Social licence is key to Australian business survival

  • The term social licence is the level of acceptance or approval that stakeholders and communities extend to a project, site, company or industry.
  • The term will soon be much more common, as it will be enshrined in the next ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations.
  • High quality stakeholder relationships are central to success in building your company’s social licence.

Businessman looking up at green trees

The topic of social licence has transformed over recent years from a metaphor for good community relations in the mining industry to a term widely used in many industries. It is a term used regularly by our prime minister to talk about expectations of banks and gas companies, in particular.

The phrase ‘social licence to operate’ was coined in 1997 by a mining industry sustainable development executive called Jim Cooney, in discussions with the World Bank. He used the term as a metaphor to bring attention to the difference between a legal permit to mine and the social acceptance of a project.

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