What is meant by social risk? How does it differ
from economic risk?
Social risk can be defined as the risk which is associated with a company on the basis of its actions that can negatively impact the social environment in which it works. There are certain examples of social risk like not giving proper attention to the labor issues and labor rights, violating the human rights in the organization or the practice of corruption on the company. All these lead to negative reactions from the society that hampers the operations of a company.
One more example of social risk can be failing to properly understand the uncertainty related to the political conditions in the area where the company is operating. Frequent changes in the political power or changes in the policies formulated by these authorities can effect the working of the organizations.
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