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Opportunities to strengthen social licence for oil and gas companies

Strengthening social licence for oil and gas companies

International oil and gas companies have poured significant resources into building social licence since the 1990s. Despite this extensive effort at a local community level adjacent to operations, social licence has not been consistently gained and broad based community trust in the industry is lacking.

Louise Pogmore

Partner, Customer, Brand & Marketing Advisory

KPMG Australia


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Social licence has not been achieved globally, because oil and gas companies are failing to respond directly and appropriately to the concerns of all stakeholders.

While international oil and gas companies have largely been successful in achieving and communicating the benefits they bring at a local level, in terms of royalties, local community investment, jobs and even in environmental credentials, they have not achieved social licence because it is no longer granted by only local communities. It extends to a potentially more powerful group of largely urban dwelling broader society, enabled by technology, especially social media.

A new way of communicating and operating is required if oil and gas companies want to avoid the loss of social licence in future. We identify three distinct opportunities to strengthen social licence in today’s context:

  1. Understand and use social media to proactively address the concerns of all of your stakeholders. This includes responding to societal and global issues, which no longer centre on the ‘jobs, taxes and philanthropy’ dialogue that has been the mainstay of oil and gas industry communications.
  2. Stress the role gas has as an enabler of renewable energy development and penetration.
  3. Review your investment strategy in light of the scientific reality of climate change. To gain social licence in future, action will be required to follow the lead of some fossil fuel majors who have already moved to build a new world, decarbonised portfolio of the future.

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