Significance In this report we investigate company–community conflict and its role in the regulation of sustainability performance in the extractive industries. We estimate the cost of conflict to companies and identify conflict as an important means through which environmental and social risks are translated into business costs and decision-making. The paper clarifies the relationship between the environmental and social risk experienced—and interpreted—by local communities, and the business risks experienced—and interpreted—by corporations. Findings reveal that, at least for the case of the extractive industries, these two types of risk can co-constitute each other. The central importance of corporate strategy and behavior for sustainability science is highlighted.

Conflict translates environmental and social risk into business costs