How does the IFC define "social risk" in projects?

The IFC defines "social risk" in projects as risks related to community rights, health, and safety. This definition encompasses various aspects that affect communities directly, such as the impact of a project on local populations, their rights to land and resources, as well as their health and well-being. Understanding social risk is crucial for project developers and stakeholders because it helps ensure that projects do not negatively impact the lives of individuals and groups in nearby communities.

By identifying and managing these social risks, projects can foster greater community engagement and support, leading to more sustainable outcomes and helping to avoid potential conflicts or disruptions. This focus on community welfare and rights underscores the importance of integrating social considerations into project planning and execution to achieve broader development goals.

The other choices address different aspects of project management that, while important, do not capture the essence of social risk as defined by the IFC. Risks related to project budget or corporate governance focus more on financial and managerial aspects. Environmental factors, while crucial, fall under a different category and do not encompass the social implications outlined in the IFC's definition.