Social Licence to Operate
Definition
Social licence to operate (SLO) refers to the ongoing acceptance and approval of an organisation's activities by its stakeholders and the broader community. Unlike formal regulatory permits, an SLO is earned through trust, transparency, and demonstrated benefit to society. Losing social licence can result in protests, boycotts, regulatory intervention, and reputational damage.
Why It Matters
Social licence is particularly critical for industries with significant environmental or community impacts, such as mining, energy, and infrastructure. ESG-focused companies proactively build social licence through genuine stakeholder engagement and community investment.
Related Terms
Stakeholder Engagement
Stakeholder engagement is the systematic process of identifying, consulting, and involving individuals or groups that affect or are affected by an organisation's decisions and activities. It includes employees, customers, investors, communities, regulators, and civil society. Effective engagement is two-way, transparent, and ongoing rather than a one-off consultation.
Social Impact
Social impact refers to the significant positive or negative effects that an organisation's activities have on the well-being of communities and society at large. It encompasses outcomes related to health, education, employment, equity, and quality of life. Measuring social impact helps organisations understand and communicate their contribution to societal progress.
Corporate Governance
Corporate governance is the system of rules, practices, and processes by which a company is directed and controlled. It defines the distribution of rights and responsibilities among the board of directors, management, shareholders, and other stakeholders. Good governance ensures accountability, fairness, transparency, and responsible decision-making.