A Regenerative Approach to Hosting Visitors: Pathway to Social Licence?

Dianne Dredge
Mar 12, 2023
8 min read

Updated: Aug 13

12 March 2023

Social licence is generated through a combination of trust, relationships, credibility and reliability

What is Social Licence?

As the Regenerative Living Lab on Flinders Island evolves, the issue of social licence continues as a thread of discussion. ‘Social licence’ refers to the level of acceptance, support or approval that communities extend to a business, an organisation, a project, or a sector to conduct business or continue their operations'.

But here is the tricky part! Social licence is not a tangible 'thing' that can be defined in a number of easy steps. Nor does it have clear criteria that, by ticking boxes, one can prove social licence exists. There is also no social licence certificate that can be awarded. Social licence depends on a number of elements including:

community sentiment
the perceived impacts of the business or the sector
whether those impacts are positive or negative
the distribution of those benefits (i.e. who wins and loses).

Social licence is dynamic and can change quickly, especially if there is a trigger event that shifts sentiment, like an event, a decision that undermines confidence, or an action that is driven by self-interest and where the broader public is negatively impacted.

This post explores the issues and challenges of social licence and has been written in response to an industry member asking, "Where can I get a social licence?"

What Contributes to Social Licence?

The term ‘social licence’ is a metaphor coined over 20 years ago that refers to the broad level of acceptance that the mining industry had in the conduct of their operations. Mining brings with it significant negative impacts and it's little wonder that the industry suffers from poor social licence.

Social licence is relevant to all sectors and businesses that use public goods, community and/or nature's assets. Social licence shines a light on whether a company, an association, a project or a sector can be regarded as a ‘doing good', and whether it is trustworthy, credible and legitimate in the eyes of communities, consumers and other stakeholders.

Significantly, whether a business, operator, or sector has social licence depends on:

The level of trust that the community has in the operator, business or organisation, and
The level of responsibility the operator, business or organisation demonstrates towards the community and to the place.

Designing products, services and experiences that contribute to net positive impact is a way of showing genuine commitment to social licence. Perceptions of trust, openness, intimacy, and accountability are therefore all core attributes of social licence.

The Trustworthiness equation is credibility + reliability + intimacy over self orientation — The Trustworthiness Quotient - adapted from Trusted Advisor

Trusted Advisor provide a useful breakdown of what they call TQ (Trust Quotient), arguing that it's similar to EQ (Emotional Intelligence Quotient) and IQ (Intelligence Quotient). While there are many ways to measure TQ, EQ and IQ, their equation is useful in alerting us to how trust is perceived by others.

Where is Social Licence?

Social licence starts with the individual, the business, and the organisation, and collectively, rests with the community deciding whether the social licence is warranted. Governments obtain their social licence through the democratic system, although we have all been witness to notable instances where governments have lost their way and their social licence has been revoked.

Importantly, social licence cannot be transferred, bought, or issued; it is earned. Each individual operator, business, or organisation must earn their social licence. It can become tricky when one bad actor's actions affect the reputation and, therefore, the social licence of the broader sector.

Can Social Licence be Measured?

Directly measuring social licence can be tricky. We can collect sentiment data about the trustworthiness of a business, operator or organisation, but that is only a partial indicator. Efforts to collect data, measure, and evaluate impacts, and communicate actions that address impacts will help to build the reputation of the business, organisation or sector as a 'good' actor. However, perceptions of self-interest underpinning the data collection can destroy its trustworthiness. For example, community sentiment data collected by tourism organisations are prone to a lack of trustworthiness because there is an underlying self-interest in why the data is being collected in the first place.

How can Social Licence be Addressed?

The best way of securing the social licence for tourism is to:

Set up and operate within an accountable, transparent, and trustworthy governance framework that is both collaborative and consultative with the local community.
Monitor, evaluate, learn and adapt actions based on stakeholder feedback, opinions and perceptions.
Develop intimate, caring and generous relationships with the community and its different parts Actions speak louder than words.

Put simply, for the visitor economy to address social licence, it requires that every stakeholder, business, and tourism operator take responsibility for operating in good faith, participating in open, constructive dialogue, and addressing challenges in a timely and transparent manner.

When communities perceive that the decisions being made about the visitor economy are addressing mutual interests, then social licence might be closer to being achieved. The time it takes to establish these relationships should not be underestimated. Social licence is therefore not a project, but a journey and a long-term commitment.

Social Licence and the Islander Way

Formal and informal settings and interactions are sites for building trust, credibility, and reliability

How do we interpret social licence?

Adopting a regenerative approach to hosting visitors provides an undeniable opportunity for businesses, operators and the sector in general to establish social licence and goodwill.

In the Islander Way, we adopted a perspective where social licence is part of a broader regenerative approach to place-based and community-led empowerment; the community needs a voice in the decisions that affect them.

Where social licence is secured, this means that the community has been consulted, they have been listened to, and there is general support for the decisions being made or actions taken. The tourism sector's willingness to evolve, take greater responsibility for its impacts, and communicate the steps it is taking to regenerate communities, cultures, and environments will build trust and credibility. It follows that securing social licence is the responsibility of operators, businesses, and tourism organisations to undertake genuine engagement and not just assume 'that the community will benefit'.

