Newcore Capital X i3 – Earning trust and the social licence to operate

By Kali Persall

Our CEO, Hugo Llewelyn recently spoke to Kali Persall at i3 to discuss the importance of both a social and financial licence to operate and how these have become a vital component of delivering successful infrastructure projects.

Establishing trust with local communities and stakeholders is crucial when delivering infrastructure projects, especially those that could impact local resources or the environment. A “social license to operate” refers to an unwritten agreement based on trust and ongoing approval from the community. While not legally binding, its importance is significant, as it can greatly influence a project’s success or failure. Losing this trust can harm a company’s reputation and make it difficult to regain. A strong social license signals that a company is focused on social and environmental impacts, reducing the likelihood of negative events and the reputational harm when they occur. Managing reputational risks well is key to maintaining a strong social license.

For Newcore, a social licence involves taking an ethical approach to capital management in infrastructure across four levels: at the asset level in terms of looking after stakeholders; at the fund level in terms of paying taxes, maintaining transparency and using appropriate leverage; at the manager level in terms of adopting a balanced approach in dealing with all stakeholders, including the environment and communities one works with; and at the principal level, with the behaviour of the owners of the business being consistent with the other tiers.

Read the full article here.