Social Licence to Operate: How to Engage

28 May 2014

Good stakeholder engagement, constructive partnerships and communicating your strategies and activities are all key components of achieving a social licence to operate, as presented at the 'Social Licence to Operate – How to Engage' event held at AUT Business School on Tuesday 6th May.

Co-hosted by the Sustainable Business Council and the BusinessNZ Major Companies' Group, the event focused on how New Zealand business could identify who their stakeholders are and determine what is material to them, how partnerships can be developed between organisations to align with strategic goals and how to communicate your sustainable business practices effectively across the different types of media to different audiences.

A range of perspectives on what social licence means to New Zealand business were presented on the day, with speakers talking about relationships between iwi, the private sector and non-governmental organisations that can match community values with a business's strategic goals.

Speakers included:

Mike Sang – Ngāi Tahu Holdings
Christopher Luxon – Air New Zealand
Jo Cain – AUASB, Banksia Environmental Foundation, ARA
Louise Aitken – Fonterra
Chris Howe – WWF-NZ
Dan Ormond – Ideas Shop

Mike Sang – Ngāi Tahu Holdings

Mike Sang, Chief Executive at Ngāi Tahu Holdings discusses the Ngāi Tahu Holdings perception of social licence to operate.

The concept of 'social licence to operate' in the context of Ngāi Tahu Holdings, the iwi's commercial arm, was described by Chief Executive Mike Sang as the trust and confidence between the iwi and the Holdings company and that this was achieved because the values of the company are defined by the iwi members, not the company board.

Mr Sang said that Ngāi Tahu Holdings see their role as developing commercially successful ventures that align with community values and contribute to the wellbeing and aspirations of iwi.

Click here for Mike Sang's presentation slides.

Christopher Luxon – Air New Zealand

Christopher Luxon, CEO at Air New Zealand talks about the business value and importance of a social licence to operate and what AirNZ is doing to develop this.

Speaking about linking regional economies and helping to expand markets for New Zealand products, Christopher Luxon, CEO of Air New Zealand, described sustainability as a key priority for the airline company, which helped build trust between the airline's staff and customers that in turn strengthened societal confidence in their business.

Mr Luxon said that a core focus for the airline is to build stronger relationships with other stakeholders and continue to work to their 'Go Beyond' plan, which sets out organisation goals for the next five years.

Part of the organisation's goals are to continue to develop skills and experience of their staff so they will feel that they are part of a "purpose and mission" bigger than their day job and it helps the airline invest back into the business.

Jo Cain

Jo Cain, Non-Executive Director at AUASB, Banksia Environmental Foundation, ARA presents why stakeholder engagement is critical to earning and maintaining a social licence to operate, how to identify your stakeholders and work out what is important to them – materiality determination.

Jo Cain, who has worked with companies such as BHP Billiton, Contact Energy, CPA Australia and Rio Tinto, talked about how critical it is for business to identify its stakeholders and ensure that the business goals and operations align with issues that are material to those stakeholders.

Ms Cain said that a step-by-step approach was crucial to determining materiality and that this approach is important as a "quality check" on the wider stakeholder engagement process.

Click here for Jo Cain's presentation slides.

Louise Aitken – Fonterra &
Chris Howe – WWF-NZ

Partnerships – development and value to business and NGOs.

The social benefits of constructive partnerships were described by Chris Howe, Executive Director of WWF-New Zealand and Louise Aitken, Programmes Manager, Global Sustainability & Social Responsibility at Fonterra.

Mr Howe (via video) described the practicalities and development of partnering with a business, whereby the WWF goals of conserving biodiversity and enhancing communities' wellbeing can be met through the transformation of the partner business operations and impacts, while the business can benefit by having access to communities that WWF has a strong relationships with.

Ms Aitken talked about partnerships being an effective way to address a societal need, such as children's access to nutritious food, and they should be formed on the principle that a community should be better off because of that company's presence in it.

Click here for Louise Aitken presentation slides.

Dan Ormond – Ideas Shop

Dan Ormond, Founding Partner at Ideas Shop presents how business can better communicate their sustainability, how media is currently being used for stakeholder engagement and what it takes for business to get it right.

The key message from Dan Ormond, Partner at Ideas Shop, was that all these aspects of engaging with stakeholders and developing sustainable business practices need to be communicated well in order to keep your business's social licence to operate, with knowledge of who your market is and its size.

Mr Ormond said that there are two main motivations for communicating sustainability: firstly, that sustainability in many contexts is risk and reputation management and that when things go wrong for the business they'll need to approach the issue in a way that addresses trust and confidence; secondly, that it is an opportunity to communicate with consumers and businesses that are very motivated about who they'll buy products from and what price they'll pay.

Click here for Dan Ormond presentation slides.