GRI 413 Local Communities
GRI 413 covers an organisation's impacts on local communities — from impact assessments and engagement programmes to incidents of violations involving community rights. For extractive industries, utilities, and infrastructure companies, community relations are among the most material sustainability topics.
GRI 413 covers an organisation's impacts on local communities — from impact assessments and engagement programmes to incidents of violations involving community rights. 413-1 Operations with local community engagement, impact assessments and development programmes: Percentage of operations with implemented local community engagement, impact assessments, and/or development programmes — broken down by type (social impact assessments, environmental impact assessments, community development programmes, stakeholder engagement plans, broad community consultations, works councils, formal grievance processes, FPIC processes).
The two GRI 413 disclosures
413-1 Operations with local community engagement, impact assessments and development programmes: Percentage of operations with implemented local community engagement, impact assessments, and/or development programmes — broken down by type (social impact assessments, environmental impact assessments, community development programmes, stakeholder engagement plans, broad community consultations, works councils, formal grievance processes, FPIC processes).
413-2 Operations with significant actual and potential negative impacts on local communities: Operations with significant or potentially significant impacts — including location and description of the impact. This is a list of your most sensitive operational sites from a community perspective.
Free, Prior and Informed Consent (FPIC)
FPIC is the right of indigenous peoples to give or withhold consent to projects affecting their lands, territories, and resources — before the project begins (prior), without coercion (free), and based on full information (informed).
FPIC is recognised in the UN Declaration on the Rights of Indigenous Peoples (UNDRIP) and ILO Convention 169. GRI 413-1 specifically identifies FPIC processes as a type of community engagement to disclose.
For companies operating on or near indigenous lands — mining, oil and gas, forestry, hydropower — FPIC is increasingly a non-negotiable requirement. Projects that proceed without FPIC face legal challenges, community opposition, and reputational damage that can halt operations for years.
ESRS S3 (affected communities) includes FPIC as a specific disclosure requirement — GRI 413 FPIC data feeds directly into ESRS S3 compliance.
Social licence to operate
Social licence to operate (SLO) is the ongoing acceptance of a company's operations by local communities and stakeholders. Unlike legal permits, SLO is informal — it can be withdrawn by community opposition even if all legal requirements are met.
GRI 413 disclosures are the evidence base for demonstrating SLO. 413-1 shows the engagement processes; 413-2 shows the significant impact sites and how they are managed.
Operations with strong community engagement programmes (413-1 — high percentage coverage) and no significant negative impacts disclosed (413-2 — empty or well-managed list) demonstrate robust SLO management.
For investors: SLO failure is a significant financial risk. Projects delayed or halted by community opposition have caused billions in losses for extractive companies — Newmont's Conga mine in Peru and Vedanta's Niyamgiri mine in India are frequently cited examples.
Frequently asked questions
Does GRI 413 apply to office-based businesses?
Low materiality for pure office businesses. The standard is most relevant for companies with physical operations that directly affect surrounding communities — manufacturing plants, mines, power stations, large construction projects. Office occupiers in city centres generally have low community impact materiality.
What is a social impact assessment?
A formal study assessing the social consequences of a project or operational change on the surrounding community — employment, infrastructure, cultural impacts, health, and displacement risks. Social impact assessments are typically required for major infrastructure projects under national environmental law and are referenced in GRI 413-1.
How does GRI 413 relate to ESRS S3?
ESRS S3 (affected communities) is the CSRD equivalent of GRI 413. Both require disclosure of community impacts, engagement approaches, and grievance mechanisms. ESRS S3 is more detailed — requiring specific metrics on community consultation coverage and grievance resolution rates. GRI 413 data provides the foundation for ESRS S3 disclosure.