Strategic social investments as shared value for communities and companies

Local community expectations of international companies are growing worldwide. While companies aim to meet social performance standards to secure a social licence to operate, going beyond those standards is increasingly expected. RSK International Projects Group (IPG) Senior Social Consultant Ian Granit assesses how to navigate social investment against this backdrop of increasing expectations from clients, investors and communities

Inclusive and well-planned strategic social investments can help meet community expectations and ensure a positive impact within and beyond the company’s area of influence. Failure to meet expectations has, in the past, led to protests, shutdowns of construction or operations and long-lasting legacy issues. At the same time, poorly planned or top-down social investment strategies have often failed to deliver intended benefits and, in some cases, have caused more harm than good.

For companies that have already developed environmental and social impact assessments, resettlement action plans, livelihood restoration plans or similar, a social investment programme might seem unnecessary. In today’s business environment, many companies want to go further, not just to meet environmental, social and governance (ESG) expectations but also because they recognise that contributing to the local area is part of doing responsible business.

Increasingly, governments and clients require companies to commit to social investments as part of being awarded a licence or entering into a host government agreement. A clear programme also helps align requests, responses and expectations with communities and authorities. Beyond formal requirements, social investments can also help:

• improve relationships with communities and other stakeholders
• strengthen a company’s social licence to operate
• attract and retain employees
• set the company apart as genuinely committed to responsible practices.

From the community’s perspective, the argument is straightforward. If a large project is going to affect their land, livelihoods, environment or way of living, they expect to share some of the benefits. Companies that shape contributions in a responsive and practical way tend to keep relationships constructive and operations more predictable.

Considering the significance of these projects to the communities they are designed to serve, it is important that social investment programmes don’t end up being a waste of resources; a school and clinic built without staff or houses that aren’t maintained don’t deliver on their objectives. If a project is driven from the top, with little community involvement or alignment with local priorities, efforts can damage trust instead of building it.

Instead, a balanced portfolio that includes both capacity building and infrastructure support increases community acceptance and long-term viability. This must be done by bringing local partners into design and delivery, which reduces the risk and improves maintenance prospects.

Developing a strong social investment strategy

The International Finance Corporation’s Strategic Community Investment: A Good Practice Handbook for Companies Doing Business in Emerging Markets is a useful reference when developing and implementing effective social investments. There are seven key steps to ensure the process is inclusive, practical and aligned with both business goals and community needs and generates the greatest benefit possible from available funds.

1. Link it to the business
   A social investment programme works best when it is connected to the company’s business goals. That way, there is a clear purpose, stronger internal support and better coordination across teams. Placing the social investment programme within the project’s environmental and social management system means it moves with the same rhythm and can benefit from other day-to-day project activities such as stakeholder engagement. This approach keeps mitigation responsibilities and voluntary benefits clear and helps avoid mixed signals.
2. Understand the local context
   All local contexts differ; local realities such as history, politics, conflict dynamics or cultural norms matter. If these are not properly understood, the company risks designing something that does not work or, worse, causes harm. Context also includes the way delivery partners work; development actors and corporate teams often follow different incentives and timelines, so recognising this early helps everyone plan better.
3. Engage the community
   This is one of the most important steps. Communities need to be involved early and meaningfully in identifying priorities. That includes listening to their ideas, building on existing assets and letting them shape the future they want. A structured community needs assessment helps turn a long wish list into a short set of shared priorities.
   An important part of community engagement is managing expectations. Communities sometimes assume that a multinational company will solve every problem. To manage any expectation, it is important to engage not just communities but also local government, development actors and others to help communicate realistic outcomes that also meet needs. Having a clear strategy also helps manage incoming requests for support by providing a consistent framework to explain what is and is not possible.
4. Focus on existing and potential capacity
   It is tempting to invest in something visible, such as a school or a clinic. But without plans for how it will be staffed or maintained, it risks becoming a ‘white elephant’. Any social investment strategy that focuses on hard infrastructure should be combined with capacity building, helping people develop the skills to run and sustain what is built.
   It is also important to respond to what communities ask for. A new building might feel valuable, but communities may see training in business skills or learning a new craft to be more valuable to them.
5. Set clear parameters
   Companies need to set boundaries on what they will support based on clear investment areas, goals and budgets. This avoids confusion and makes it easier to respond consistently to new requests.
   Equally important is planning for the end; every investment should have an exit or handover strategy so that local partners and communities can take over and continue the work. Design within a fixed budget from the start, publish the selection criteria and plan the handover from day one.
6. Establish implementation methods
   Many companies need to partner with local development agencies or non-government organisations (NGO) to implement their social investment strategy. Working with local NGOs or development organisations brings in expertise and trusted relationships. But partnerships need to be chosen carefully. Implementation for social investment rarely mirrors construction contracting. Delivery often runs through local NGOs or development advisories rather than engineering, procurement and construction (EPC) contractors, so procurement needs to fit the way these organisations work. This means treating capacity and mobilisation as real tasks. Many partners recruit after award and may need to procure basic equipment, which means contracts must build in sufficient time and budget to accommodate this.
   The team will also likely need to refine their scope of work on the ground, since progress should be judged on local outcomes, not only milestone targets. Strategic agreements with large international organisations can offer administrative ease and visibility. When programmes require context-specific results, a capable local partner often offers a better fit and stronger community ownership.
7. Track and adapt
   The final step is measuring progress and staying responsive. That means starting with a baseline and setting indicators to measure impact over time. But numbers alone are not enough; it is also essential to keep an eye on community perceptions, what is working, what has changed and whether expectations are being met. That is what helps keep trust intact and allows the company to adjust course when needed.
   Track a small set of outcome indicators and keep the baseline live with regular checks. Combine participation data with short perception surveys and feedback from grievance channels. Hold a brief review after each funding cycle and record what helped and what hindered progress. Use that note to continue, adjust or close activities.

Achieving effective social investment

Strategic social investment is not about ticking a box or donating funds. It is about building relationships, understanding the context and creating shared value. When grounded in reality and designed with communities, it can support long-term business success while making a real difference on the ground. When partners have time and budget to recruit and mobilise, early delivery is steadier and community uptake is stronger. When local implementing partners are treated as problem-solvers rather than fixed-scope contractors, necessary corrections on the ground happen sooner and at lower cost.