Social risk identification and management are critical to infrastructure planning and delivery. Having an accurate grasp of social risk factors in infrastructure planning and delivery is part of optimising social value as well as minimising the negative impacts of infrastructure.

I2S’ work in social risk research program represents a world-first and addresses a three-fold challenge, stemming from evidence that: 

  1. community goals and concerns are not always satisfactorily resolved through current infrastructure governance decision-making arrangements; 
  2. the way social value is articulated, and the way social risks are managed, play a major role in project outcomes; and
  3. the current approach to social risk identification management is not as consistent or comprehensive compared to other aspects of risk management (e.g. geotechnical or health and safety), with professionals relying largely on unsystematised knowledge of past experiences, advice from colleagues, and ‘gut feeling’ or intuition. 

There is growing interest in better understanding and managing social risks. I2S is leading research on identifying and managing social risks in the Australian infrastructure sector with the support of its partners and an Australian Research Council Linkage Project (LP210200697).

What is Social Risk?   Social risk is well recognised in the Australian infrastructure sector, but under a range of different guises. In general terms, social risk encapsulates a range of potential or actual harms or hazards that result from social changes precipitated by major infrastructure projects. Under this umbrella definition, the focus points for social risk identification and management shift considerably depending on an organisation’s objectives, socio-cultural context, and past experiences. I2S research uncovered four common and operational ‘understandings’ of social risk in the Australian infrastructure sector, which progress in maturity from basic notions of social risk as business and reputational risk to more comprehensive understandings, ultimately focused on integration and long-term outcomes, including sustainability, resilience and performance. 

Figure 1. Maturity model of four social risk understandings in infrastructure

Source: Henderson, H, Bice, S and Sanchez, E. (2022)

How do social risks materialise?

Social risks manifest because of a range of conditions and factors. Social risk factors refer to an event, characteristic, condition, behavior, phenomenon or activity (such as dust, water pollution, damage to indigenous cultural heritage) related to an infrastructure project that increases the probability and severity of an adverse effect upon something of social value (Aven and Renn, 2009; Liu et al, 2016; Bowles 2011). Social value refers to economic, societal and environmental wellbeing in connection with major infrastructure projects. Well known examples of social value frameworks include the UN Sustainable Development Goals (SDGs).

Figure 2. Social risk development during infrastructure planning and delivery

Source: Institute for Infrastructure in Society ARC Social Risk Research Team, 2023.

Why improve Social Risk Identification and Management?

There is growing concern for improving social risk identification management as part of the overall picture of infrastructure decision-making, planning, governance and delivery. In essence, the drivers relate to a concern for closer attention to the social value proposition of infrastructure to society and the role of social considerations in due process. I2S research has uncovered several overlapping factors driving:

  • increasing project magnitude and accelerating delivery pace: Although this situation is fuelling a general maturation in risk governance, it has also added pressures partly through fast-tracking and streamlining, with flow-on effects for community engagement and risk management.
  • prevalence of systemic risks: Systemic risks—externalities and uncertainties that may spill-over into projects—may be reinforced by or interact with major projects, making their consideration important to project outcomes.
  • cumulative effects: Cumulative project effects are contributing to fatigued and less trustful communities, both from the ongoing presence of construction as well as delayed, disjointed or inconsistent community engagement, from a place-based perspective. Cumulative project effects are exacerbated by a current context of continuing health, economic and geopolitical uncertainties. 
  • potential to generate positive outcomes/social value: Managing social risk can contribute to the creation of social value and support positive development outcomes, including alleviating poverty, supporting social cohesion and reducing inequalities.
  • intensified awareness of the financial and political costs of unmanaged social risks: The impact of poorly managed social risks is progressively acknowledged in terms of financial and political costs for government, developers and contractors.
  • role of social outcomes in investment and insurance decision-making: Investors and insurers, especially those with a SRI (socially responsible investment) or ESG (environment, social and governance) focus, are considering social risks within their analyses. These practices are influenced largely by international frameworks (e.g. World Bank ESF, Quality Infrastructure Investment principles, UN SDGs).
  • recognition that social risk management is an emerging specialisation: Social risk management remains in early-stage development. There are areas where the process can be improved in line with good governance practices and where it can better incorporate qualitative approaches to deal with complexity of issues and plurality of stakeholders. The specialisation requires robust models to support assessment and also needs integration with more traditional risk management approaches.
  • community interest in infrastructure projects: As the scope and scale of projects grows, so too do communities’ interests to understand the projects being delivered in their local areas, to see the overall planning picture and to be engaged about projects relevant to their daily lives.

A framework for action: The 3P Checklist of Social Risk Factors

Precursors of Social Risk: The 3Ps

Social risk profiles of major infrastructure projects are related to multile conditions and factors. Through I2S, we have grouped Social Risk Factors into three groups, including:

  1. Place-based considerations (place and community)
  2. Project-related factors; and
  3. Proponent and process-related factors.

Figure 3. Social Risk Factors 3P Checklist for Infrastructure Project Planning

Source: Institute for Infrastructure in Society, ARC Social Risk Research Team, 2023.

Our research strategy and methods:

Our research and development process has involved:

  • Discussion and co-design, including framework testing and adjusting, through our Social Risk Working Group with experts from academia, governments across Australia, independent consultants, peak body representatives and the private sector (2020-ongoing.
  • An international literature review (2022-ongoing).
  • 25 interviews with industry experts in risk management and infrastructure in Australia and globally (2021)
  • “Empathy mapping” workshops with infrastructure sector professionals (2022)
  • Delphi Technique (2023-24)
  • Australian Perspectives on Infrastructure Survey of over 5,000 community members (2021);
  • Series of professional surveys on the State of Infrastructure and Engagement in Australia (2018-2023)

Interested in getting involved? Want to stay in touch? Drop us an email or sign up for our quarterly Research Insights e-news, here.

Contact Chief Investigators Prof Sara Bice, Prof Helen Sullivan or Dr Hayley Henderson for more information about our social risk research and application in practice.