Shift released its report Community Engagement, Nature and Financial Materiality (June 2026), drawing on evidence from more than 1,200 cases.
Human Level’s Take:
- What if the financial effects of nature-related risks are actually shaped by community relationships? Across more than 800 cases where social impacts translated into financial effects, Shift shows that the way companies engage with Indigenous Peoples and local communities can influence whether nature-related challenges become sources of conflict or long-term value creation.
- The costs of inaction can be easier to quantify than one might expect. Particularly in agriculture and mining, where land use change and environmental degradation frequently intersect with community concerns, disputes can generate significant costs from operational disruption to litigation and reputational damage. In emerging markets alone, delays linked to community conflict have been estimated at USD 25–40 million per project.
- Thus, nature-related risk management often begins with impacts on people. The evidence highlights the importance of understanding how nature-related impacts affect livelihoods and access to land and natural resources. Communities are often among the first to experience these impacts and the first to raise concerns.
- So what makes the difference? The report points to meaningful engagement. Not as a one-off consultation exercise, but as an ongoing process embedded in decision-making throughout the project lifecycle.
- For businesses, the direction of travel is clear. Shift highlights that high-quality engagement starts early. It is also transparent, inclusive, and responsive to community concerns. Most importantly, it creates genuine opportunities for Indigenous Peoples and local communities to influence decisions that affect them. These practices are not only part of effective engagement, but also an increasingly important component of managing nature-related risks and sustaining long-term project viability.
Some key takeaways:
- Community engagement can shape financial performance: Shift finds a strong relationship between the quality of engagement with Indigenous Peoples and local communities on nature-related issues and financial performance. Drawing on a review of more than 1,200 cases, including over 800 where social impacts translated into financial effects, Shift finds that community opposition linked to land use change, environmental degradation, pollution and resource use can carry significant financial consequences. These can materialise through project delays, operational disruption, litigation, regulatory intervention, security and personnel costs, reputational damage, loss of market access, and higher financing costs. One study cited in the report found that 30% of investors in emerging markets experienced project delays of more than a month due to disputes with local communities, with delays alone costing an average of USD 25–40 million per project. Another found that 28 documented cases of conflict between mining companies and Indigenous communities generated at least USD 31.9 billion in identifiable costs for firms, highlighting how unresolved community grievances can translate into significant operational and financial risks. Conversely, companies that engage early and meaningfully with affected communities are better positioned to identify risks before they escalate, thus securing more stable operating conditions ultimately resulting in more reliable supply chains and overall project resilience. For instance, a survey of 85 agricultural investors in sub-Saharan Africa showed that 90% found social dialogue effective at building community acceptance. Taken together, the findings highlight that how companies engage with Indigenous Peoples and local communities can influence whether nature-related challenges become costly disputes or opportunities for long-term value creation.
- High-quality engagement makes a difference: Land use change and environmental degradation are among the most common drivers of community opposition to nature-related business activities. Across the cases reviewed, concerns often relate to changes in access to land and natural resources, with direct implications for livelihoods and local well-being. Communities also raise concerns about pollution, biodiversity loss and damage to culturally significant areas. Shift finds that these concerns can intensify when affected communities have limited influence over decisions about how land and natural resources are used. In this context, higher-quality engagement becomes an important factor in identifying and addressing concerns early. Such engagement is characterised by early dialogue, broad participation, transparency, responsiveness to community concerns, and meaningful opportunities for Indigenous Peoples and local communities to influence decisions that affect them. Where these elements are present, concerns are more likely to be addressed before they escalate into opposition or conflict.
- Community engagement as a core component of nature-related risk management: Shift highlights the importance of integrating engagement with Indigenous Peoples and local communities into decision-making processes from the earliest stages of project development. This includes identifying potentially affected stakeholders, understanding how nature-related impacts may affect livelihoods and access to natural resources, and creating meaningful opportunities for participation throughout the project lifecycle. The implications are particularly relevant for sectors such as agriculture and mining, which account for a large share of the cases reviewed and where land use change, resource use and environmental impacts frequently intersect with community concerns. Across these sectors, the findings point to the value of moving beyond one-off consultation towards ongoing engagement that is responsive to community concerns and supported by effective grievance mechanisms. Collectively, the findings indicate that companies are better positioned to identify and manage nature-related risks when engagement is treated as a core component of risk management rather than a standalone stakeholder exercise.
