The term will soon be much more common, with stock markets enshrining it in Corporate Governance Principles and Recommendations. With many institutional and other investors now understanding the increasing importance of Social Licences in long-term performance, it is an area few companies can afford to ignore.
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. Our political leaders currently use it to discuss the expectations of banks, manufacturers, energy, and resource providers.
The Social License for companies to operate comprises three components: legitimacy, credibility, and trust.
Legitimacy is the extent to which a company plays by the 'rules of the game'. That is, the norms of the community, be they legal, social, cultural, formal, or informal.
Credibility is the company's capacity to provide accurate and precise information to the community and fulfil any commitments made.
Trust is the willingness of the public to be vulnerable to a company's actions. A high-quality relationship takes time and effort to earn and must be maintained.
Social Licence is as much about showing progress as demonstrating results. Social Licence is especially valid for issues related to climate action and managing more equitable supply chains.
Like most licensing forms, social licensing needs to be earned and maintained. As visibility and awareness of environmental, social, and ethical practices of businesses operating in a global environment increase, the standards of social licencing will continue to increase across all sectors.
Online newsrooms allow you to tell a more nuanced story of why you've earned your Social Licence and how you are committed to maintaining the public faith. An online newsroom lets you directly deliver these stories to traditional and citizen journalists through organic searches. An online newsroom also allows your company to provide other resources to backstop and reinforce the credibility of your accounts.
An image of a polluted water source, child labour, and environmental degradation can cut through the media cycle and undermine all the efforts brands and businesses have made to establish a Social Licence.
The opposite is also true. A visual narrative showing positive change and the impacts of your business commitment to communities can connect you with even the most cynical journalists.
It is easy for a journalist to ignore a single or even multiple Press Releases on the positive contributions you're making. It is much harder to do if you've developed an entire library of stories and content demonstrating a more profound and more far-reaching impact that you're having on setting new standards for your sector.
The challenge for businesses operating with global supply chains is that you may not have visibility around every aspect of your operations, even though communities expect you to. Bad actors can undermine your social license in seconds. However, suppose you can instantly demonstrate to a journalist that you have a documented history of doing the right thing and that you're taking immediate action to rectify the problem and ensure the breach of trust will never be repeated. In that case, you have a greater chance of maintaining or even enhancing your Social Licence. To respond in real-time, with even journalists you have no existing relationship with, you need an advanced online newsroom like Lookatmedia™.
