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Social license is no longer just the job of the corporate social responsibility team. With activists and local communities around the world causing disruption to mining, energy and agribusiness operations, gaining buy-in from a wider range of stakeholders is increasingly becoming a front-and-center priority, driving financial performance and stakeholder value.
So how do you avoid ending up on the receiving end of protests and disruption – especially as gaining the support of both local and global stakeholders can be a complicated and time-consuming endeavor? As each project and circumstance is different, a company's approach must be both tailored and ready to be responsive to change.
A good social license strategy begins in the planning phase for entering a new country or location. The foundation is a solid understanding of who wields influence and power over the actors that can make or break your project – not only at state level, but locally and internationally. What are the political, social, economic, formal and informal power structures in the area where you’ll be operating? Who are the individual influencers within these? What motivates them and what else is in play in this environment that you will become part of?

It’s critical to recognize that no project starts in a vacuum and in most places a new, large-scale project can act as a catalyst for pre-existing grievances, even when it’s not actually creating new ones. What are you stepping into and how will you be perceived?
Knowing who holds the power isn't always straightforward. Formal and informal leaders may be easy to identify, but consider parallel channels of power as well, such as political challengers, who can use a company's affiliation with their rival as a political tool. And sometimes, the style of engagement can trigger a negative reaction even when well intended. This makes it particularly important to understand local dynamics and keep up with how they’re changing to anticipate and accommodate this change.
Sometimes those with the power to disrupt a company or project aren't even local. Online social activism has allowed outsiders with large audiences to have an impact on projects in remote areas that might otherwise have little resistance. Likewise, a small number of local activists can leverage the power of the web to add outside momentum to their cause. So even where local stakeholders have been successfully brought on-side, the same may not hold for further afield ones that may be operating with wholly different agendas.
Although developing and maintaining social license—alongside ongoing actual license—is challenging, it is far from impossible. However, it is time consuming and resource intensive. Everyone in a company has a role to play to gauge changing sentiment and emerging issues, to continuously communicate with stakeholders at all levels and to capture the need for changing strategies when they emerge. When done right it not only minimizes the risk of disruption but helps maximize business opportunity and revenues for the bottom line.
Nathalie Wlodarczyk is managing director, global risk consulting, IHS Economics and Country Risk
Posted February 11, 2015

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