Social licence to operate
Informal acceptance of a company's operations by the local community and wider public, independent of any permits or official approvals.
A company may hold every required permit and still meet opposition that blocks an investment, delays a plant expansion or discourages the local authority from cooperating. The social licence to operate describes what no authority issues: the community's consent to the company's presence and activities.
It is built over years, through predictability, keeping commitments and dialogue, rather than one-off initiatives. It matters particularly for manufacturing sites, infrastructure projects, energy and companies that are among the larger employers in their region.
- early dialogue with residents and local government, before decisions are taken,
- clear arrangements for raising concerns and responding to them,
- honouring commitments, including the small ones.
For the board, the social licence is a real investment risk factor. It is worth assessing before decisions on location or expansion, ideally through conversations with the community and opinion research.
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