index measures the social risk landscape of 575 different cities across the globe, using three key pillars:

  • Civil and political rights: the right to protest, security force abuses
  • Labor rights: child labor, modern slavery
  • Poverty: portion of population in extreme poverty

After calculating scores based on these three metrics, cities were then grouped into four categories to measure their level of social risk:

  • Low risk
  • Medium risk
  • High risk
  • Extreme risk

Based on this analysis, citizens in 33 of the top 100 cities for FDI (representing $71 billion of (Read more...)