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The power of understanding your Social License to Operate (SLO)


A Responsible Business Perspective



Recently, Australian businesses have seen a pessimistic shift in the sentiment of stakeholders across the board. Empirically we are seeing that the community and consumers are facing a crisis of trust when it comes to businesses and institutions.



This distrust originates from the global financial crisis but is fuelled by the ever-increasing division between the wealthy and the poor. The problems of inequality, flat wage growth and a lack of social responsibility by corporations continue to perpetuate the anxiety of the community. With the prevalence of ‘fake news’, now more than ever before businesses cannot wait for public sentiment to flip, or for governments to take the lead, it is the responsibilities of businesses and their directors to understand the risks facing their future business success and how to grow community belief in their brand.


What is a Social License to Operate?


The Social License or SLO refers to the ongoing acceptance of a company’s operations and business practices by its stakeholders. SLO is a trackable metric which measures stakeholder sentiment for an organisation and its behaviour – stakeholders either support the business or oppose its operations and are likely to boycott the brand and it’s products/services.


Essentially SLO is the tangible sentiment of stakeholders which if negative will reduce their desire to invest or spend their money with an organisation. This is because the company’s values and practices do not align with their own, and the way they feel businesses should impact the community.


Improving your Social License for Reputational Benefit


As we move to an increasingly socially conscious global community, and negative business practices are quickly shared around the world with the power of the internet, businesses need to understand how to improve their Social License within their stakeholder group to ensure their business continues to prosper.


Before getting started with making improvements to your SLO, it is recommended to consider where your license sits on the spectrum. This often includes qualitative and quantitative research and engagement with stakeholders, as well as a market review.

Four levels of the social license journey.

There are four levels of the Social License that we can consider when bench-marking your brands performance - withdrawal, acceptance, approval and co-ownership (shown in the graphic to the right). Each level can be normalised with a criteria or step-change of legitimacy, credibility and trust and thus allows the development of relevant indicators. These are the phases that a stakeholder moves through as their SLO rating improves.


The first step in this journey to improvement (which will also see an uplift in brand value and likely an impact

to your businesses bottom line) is to ensure that your business is leveraging and meeting all Environmental, Social and Governance (ESG) expectations. This is done by undertaking a materiality analysis (future posts on this to come) and identifying the issues that are most important for your stakeholders and the community. Following this, our team of cross functional advisors will develop a plan to improve your organisations performance and actions in these ESG spheres. This is often a medium-term process which will consist of transparent reporting and disclosure, Corporate Social Responsibility (CSR) activities and a program across the three pillars of Environmental, Social and Governance issues to achieve risk mitigation.


Measuring your SLO is the first step in leveraging stakeholder sentiment and expectations to realise brand uplift.


The Glacier Group specialise in ESG and SLO advisory services for Australian businesses. To find out how we can help you on this journey, please get in touch! We look forward to speaking.


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