Critical Resource has reviewed its LicenseSecure™ methodology to ensure it incorporates the core elements of key global sustainability standards
LicenseSecure is our model to help natural resource firms assess and manage the ‘socio-political license to operate’ of their projects in a strategic, far-sighted way. Developed based on analyses of over 60 resource projects which have experienced shifts in their ‘socio-political license’, it now also provides a ‘one-stop shop’ assessment for companies aiming to meet a broad range of industry best-practice standards.
A host of guidelines and principles have been developed in recent years to define and promote best practice in the extractive industries on issues from environmental impacts to human rights to host-country governance. They include the IFC Performance Standards, the Voluntary Principles on Security and Human Rights, and the Extractive Industries Transparency Initiative.
These standards are often critically important to project sustainability and corporate reputation. At the same time, the number of them and the fact that they often cover similar but not identical ground creates challenges for companies seeking to implement them. In particular, companies are often called upon to commission numerous, overlapping assessments against different sets of principles. This can create a significant administrative burden (which itself may deter their use), while the resulting confusion of reports sometimes can make implementation less rather than more likely.
A standard approach
In light of this, at Critical Resource, we have compared and benchmarked our LicenseSecure model against more than twenty of the most important and respected of these corporate social responsibility initiatives and performance standards, and incorporated core elements of each. We have also built into the methodology links to an array of indices and databases to strengthen our assessment of a project’s broader socio-political and environmental operating context. The diagram above sets out some of the standards and indices we have covered in this review process.
As a result, a single LicenseSecure assessment now provides high-level, robust guidance on whether or not a project meets the core standards of a wide range of key industry initiatives, potentially reducing the need for multiple and overlapping appraisals. It does not provide formal accreditation or verification of a project’s compliance with all such initiatives. But it can be used by companies to ensure there are no major implementation gaps. It also may be useful from the perspective of external groups seeking practical ways to encourage implementation of standards.
In this way, the process has added further rigour to LicenseSecure’s 150+ indicators, making it an even more comprehensive and authoritative tool for assessing and strengthening a project’s ‘socio-political licence to operate’. Click here for further background on LicenseSecure.