What are the benefits of a Social Licence?
We are living in precarious times, where a paradigm shift in mindset is paramount for the sustainable continuity of business as we know it. The Paris agreement which was launched in 2016, has pledged to stall the increase in the global average temperature to well below 2°C.
The consequence for this is an international effort towards reduction of carbon emissions. In recent years with the onset of alternative energy, such as solar, wind and hydro, we have also seen strides in carbon capture amidst a variety of alternative routes to fuel energy, as well as preserve it. We have also seen a global effort in the reduction of waste, the emergence of circular economies and green technology. Whilst much of sustainability topics revolve around the environment, it is not limited to planetary boundaries and green issues. Bio diversity, inclusiveness, labour practices and fair trade are other such areas of concern.
Malta, being part of the EU, has its own ongoing initiatives towards its own contribution, but whilst the politicians discuss, much of the action lies at the source of what we as individual companies, can do to make a difference, however small we feel it may be.
A social license and Corporate Social Responsibility are both essential for today’s organisations as they contribute towards building positive relationships with stakeholders, enhance brand reputation and drive long-term sustainability.
What is a social License?
A social license refers to the level of acceptance and approval an organisation receives from the local community, stakeholders and society at large in order to conduct its business activities. This acceptance goes beyond legal requirements and indicates that the organisation is seen as responsible, ethical and aligns to community values.
How does a social licence help an organisation?
A primary step towards ESG regulation
As times unfold, and new and upcoming regulation will be coming into effect for companies of a certain size and a certain turnover to pledge their environmental, social and governance (ESG) commitments, the Giving Back Malta insight and subsequent MCCAA award, will be a step closer to any future requirements in this regard, paving the way for ideas and initiatives that can be adopted by the organisation, in the present and short term future.
Stakeholder Trust
When an organisation pledges its commitment to social and environmental issues, it gains the trust of its stakeholders. This trust contributes towards stronger relationships with customers, investors and employees .
Enhanced Reputation
A positive social license contributes towards an enhanced reputation, which in turn contributes to customer loyalty, brand value and investor confidence.
Long-Term Viability
A social license is key to an organisation’s long term sustainability, as it ensures that an organisation aligns to society’s expectations and way of thinking; it also reduces the risk of operational disruptions or regulatory interventions.