What If Your Impact Assessment Is Missing Important Risks?

Our experience with a tourism project in an indigenous fishing community in Colombia illustrates how a project can be thoroughly assessed and still be poorly understood. Conventional assessments are optimized for certain kinds of information and may fail to fully capture or address relational and systemic dynamics, such as power relations, historical grievances, relationship dynamics, and changing social identities. These dynamics matter because they can determine how social and economic impacts emerge and amplify, affecting project outcomes. To address these blind spots, we propose a three-pronged framework based on capturing, interpreting, and acting on relational and systemic dynamics.

Colombia, Caribbean coast: An international corporation conducts an impact assessment for a planned tourism project at a beach on the land of an indigenous fishing community. The impact assessment identifies many social and environmental impacts, from workers’ rights and wages during construction to potential biodiversity impacts on nearby coral reefs due to the anticipated influx of tourists, as well as corresponding mitigation measures. It also mentions that the community largely resists the tourism project because of deep-seated distrust of external actors and concerns about losing aspects of its way of life. However, it does not translate these findings into mitigation measures, leaving them unaddressed in the final report.

This is not an isolated incident or limited to projects on indigenous people’s land. In fact, the difficulty of capturing and addressing certain dynamics occurs in many impact assessments with very different corporate or civil society activities, such as activities involving migrant workers or those taking place in post-conflict societies, informal settlements, or peasant communities.

In this reflection, we argue that these blind spots in impact assessments mostly relate to “systemic” or “relational” dynamics. The blind spots consist of information that was never collected, recorded without being recognized as significant, or recognized as significant without being translated into action. We examine why these blind spots arise and what happens when they remain unaddressed. We conclude by proposing three questions organizations can ask to capture, interpret, and act on findings about relational and systemic dynamics.

Although this reflection focuses on impact assessments, the same blind spots and questions are relevant in broader human rights, ESG, social, or project risk assessments.

What Are Typical Blind Spots of Impact Assessments?

Impact assessments do not necessarily measure the “wrong” things. They are often very good at measuring what they are designed to measure. This includes what is readily quantifiable and measurable: environmental indicators related to changes in pollution levels, water temperature, or biodiversity, economic benefits, wages, working hours, as well as infrastructure, health and security impacts. These impacts are all important but may not reveal the full picture.

In fact, many of the dynamics that determine whether a project succeeds or encounters resistance are relational and systemic in nature. They manifest before, during, and after the project start and include:

• Changes in power
• Relationship dynamics
• Dependency
• Social cohesion
• Cultural practices and changing social identities
• Historical grievances

These relational and systemic dynamics are not simply additional conventional social impacts. They are the underlying or overarching processes through which other impacts emerge, develop, and amplify. They are harder to capture through impact assessment methodologies because their relational and systemic nature makes them difficult to assess. Their identification depends on context, relationships, and the interaction of different findings. And even when impact assessments make note of these dynamics, the challenge is to interpret and translate the impacts into mitigation measures.

The example of the Colombian fishing community illustrates this point. The impact assessment recorded the number of community households to be relocated and vacate space for the tourism project. However, the anticipated start of the project has generated a negative dynamic in the community: Several families have already moved to a nearby city for fear of being displaced. This has made the remaining families lose social connections and has weakened community cohesion. As a result, remaining community members have become resentful about possible changes in their traditional way of life, which has increased distrust in the tourism project and intensified their opposition to it. Thus, while the impact assessment captured the necessity of displacing the community, it did not assess the anticipation of displacement and the social impacts resulting from it before the project has even started.

Why Do the Blind Spots Occur?

Marginalizing relational and systemic dynamics in impact assessments reveals several underlying assumptions of standard assessment approaches. The most important assumptions include the following ones:

Focusing on compliance: Conventional impact assessment methodologies often have an upward focus. This means they prioritize satisfying investors, regulators, corporate headquarters, and auditors. Many impact assessments operate within a compliance-oriented framework, which can place greater emphasis on demonstrating that prescribed requirements have been met than on developing a comprehensive understanding of project risks.

Prioritizing quantifiable data: Assessment approaches often prioritize easily quantifiable data because such information can be compared against benchmarks, incorporated into scoring systems, and presented in standardized formats. Impact assessments may also be carried out under time pressure, which makes the reliance on quantitative data more convenient.

