By Rikard Scoufias, RR Senior Advisor, Non-Executive Chairman of HEREMA and former CEO, Trans-Adriatic Pipeline.
Note from RR: our network of senior advisors, experts and mediators includes leaders and practitioners from both the corporate and non-corporate worlds. This means that we are able to draw on the different perspectives of the private sector, civil society and international diplomacy, and ensure balance in all our work. The article below, authored by one of RR’s senior advisors with a private sector background, presents trust building – a key driver of conflict resolution – from a primarily corporate perspective. Future bulletins will address this question from other perspectives.
In sectors like natural resources, energy and infrastructure, where political, environmental, and social stakes run high, trust is often described as a critical success factor. It is praised in mission statements, embedded in ESG frameworks, and highlighted in board-level conversations. Most leaders agree that trust matters.
However, few incorporate it as a line item in risk-adjusted investment planning. Trust is notoriously hard to quantify and, as a result, remains one of the most undercapitalised assets in project delivery and investment risk management.
And yet, while it may be hard to measure the presence of trust, it is not difficult to count the cost of its absence. Stakeholder resistance, injunctions, permit withdrawals, and reputational backlash are not abstract ‘risks’ – they are among the leading causes of capital loss and execution delay in major projects globally.
The real cost of distrust
Especially in politically and socially sensitive environments, distrust can derail even the most technically sound projects. Several global studies have explored this phenomenon. Drawing on these and broader sectoral observations, it is reasonable to estimate that stakeholder-related disruptions occur in at least 30-40% of cases – many of which result in cost overruns averaging 20-30% of total capital expenditure. This may even be a conservative estimate.
“Lack of trust is a leading cause of capital loss and execution delay in major projects worldwide”
Of course, correlation does not imply causation: absent trust is not the only possible cause of project delays. Low-trust environments are often also characterised by weak governance and limited institutional capacity. Nonetheless, the association between trust deficits and project failure is strong enough to warrant proactive attention – and deeper debate.
This is more than an academic insight. The disconnect between rhetoric about trust and actual investment in it creates a recurring blind spot – one that plays out repeatedly in the form of failed social licence, spiralling opposition, or regulatory collapse.
Can we reframe trust as risk mitigation?
To close this gap, can we reframe trust not as a soft or reputational issue, but as a quantifiable execution risk – and a strategic asset worthy of direct capital allocation?
Rather than treating trust-building as a discretionary activity, forward-looking projects are beginning to treat it as a risk offset strategy.
The logic is simple: if stakeholder disruption creates material probability of capital loss, then targeted investment in social alignment, local legitimacy, and political confidence should be assessed the same way any other mitigation strategy – based on the likelihood and impact of the risk, and the return on investment of the intervention.
To follow this through: if a hypothetical project faces a 30–40% probability of major stakeholder disruption and the cost of such a disruption is estimated at 20–30% of total capex, then expected capital at risk is anywhere from 6-12%. For a billion-dollar project, this would equate to a potential NPV reduction of $60-120 million. A proactive investment in trust-building equivalent to 10–15% of that capital at risk — in this case $6-18 million — would represent a highly efficient hedge.
From soft diplomacy to hard arithmetic
Adopting such an approach requires a shift in mindset. It means moving away from reactive, compliance-driven stakeholder engagement and towards a model of strategic investment in legitimacy. It also demands fluency in two languages: the language of capital and the language of community.
Critically, it also means applying hard-dollar thinking to what is traditionally treated as intangible. That includes:
- Estimating the cost of inaction by benchmarking stakeholder failures in similar projects;
- Quantifying the value of trust and alignment with stakeholders to insurance premiums, political stability, and capital cost; and
- Viewing stakeholder trust as a precondition for project execution, not a peripheral benefit.
“For corporate leaders, effective trust management demands fluency in two languages: the language of capital and the language of community”
Projects that have applied this mindset have seen measurable results: community resistance diminishes, political support increases, permitting processes stabilise, and reputational resilience improves. In Greece, for example, the Trans Adriatic Pipeline achieved over 95% community approval across the 32 municipalities it crossed — setting a benchmark for trust-building with affected stakeholders in complex infrastructure delivery. The project was completed on time and is now fully operational. In an era where contested projects increasingly stall or collapse, such outcomes should not be taken for granted.
A new playbook?
For leaders considering high-stakes investments in fragile or contested environments, several principles emerge:
- Treat trust like capex. Not as an afterthought, but as an operational necessity.
- Model the cost of its absence. Trust is diffcult to quantify, but its absence leaves a measurable trail.
- Frame trust as risk offset. Avoid packaging it as just ESG; it’s a strategic investment with real ROI.
- Invest early. Once opposition surfaces, it’s often too late. Prevention is more effective than crisis response.
- Tailor to context. Gather data. Empower local actors, build coalitions, and avoid top-down narratives.
About the author:
Rikard Scoufias is a Senior Advisor to Resource Resolutions and is an expert in corporate diplomacy and inter-cultural management. He has helped organisations navigate complex governance, stakeholder, and political risks across regulated and emerging markets on five continents. He is currently Non-Executive Chairman of HEREMA, a European national energy company. Previously, Rikard was CEO of the Trans-Adriatic Pipeline (TAP) and Head of Corporate & Government Affairs at bp. He is a former board member at Chatham House, founding member of the EU’s climate change panel, and member of the Harvard Business Review Advisory Council.
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