The social licence concept has gained traction in recent years as a way to hold financial markets accountable to society's expectations. It recognizes that markets operate within a broader social context and that their actions can have far-reaching impacts. By embracing the social licence framework, financial institutions can demonstrate their commitment to responsible and sustainable practices, build trust with stakeholders, and contribute to positive social and environmental outcomes. Ultimately, the social licence for financial markets is about aligning economic success with societal progress, creating a more equitable and resilient future for all.
First, by making the desired ends of financial activity, beyond simply making money, more salient, increasing the likelihood that they will become a behavioural focus;
Second, by providing a frame of reference for market decisions that operates by reference to a wider understanding of human wellbeing;
Third, in forming market participants across the finance ecosystem – the culture of firms and the character of those within them.
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