Gaining and maintaining social licence to operate

Abstract

Social licence can be defined as the permission by community and key stakeholders underpinning the statutory approval and monitoring of major projects and operations. Due to the rapid growth of the Australian power and energy sector, expansion of exploration activities and increase in the number of stakeholders affected, the need to integrate the social investment dimension with return on investment (ROI) decisions has become an issue critical to efficient program delivery. Public opinion about power projects mainly hinges on how the construction work will affect the environment and community of the local area and how risky the power project is considered once in place. An integrated community and social investment (CSI) program that encourages transparent, socially constructive, environmentally robust and sustainable practices can reduce risk and improve profitability. CSI is presented as a framework for not just encouraging sustainable development, but also mitigating social risks that can have a profound impact on a project’s acceptance, funding and rate of return. This extended abstract documents the business drivers for project-level social investment, CSI lessons learned across multiple project teams within Australia during the past 12 years, and insights into engaging communities in power and energy industry initiatives. The ROI modelling is applied to social licence thinking. Drawing from a series of project vignettes across the water, mining and power and energy sectors, the author discusses some new legal precedents and a framework for approval-centric communication and business planning. This extended abstract provides guidance for companies looking to obtain, maintain or enhance their social licence to operate.