FOR SUSTAINABILITY LEADERS, ENHANCING SOCIAL LICENSE TO OPERATE IS THE MISSION

Sustainability leaders today are under great pressure. Very few roles have as many taskmasters. From the board to the C-Suite to employees to regulators to watchdog groups and beyond, sustainability leaders are under intense scrutiny. This can make it very challenging to keep the “main thing” as the main thing.

Career success usually comes from intensely focusing on just one or two top priorities. But for sustainability leaders, this can be very challenging. They’re pulled in so many different directions and have so many different groups to consider, each with their own set of motives and goals. After coaching dozens of sustainability leaders over the last 20 years or so, I’ve come up with a relatively simple solution to this problem.

I believe, at the end of the day, that sustainability roles exist to enhance an organization’s social license to operate. This really is the mission. While it is simple and straightforward to say this, it is much more complex to execute against it.

What Is Social License To Operate?

I believe social license to operate is the direct descendant of a much older concept: the social compact.?This idea, many would argue, is the underpinning of modern Western civilization. Enlightenment thinkers like Thomas Hobbes, John Locke and Thomas Jefferson sought to articulate a view of how society can be formed around concepts like justice, fairness and equity.?They sought to reduce tensions that might lead to war by emphasizing how groups of people naturally held moral obligations to each other.

A social compact defined power relations between people by establishing responsibilities for all parties while also setting limits. This is probably best articulated in the?U.S. Declaration of Independence ?passage that describes why governments exist: to secure human rights by “deriving their just powers from the consent of the governed.” When one party acts outside of these obligations and limits, whether a government, a business or even a community, they are considered rogue, acting contrary to the laws of nature.

Social license to operate shares similar assumptions. I define social license to operate as an organization’s public reputation in society at large. Among all the criteria the public may use to grade an organization’s social license, sustainability posture may be the most important today.

Three Grades

The thing about public reputations is that they are malleable, changeable and evolving. They aren’t fixed. I have come to believe that, at any given time, an organization’s sustainability reputation is likely moving in one of three directions:

? Positive:?The organization is seen as a good actor, trustworthy, environmentally friendly and seeking to reduce impacts and investing in initiatives that will get them to “nature-positive.”

? Neutral:?It has no positive or negative sustainability posture that the public readily recognizes.

? Negative:?It is seen as a bad actor with negative impacts on the environment and seen to behave in ways that are rogue and untrustworthy.

I will admit that there is no formal and universally recognized system or apparatus that renders these grades today. But the impact is nonetheless quite real. I believe it’s powerful and it’s not controllable by any one entity. Public opinion forms of its own will and volition organically, quickly and often through social media channels.

For those who doubt the power of social license to operate, I remind them of one thing. The ideas that shaped the social compact were around for decades before they finally erupted in full force during the American Revolution. Once those ideas took root, they radically altered history. I believe we are standing on the precipice of a new revolution and that the sustainability reputation revolution is here to stay.

What People Want From Organizations Today

I’m not alone in this position. You’ve likely heard of the Edelman Trust Barometer surveys. The?2022 report ?(download required) drew some astounding conclusions about how people view organizations and institutions. Trust in government and the media was down from the previous survey. Instead, business was the only trusted institution. Climate change was one of the top societal fears cited by respondents.

But the other important finding from this survey is how accountability is changing.

? 58% buy or advocate for brands based on their beliefs and values.

? 60% will choose a place to work based on their beliefs and values.

? 64% invest based on their beliefs and values.

In other words, there is a powerful and direct link between how consumers view an organization and how they buy, where they work and what they will or won’t invest in. An organization’s sustainability posture has a direct bearing on all three of these.

A Very Different Calculus

I make this point because I believe it requires a mindset shift from sustainability leaders. When a sustainability leader steps into a new role, the first question they often ask is, “How can we be more sustainable?” Usually, this results in a long list of initiatives. While there’s nothing wrong with this, ultimately, it’s not enough. Instead, I recommend that sustainability leaders ask themselves two questions:

1. Where is our social license to operate at risk today?

2. How can we leverage sustainability to make it even stronger?

These two questions may also produce a long list of initiatives. But the difference is that they’ll be directional and selected based on the impact they have on social license to operate. This doesn’t mean they’ll simply be performative or just a PR scheme. The science and the outcomes will still need to be solid.

But these questions foreground something important: communication. Leaders will need to tell people about positive outcomes from their initiatives: a board, the C-suite, employees, customers, regulators, watchdog groups and even communities where an organization consumes local resources like water, soil and air.

Sustainability leaders can have a major impact on an organization’s public reputation. But it begins with focusing on social license to operate. Those who prize it can reap many benefits, and those who ignore it, even if they do great work, could expose their organization to unnecessary risk.

This article was originally published through the Forbes Councils