How social licence improves infrastructure outcomes and delivery

Social licence to operate is an increasingly significant issue for successful infrastructure organisations, directly influencing the ability to deliver major projects all over the world.  Kerry Scott, Mott MacDonald’s global lead for environment and society, explains the concept and her framework for building and maintaining the community support that is needed to deliver the right projects the right way.

To maintain, renew and build the sustainable infrastructure needed to support society, both at the pace and to the standards required, clients need to secure the trust and support of affected communities and users – they need a strong social licence to operate.

What is social licence to operate?

Social licence is the ongoing acceptance of and support for an organisation and its activities.

It goes beyond meeting the minimum legal and regulatory requirements to operate, and toward meeting the evolving expectations and needs of users and local people.

Stakeholders include groups like its customers, shareholders, supply chains, employees, peers, local residents and special interest groups. The unique location and impacts of each project mean that the range of stakeholders and their interests are always situation-specific.

The concept of a license to operate originated in , reflecting the diverse challenges faced in winning permission to start, expand or simply continue projects. Companies needed to understand and mitigate the social, environmental and climate impacts of their projects. While the sector could navigate specific legal and regulatory requirements, its longer-term success required a focus on the material impacts and beneficial outcomes important to its stakeholders. Otherwise, it risked attitudes, regulation and legislation changing, eventually jeopardising its activities and reputation – which in turn would affect investor relations.

Social licence to operate was earned by demonstrating proactive risk management and going beyond regulatory compliance to deliver outcomes that were socially beneficial.

Empowering an organisation

Social licence is not a binary ‘have or have not’; it is more of a sliding scale.

Where an organisation’s social licence is strongest, it has forged deep and collaborative relationships with its stakeholders. It can even rely on them to act as proponents and advocates, who help minimise delay, overcome difficulties, and empower successful operations.

The middle ground is when social licence is permissive and passive acceptance, with a level of trust that’s relatively fragile. The organisation and its operations are seen as legitimate by its stakeholders, but without the trusted certainty of achieving the right outcomes, either in planned benefits or the successful mitigation of risks and harms. 

Where social licence is absent, stakeholders distrust an organisation and the sustainability of its operations. This could mean ongoing, continual challenges throughout the lifecycle of assets, from design through to their operation and eventual decommissioning, undermining performance or even project completion.

Increasingly relevant for infrastructure

The social licence concept is already commonly used in some countries around the world, such as Australia, and is increasingly relevant globally for how we think about the role of infrastructure in addressing sustainability challenges, while retaining confidence and achieving the right outcomes.

From the transformation of the UK’s energy transmission networks toward the Clean Power 2030 mission to delivering a successful 2032 Olympic Games in Brisbane, time-bound strategic infrastructure programmes will depend on securing sufficient social licence to enable deadlines to be met.

For example, in the UK, in the next six years, the new government has committed to a transformational increase in renewables, including onshore wind, solar, battery storage, and clusters for technologies like hydrogen and carbon capture and storage. For the first time, the new National Energy System Operator has been commissioned to produce a UK-wide spatial plan of where to locate generation and storage assets for a net zero energy system. Reform is also underway to accelerate the delivery of new electricity transmission infrastructure to enable this, with around five times more needed over the next six years than has been constructed over the past three decades.

With no time to waste, social licence is key for Clean Power 2030. The key will be to ensure wider co-benefits also feature as part of this mission. While the planning and regulatory system can be reformed and improved, with streamlined processes and resourcing to enable speedier decisions. But, active opposition to projects and programmes – through protests, legal challenges or lowering investor, talent and supply chain confidence – will create delay.

It is therefore imperative that communities are brought onboard, and government, regulators and businesses consider how to identify and secure benefits like addressing local development challenges, improved energy affordability, environmental protection, upskilling and opportunities for local employment, and healthier homes and ultimately better living standards.

The five Cs in social licence

As important as it is, securing social licence need not be daunting. In work with our clients, we suggest five principles to help secure better outcomes for business, society and the taxpayer.

1. Be clear about your intended outcomes. Beyond technical specifications, budgets and timelines, consider who projects will benefit and affect.
2. Act with conviction, showcasing the project and its goals transparently, consistently, coherently, and with passion about the difference you’ll achieve.
3. Know your operating context, understanding different community needs, including diversity of thought, socio-economic needs, and people, place and culture.
4. From the earliest stages, proactively communicate to earn and maintain trust, feedback, co-creation and insight.
5. Demonstrate credibility, with clarity about delivery practicalities, by addressing miscommunication, and with openness on your decision-making, tendering, contracting, and project roadmap.