Assessing the financial value of social licence: a framework and its practical application
Susanne Cooper A and Jon Frew ASinclair Knight Merz
The APPEA Journal 54(1) 181-186 https://doi.org/10.1071/AJ13019
Published: 2014
Abstract
Social licence to operate is of increasing concern to the energy sector generally—and the CSG industry more specifically—with a perception that this industry’s social licence has been eroded in recent years. Many organisations view gaining a social licence as being central to their reputation and business viability. Few organisations, however, have assessed the financial benefit of gaining a social licence, or the cost if it is lost. A framework to assess the financial value of social licence that drew upon multiple disciplines in its development has been developed. This framework has been applied to the CSG industry as well as other industry sectors, generating many practical insights and outcomes. It is an important tool, with sound logic and a clear structure, to identify the full financial costs and benefits of social licence to a project and organisation, and the contributing factors. It has value to boards, project decision-makers and business strategy by providing a visible and tangible expression of social licence in terms relevant to decision-makers that is closely connected with the project phase and material risk. It presents a practical evidence base and dollar value for what is often seen as nebulous, complex and intangible, and therefore easy to marginalise in key decisions. This paper outlines the logic and structure of the framework, and demonstrates its practical application on two major project case studies drawn from the energy and resource extraction sectors.
Susanne Cooper has a BA (Hons), Diploma of Education and MSc in environmental science. As the executive sustainability stragetist for Sinclair Knight Merz (SKM), Susanne is SKM’s global Practice Leader in Sustainability, with more than 25 years consulting experience working with all levels of government, internationally and with private corporations. She brings leading experience in developing strategy, policy, technical assessments and corporate reporting across numerous industry and government sectors. She has worked on developing and applying sustainable outcomes into project design and delivery projects that positively challenge business with approaches across six industry sectors including major transport, water, energy and resource projects. Susanne has recently led the development of a structured framework that assesses social licence risk, adopts a proactive approach to integrating effective solutions across project life and assesses the financial value of a strong social licence. She has also worked closely with organisations and large project teams to affect organisational and behaviour change for lasting outcomes. She has been an invited speaker at national and international conferences. Member: SEQ Council of Mayors Group on Regional Development; State Government Reference Group on Coastal Management; and, Board Member, Greening Australia Qld. scooper@globalskm.com |
Jon Frew has a Bachelor of Business Management and a Graduate Certificate of Commerce. He is an analyst and the regional client manager for private sector infrastructure investors in SKM’s Brisbane office. Jon is also a senior practitioner and leader of the economics and project advisory team, and specialises in economic, commercial and financial appraisal and advice for major infrastructure projects. Jon has worked on leading investigations into large scale infrastructure projects for both private and public sector clients in his time at SKM across the mining, water and transport sectors. Through his various roles, Jon prides himself in his ability to engage with a variety of key stakeholders and clients to deliver real solutions for complex problems. Jon’s broader experience covers policy development and advice, regulatory and macro-economic analysis, commercial and procurement advice, as well as business case development. JAFrew@globalskm.com |