Downplaying relational and systemic dynamics: Once an impact assessment needs to convert diverse findings into standardized categories, significance ratings, risk matrices, and mitigation tables, factors that are difficult to define or score can gradually lose their weight. The German language has an eloquent term for this: “wegdokumentiert” – something that is technically documented but effectively disappears through documentation.

Isolating impacts: Conventional assessment frameworks often divide impacts into specific categories. This makes them easier to assess and assign responsibility for individual impacts but can obscure how impacts interact and reinforce one another.

Simplifying complexity: Impact assessments need to turn complex reality into categories, significance levels, mitigation measures, responsibilities, and timelines. This is necessary to create structure. However, the process of making complex real-world dynamics manageable for organizations can also remove the relationships between them and render them invisible in the standardized assessment systems.

Why Does Measuring Blind Spots Matter?

When impact assessments fail to capture relational and systemic dynamics or relegate them to a marginal role, organizations may face negative operational, commercial, and reputational consequences:

Poor decisions: Organizations may not understand the actual risk environment and make decisions based on an incomplete picture of project risks. They may overlook the dynamics that can become pathways through which opposition escalates, relationships deteriorate, mitigation becomes ineffective, or projects face delays.

Ineffective mitigation: Organizations may spend substantial resources mitigating measurable impacts while leaving the underlying drivers of conflict unaddressed. This also explains why a project can have mitigation measures for every individual impact while still producing a disastrous overall outcome.

Project consequences: Without an accurate understanding of the risks involved and their operational consequences, organizations may experience project opposition, delays, increased security costs, withdrawal of investors and partners, reputational damage, and potentially even project cancellation. They may also need to conduct additional consultations or redesign the project during implementation.

Thus, the question is not necessarily whether an organization can be held legally responsible for failing to identify a particular relational or systemic risk or design appropriate risk mitigation measures, but whether the organization can make sound decisions based on a sufficiently accurate understanding of the risk environment.

How Can Organizations Mitigate the Risk of Blind Spots?

We propose a framework based on three pillars: Capture, Interpret, and Act. The following three questions address each of these pillars and provide an initial framework for analyzing how the impact assessment addresses relational and systemic dynamics. The purpose of this framework is not to create a universal list of such dynamics but to examine whether an assessment process is capable of capturing, interpreting, and acting on them.

Capture: Does your assessment methodology capture relational and systemic dynamics?

Look at the impact assessment’s scope, questions and templates, impact categories, stakeholder methodology, cumulative and indirect impacts, and contextual analysis.

In other words: What tools does your assessment methodology use to identify relational and systemic dynamics?

In the Colombian case, the impact assessment identified the community’s distrust and concerns about social and cultural change but did not fully capture the broader relational and systemic dynamics underlying these concerns.

Interpret: Can your impact assessment interpret what stakeholders are telling you?

Analyze how the impact assessment engages with different stakeholders, what type of information is recorded, and how their statements are documented, weighted, and understood after data collection.

In other words: Does the assessment merely document what stakeholders say, or does it analyze what their statements reveal about power, history, dependency, social cohesion and project acceptance?

In the example of the Colombian community, the impact assessment documented the community’s opposition to the tourism project due to distrust in external actors and fear of losing their way of life. However, the assessment did not fully interpret how these dynamics were already manifesting and amplifying the community’s resistance to the project. It failed to interpret the information in light of its implications for social practices and identities, power relations, and the tourism project itself.

Act: Can findings about relational and systemic dynamics influence the project?

Assess whether the risk registers, mitigation plans, decision-making processes, monitoring mechanisms, as well as organizational and project governance address findings on relational and systemic dynamics.

In other words: Where is the finding visible after the assessment is complete?

In the Colombian example, the company did not act upon the identified relational and systemic dynamics. The assessment’s finding about the community’s distrust in external actors did not lead to any measures or changes in project design.

Conclusion

Impact assessments need to capture, interpret and act on what we call relational and systemic dynamics because these are the overarching processes through which other impacts emerge, develop, and amplify. They may shape approvals and oppositions to projects and have operational, commercial, and reputational impacts that organizations need to address.