Social License
When interests align, consensus emerges.
What is a Social License?
It is the legitimacy a company gains from society to operate, based on the ongoing support and trust within the local community and other stakeholders
The Social License is intangible unless methodologies are applied to measure the beliefs, opinions, and perceptions surrounding the project. It is dynamic and non-permanent, evolving over time. It has to be earned and then maintained.
Why is it key?
The Social License is essential for ensuring the financial profitability and operational viability of any project. Without community support, risks increase, and authorizations may be delayed or revoked.
Properly managing the interests, needs, and expectations of the host community is vital to creating a favorable environment for the project throughout all its lifecycle.
How is it achieved?
When a company operates in a territory, it must adapt to an often unfamiliar context governed by different norms and practices.
For the project to succeed, understanding the local environment and taking a proactive approach using active listening and engagement methods is crucial. This builds the necessary trust for the relationship to flourish and strengthen over time.
What are the economic benefits?
The economic benefits encompass everything the project generates since, without a Social License, the project may fail. What is clear is that it increases the economic value of projects and the generated electricity by ensuring resilience, competitiveness, and sustainability.
Additionally, it can enhance the positioning of bids and projects in competitive selection processes, such as tenders or auctions.
What other benefits does it have?
Risk Reduction:
Minimizes conflicts, delays or denials of permits, financial losses, added costs, and legal actions.
Improved Reputation:
Effective Social License management builds credibility for the company, not only within the community but also in the broader market. This leads to greater trust, which translates into better business opportunities, including access to financing, finding off-takers, attracting and retaining employees, forging partnerships, and facilitating M&A transactions.
Community Involvement in the Project’s Success:
If the project adds value and gains community support, the community becomes its greatest advocate, defending it against external interference.
Preferential Positioning:
Differentiates the project from others and reduces political risk.
Fosters Innovation and Sustainability:
Local contributions can lead to innovative ideas and approaches, aligning projects with community needs and steering them toward the common good. This enhances the investment’s positive and lasting impact on the territory and society.
How to determine the level of Social License for a project?
It is essential to engage with the territory and gather accurate and non public information from all directly or indirectly involved parties to evaluate the level of legitimacy the project has.
The involvement of a neutral third party with strong communication skills and expertise in interpersonal relationships creates ideal conditions for transparent and productive exchanges.
Using the collected information, social indicators are applied to make the Social License level tangible and measurable. This leads to a diagnosis that is fundamental for decision-making and establishing strategies to ensure success.
sociallicense.energy possesses the expertise, methodology, and tools to carry out this process. We are here to support your project. Contact us!