TMP

Date

2019-2021

Overview

We analyzed the financial impact of conflicts between companies and local communities in the African agriculture sector. Our study compared the costs of these conflicts with the cost of investing in risk mitigation measures. Through interviews with over 80 companies and investors, and a detailed financial model, we quantified the impact of delays due to conflict on the net present value of projects. Additionally, we conducted an analysis of commercial, social, and environmental (CSE) risks in the palm oil supply chain, finding that RSPO-certified mills generally face lower social risks than non-certified ones.

Key results

Major companies like Unilever, Schroders, and Swiss Re, along with development finance institutions, have supported our work on land use and social risks. This has led many companies to reconsider their social risk assessments and investment strategies. Our research helped elevate social risks and community engagement to a higher priority in corporate decision-making.

Lessons learned

Engaging with local communities can be a cost-effective way to prevent financial losses and delays. However, many companies still rely on inefficient methods for managing social risks. Group communication tools, such as WhatsApp, have proven highly effective for maintaining contact and managing these risks.

Evaluation

The project received an A+ rating from the UK Government (FCDO).

Partners

• Rights and Resources Initiative (RRI)
• ODI (UK Think Tank)

Funder

• UK Foreign, Commonwealth and Development Office (FCDO)