What exactly is the Social License and why does it matter?

When inquiring with the Social Impact Assessment specialist about Social License to Operate (SLO) in renewable energy, the expert notes that "SLO represents an intangible, implicit agreement between companies and the communities they operate within."

The specialist emphasised that "performing Social Impact Assessment does not guarantee Social License to Operate, but it is the best first step you can take to obtain it."

Projects lacking social license encounter significant dangers: negatively affecting the local community through insufficient communication, inadequate mitigation, and misaligned community benefits.

From a business standpoint, missing SLO creates immediate and prolonged financial exposure:

• Delays and Increased Costs — community opposition triggers project delays through protests and legal action, escalating expenses. • Reputation Damage — absence of SLO tarnishes developer credibility, complicating future community engagement and investor relations. • Reduced Market Value — unendorsed projects lose buyer appeal and market competitiveness. • Operational Challenges — persistent opposition causes service disruptions, security expenses, and potential sabotage. • Regulatory and Legal Risks — enhanced regulatory scrutiny brings enforcement actions, compliance expenses, or project termination. • Loss of Economic Benefits — competing developers offering superior community advantages may discourage local government approval for rival projects.

SLO develops through "early and comprehensive engagement, consistent actions, transparency, timely communication, and community-led development initiatives." Once lost, regaining SLO can prove to be an arduous task.