The contributions to this blog series give fascinating perspectives on what a social licence for business should look like in practice. This concluding piece draws some lessons from the contributions.
What is the social licence for business? A social licence for business requires firms to act in line with their social purpose. This means that firms must act to bring about social value in the course of pursuing legitimate, profit-making activities. To fulfil the terms of their social licence, companies need to show that they take the interests of stakeholders into account when making decisions about activities. They also need to cultivate awareness of, and take responsibility for, the long-term consequences of their activities. (For more on this, see our consultation document ‘Social Licence for Business, A framework for reshaping the private sector post-pandemic’.)
What does the social licence for business look like in practice? The contributions to our blog series highlight four characteristics of firms that act in line with their social purpose.
1) Responsibility. Firms that act in line with their social licence acknowledge the interdependence between their operations and society and aim to ‘pay back’. Loughlin Hickey’s contribution to this blog series illustrates this point. He proposes concrete measures that businesses can take towards being a responsible business, such as publishing the beliefs that underpin their tax strategy.
2) Sustainability. Firms that act in line with their social licence act sustainably and are environmentally friendly. Gill Ringland’s contribution describes an example of commendable business behaviour, supporting the planting of trees in Reading.
3) Forward-looking. Firms that act in line with their social licence will be aware of the long-term consequences of their activities and act to help future generations. As Thomas Betten points out in his contribution, the social contract includes young and future generations. Businesses need to listen to young activists, and work towards a world in which we leave future generations with a standard of living that is at least equal to ours.
4) Cooperation. Firms that act in line with their social licence proactively find ways to partner with others to use their skills and knowledge to contribute to the common good. Antoine de Vazelhes, in his contribution, told us the inspiring story of Reading’s Ethical Recruitment Charter.
What follows? It is important to specify the terms of a social licence for business. A positive vision of society and business working together towards the common good can motivate regulation and legislation, inspire voluntary initiatives, and provide a shared understanding of the purpose of business that will improve business behaviour and increase warranted trust in business. We suggest that further investigation of the social licence framework, and its repercussions for the private sector, the state and the individual is urgently needed.