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Impact Assessment and Sustainability in the extractive Industry

This article gives an initial introduction to the concept of impact assessments.

This article will provide a general introduction to impact assessment and highlight how specific challenges can be approached and by using coherent environmental and socio-economic impact assessments.

First, we want to highlight some key points about impact assessment, specifically the established environmental impact assessment (EIA). EIA approaches have been codified in international and national legislations and usually contain social and economic aspects as well. However, more specific social and economic impact assessments have not been taken up to the same extent.

We will briefly introduce the widely accepted elements of environmental impact assessments. Specific approaches and suggestions for social and economic impact assessments will be highlighted throughout this week.


The success of EIA is underlined by the fact that it so well represents the global ideals of sustainable development, and indeed, EIA has been closely aligned with the sustainability concept since the Rio Declaration in 1992. In the past decades, the EIA approach has spread globally and been successfully adapted to many different governance contexts. Even though national requirements for EIA can vary, there are common elements present in every EIA approach.

Firstly, it is an interdisciplinary process which serves to address a variety of topics, prevent issues and resolve challenges on different fronts. It should be noted that even though the process is called ‘environmental’ impact assessment, the scope of ‘environment’ also includes social, economic and cultural impact. Thus, we will speak of ‘Impact Assessment’ during this MOOC – which is aligned with the SUMEX focus area of ‘Environmental and Socio-Economic Impact Assessment’.

Impact Assessment in Europe

From a European governmental perspective, improving the environmental impact assessment process tends to be through introducing more public consultation opportunities and making the process applicable to a broader range of projects. There has been a push recently for improving the assessment of social impacts as the effects of extractives projects on local communities, be they adverse or beneficial, tend to be minimized in the EIA. Although EIA is well established in Europe, social assessments are often reduced to oversimplifying descriptions of an area and people’s attitudes without a sense of the local development and history and analysis of possible impacts (Sairinen, 2022). An emerging approach is to define and consider social capital in additional to natural capital.

Key guiding questions

In order to examine Environmental and Socio-Economic Impact Assessment in more depth, let’s introduce our three main guiding questions for this week:

What are the major challenges industry and policy-makers face in ensuring EIA is used more effectively to promote sustainability?

As mentioned above, EIA also consider social and economic aspects, but there is no clearly defined approach on how this is done. Therefore, the social and economic impacts receive less attention than the environmental impacts. The social impacts however, are equally as important in receiving the Social License to Operate for an extractive operation. Below, we will highlight the approach of Social Impact Assessment that tries to solve this lack of attention on social effects in order to make impact assessments more holistic in their scope.

The Social Impact Assessment (SIA) is defined as including the processes of analysing, monitoring and managing the intended and unintended social consequences, both positive and negative, of planned interventions (policies, programs, plans, projects) and any social change processes invoked by those interventions (International Association for Impact Assessment). SIAs are done to understand how a proposed action will change the life of residents, communities and regions; to help communities benefit from or adapt to the changes a project may bring; and they help in developing mitigation and compensation measures and monitoring and impact management plans (Sairinen, 2022).

While SIA is used primarily as an impact prediction mechanism and decision-making tool in regulatory processes, there is also an acknowledgement of the importance of the role of SIA in contributing to the ongoing management of social issues throughout the whole project development cycle, from conception to post-closure (Vanclay, F. et al., 2015). This underdeveloped role of SIA is the link between how the impact assessment process is currently conducted in Europe and how it should be conducted in the future to promote sustainability. This is how the SUMEX framework envisions future impact assessments to be conducted.

What are natural and social capital – and how can they be integrated into socio-economic and environmental impact assessments?

Another interesting approach towards effective environmental and socio-economic impact assessments is the concept of natural capital and social capital. Natural capital is defined as the world’s stocks of natural assets which include geology, soil, air, water and all living things (Natural Capital Forum Unlike natural capital, there is no widely accepted definition of social capital. One definition is that it is a collective asset in the form of shared norms, values, beliefs, trust, networks, social relations, and institutions that facilitate cooperation and collective action for mutual benefits (Bhandari, H. & Yasunobu, K., 2009)).

An effective method to include natural and social capital into impact assessment is the Canadian approach entitled ‘Valued Components’ (VC) approach, which is used in Canada, specifically British Columbia (BC) to conduct impact assessments. For the purpose of environmental assessment in BC, Valued Components are defined as components of the natural and human environment that are considered by the proponent, public, Aboriginal groups, scientists and other technical specialists and government agencies involved in the assessment process to have scientific, ecological, social, cultural, archaeological, historical or other importance. Similarly, the Canadian Environmental Assessment Agency defines Valued Ecosystem Component as “the environmental element of an ecosystem that is identified as having scientific, social, cultural, economic, historical, archaeological or aesthetic importance” (CEAA).

Environmental assessment in BC uses a values-based framework to assess the potential effects of a proposed project. The framework relies on the use of VCs as a foundation of the assessment. VCs focus environmental assessments on those aspects of the natural and human environment that are of greatest importance to society. Using VCs improves the effectiveness and efficiency of assessment by helping with the selection of appropriate assessment methodologies and specifying the issues that should be the center of the analysis.

How to arrive at a more holistic approach to EIA that includes social impacts and considers immediate and long-term impacts?

Making the extractives industry more sustainable, first and foremost, is about a company’s behavior, whether a potential project is accepted by those living in the area, and if it is, how it is implemented and how the impacts are dealt with. Integrating these questions into a coherent management process allows the incorporation of tools that promote sustainability in different ways and on different levels, as illustrated in the diagram below (Sairinen, 2022).

A graph explaining the different stages of a social impact assessmentClick to expand

Which suggestions do you have to improve the methodology and implementation of impact assessment for sustainability?

What are important regional differences in this regard, within Europe and beyond?

Please share your thoughts below.

© SUMEX project
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Sustainable Management in the Extractive Industry

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