Climate & Environment
Social Risk
Definition
Social risk is the potential for negative consequences to people and communities — workers, neighbours, indigenous peoples, consumers, supply chain labour — arising from an organisation's operations, projects or value chain, together with the consequential risks to the organisation itself: licence revocation, protest, litigation, reputational damage and project failure. It is assessed through social impact assessment, human rights due diligence and ESG risk frameworks.
References
This reference provides supporting context for how “Social Risk” is defined and used.
Source imported for editorial provenance.
Overview
How it is used
The concept structures project finance screening, enterprise risk management, supply chain risk mapping, and materiality assessments in sustainability reporting.
Why it matters
Social risk is where ethics and self-interest converge — the reason "people issues" sit on risk registers rather than only in CSR reports.