Community Conversations as an Opportunity to Understand and Collaborate

The Islander Way project has laid the groundwork for operators, businesses and the sector to pursue social licence by gathering evidence about community perspectives, attitudes, and opinions. Acknowledging these impacts and responding appropriately to the issues would help identify the actions needed to address the sector's social licence.

In the Islander Way, the community and the project team co-designed future directions and are activating projects that align with the values of the Islands' communities. This has not been an easy process because the Island's operators have not been willing to share their position at the decision-making table, and have been unwilling to acknowledge the fundamental role of the community and place in tourism. At stake is access to marketing funds and influence, which have been embedded in and incentivised the tourism system for decades.

Support Community-led Projects and Initiatives

Support of community-led projects and programs would be an easy and direct way of establishing social licence. Community-led social and environmental programs can acknowledge the broader impacts of the visitor economy on the Island and its communities. Importantly, such programs need to be developed and implemented by the community to benefit the community. Ideally, industry players should not be involved in the design and delivery of such programs but remain at a supportive distance. Involvement may open industry to claims of business-as-usual greenwashing.

Establish a Community Voice and Include It in Decision-Making

The Islander Way project has sought to establish its social licence, potentially through the establishment of a community collective. This collective would serve as an independent voice, facilitating open and constructive dialogue through community engagement. The challenge is to ensure that this voice is included in all conversations and is considered an equal stakeholder with equal weight.

Incorporating a new 'actor' into well-established processes and practices requires work and commitment on the part of existing players. It requires making space for a new voice, and this may come with a sense of loss and/or resentment from established players if the established power dynamics are disrupted.

Participation and Inclusion as a Principle

The project has also demonstrated an inclusive approach, continually integrating individuals who show an interest in the process. Of course, not everyone may be interested, available, or willing to participate. However, the extended consultation process has provided sufficient opportunities for anyone wanting to learn about the project. This onboarding will be an ongoing task.

The information that has been gathered and evaluated by the project provides a trove of insights on how operators, businesses, and other stakeholders can position and operate their businesses or organisations so as to secure social licence and be perceived as ‘good actors’. The challenge is for businesses to shift their mindset and acknowledge the potential opportunities this creates for stronger place-based, community hosting.

Trust, Credibility, Reliability, and Relationships

Social licence is underpinned by trust, and building credibility, reliability and strong relationships. The figure below captures the broad dynamics of social licence - and particularly the distinction between the values of the business or organisation and its actions.

On the lower left side, a loss of social licence occurs when the community does not see an organisation or business as having a legitimate role in making decisions that affect the community, or it prioritises self-interest over collective interest.

On the upper left-hand side of the diagram, the way of addressing declining social licence is to increase transparency, accountability and inclusion by adopting good governance practices (e.g. transparency, accountability.

ELEMENTS AND DYNAMICS OF SOCIAL LICENCE

The dynamics of social licence where business values and how they act contribute to social licence — Dynamics of social licence

On the lower right-hand side of the diagram, a lack of legitimacy can be addressed by increasing consultation processes, more transparent communication, reviewing governance practices, and improving the transparency and accountability of decision-making.

Up the upper right-hand side, genuine efforts to address social licence can be rewarded by the community through enhanced community ownership, support and a willingness to provide intangible assets such as goodwill, hospitality and welcome.

Finally, a Cautionary Word

There are many instances where businesses and organisations have used the concept of social licence for self-interest. Mining companies, for example, have been known to divide and conquer Indigenous groups and, in the process, claim they have the social licence of the legitimate group. Corporations have also commissioned their own consultants or undertaken their own community engagement only to produce 'evidence' that there is community support for their project or operations. Social licence can be misused and misconstrued, which is why clear, independent, and inclusive community engagement using multiple engagement tools and sources of information is necessary.

To this end, you might be left wondering, "What can I do to address social licence in my own context?"

Take responsibility for looking beyond self-orientation. In the longer term, aim to work with communities and other stakeholders to identify and implement visitor experiences and hosting initiatives that replenish and regenerate communities, cultures and environments. We are not the centre of the challenge.
Acknowledge the issues raised in the community engagement process in a clear-eyed and constructive way. Refuting, denying, or worse still, correcting perceptions that the community hold may only exacerbate tension. Raise your level of consciousness.
Transition towards purpose-led businesses that are aligned with community values, that deliver a social and/or environmental mission, or that make a positive impact in clear, measurable ways. Acknowledge everything changes, and letting go and adapting is alos building resilience.
Review current governance arrangements for the management of tourism with a view to making such arrangements future-fit given the shifting of values and policy narratives towards positive impact and regeneration. Adopt a clear-eyed approach, bring your awareness to your assumptions and the myths you hold close.
Social licence is 'earned' by a business, organisation, project or sector by taking responsibility for their actions and impacts, and by acting in transparent, credible, and legitimate ways. It takes time and commitment. Place others at the centre and build collective energy aimed at restoring and regenerating what places and communities have lost.

These suggestions go some way to establishing trust and accountability. Becoming a first mover and embracing a regenerative approach can also contribute to the confidence in and credibility of the business, organisation, or sector. Aligning with a regenerative mindset is a tangible step forward.