Social license to operate

Colorado residents protest hydraulic fracturing.
Colorado residents protest hydraulic fracturing. (Photo: Flickr – Erie Rising)
A social licence to operate (SLO) refers to the level of acceptance or approval by local communities and stakeholders of organisations and their operations. The concept has evolved fairly recently from the broader and more established notions of “corporate social responsibility” and “social acceptability”.  It is based on the idea that institutions and companies need not only regulatory permission but also “social permission” to conduct their business. It is an outcome from the ways that our companies and institutions manage themselves (w.rt. ethics, labour practices, sustainability, etc.) in their wider environment, and their risk communication and engagement activities with their stakeholders. Increasingly, having social license to operate is an essential part of operating within democratic jurisdictions, as without sufficient popular support it is unlikely that agencies from elected governments will willingly grant operational permits or licences. Social license does not refer to a formal agreement or document but to the real or current credibility, reliability, and acceptance of organisations and projects.

Introduction to social license

The following papers and reports provide more detail on social license across a number of different sectors, some later material in this page links back to social acceptability and corporate social responsibility.

Building engagement and social licence: Unpacking Social Licence to Operate and partnerships – developing rubrics for guidance and assessment
This 2019 report by Will Allen and colleagues describes and develops rubrics as a tool for planning and assessing initiatives in SLO and engagement associated with systems change. The report focusses specifically on partnerships as a particular form of engagement involving two-way communication and shared responsibility. Indicative rubrics are provided as a start to help agencies and other practice change proponents to develop clarity around the different components that underpin SLO and partnerships, and as a tool to guide and evaluate progress in these areas.

Social license to operate: Legitimacy by another name?
This 2017 paper by Joel Gehman and colleagues outlines the range of  key concepts and diverse frameworks potentially implicated in discussions of social license to operate. They highlight similarities and differences among the three main varieties of SLO. They then investigate the linkages between SLO and “legitimacy”. and review methods that have been usedto measure social license. Finally they point to implications for stakeholder engagement, emerging policy and future research.

Meaningful dialogue outcomes contribute to laying a foundation for social licence to operate
This 2017 paper by Lucy Mercer-Mapstone and colleagues shows empirically that dialogue – when meaningful – contributes to sixteen outcomes, some of which were trust, relationships, perceptions of fairness, social acceptance, shared decision-making, and legitimacy. They note that many of these outcomes have previously been proposed to be integral to the development of SLO in both the academic and popular literature.

The social licence to operate: a critical review
This 2016 paper by Kieren Moffat and colleagues presents a critical review of the emergence of the concept in industry practice over the last two decades. Recent applied research to measure and model the social licence is also examined to demonstrate how the roles of trust, fairness and governance may underpin the development of more sustainable, trust-based relationships between industry and society.

Rethinking Social Licence to Operate  – A concept in search of definition and boundaries
This 2015 article by David Bursey provides a more critical view of SLO. He reminds us that the term SLO will likely continue to have currency given its widespread use, but we should understand its abstract metaphorical nature and its limitations.  From a legal and governance point of view it is suggested that it would be good to find language that directs attention to best practices and social responsibility.

Community engagement and social licence to operate.
This 2014 paper by Melanie (Lain) Dare, Jacki Schirmer & Frank Vanclay considers what social licence is and how community engagement plays a role in achieving social licence. They argue that social licence is better conceptualised as a continuum of multiple licences achieved across various levels of society.

The paths to social licence to operate: An integrative model explaining community acceptance of mining
This 2014 paper by Moffat and Zhang shows that to understand how a social licence to operate is granted and maintained, we need to take account of the processes the applying organisation uses to engage with local communities. The results highlight the importance of fair treatment and high-quality engagement with communities, alongside mitigation of operational impacts, in securing and holding a social licence to operate.

Social Licence to Operate Paper
This New Zealand-oriented paper has been developed by the Sustainable Business Council, in partnership with BusinessNZ’s Major Companies’ Group. It introduces the Social Licence to Operate (SLO) concept and outlines what the New Zealand public sees as risks to New Zealand businesses’ licence to operate. It then points to tools being used by leaders in the field.

How to improve your social license to operate: A New Zealand industry perspective
This 2014 report by Robert Quigley and James Bain explains social licence to operate and how it is characterized. The report also looks at the range of drivers to improve social licence associated with a range of industries, and how these drivers have been addressed – especially developing better relationships with stakeholders/gaining community approval. Finally it provides practical examples of actions and methods industries have taken to overcome resistance to industry development.

Social license to operate: How to get it, and how to keep it
This 2013 working paper by Brian Yates and Celesa Horvath  examines the nature and attributes of social license and analyzes its growing importance as a critical success factor for resource development. The development of social license occurs outside of formal permitting or regulatory processes, and requires sustained investment by proponents to acquire and maintain social capital within the context of trust-based relationships. Often intangible and informal, social license can nevertheless be realized through a robust suite of actions centered on timely and effective communication, meaningful dialogue, and ethical and responsible behavior.

Business and society: defining the ‘social licence’
From BP in the Gulf of Mexico to Shell in the Niger Delta, business, NGOs and politicians increasingly talk about social licence to operate.  In this 2014 Guardian article John Morrison considers what it really means. He points to examples of where social license has been lost, from Shell in the Niger Delta, BP in the Gulf of Mexico, dam building in Myanmar to the GMO debate in Europe a generation ago. But there are also examples like Gap and Safaricom whose activities worked hard to build social license.

Three Ways to Secure Your Social License to Operate
This 2013 Forbes article by Paul Klein points to three foundations for establishing and maintaining a social license – i)  be a social purpose leader; ii) give more control to local communities and stakeholders; and iii) build partnerships with the right and the wrong NGOs.

Social Licence and environmental protection: why busineses go beyond compliance
This 2002 paper by Neil Gunningham and colleagues looks at the role of social licence. They show why it is important, where it may encourage companies to go ‘beyond compliance’, how its terms are monitored and enforced. This paper also acknowledges the way in which the public can build on their role as granting – or demanding – attention be paid to social licence.

Cobalt Currents – Social Licence and Wild Catch Fishing – What is SL2O?
In this 3-part blog series Andy Bodsworth explores the fundamental importance of Social Licence to Operate (SL2O) to the professional wild harvest fishing industry.  This first post introduces SL2O and what it means. The second post – SL2O: Why care? –  focuses on why a high level of social acceptability is fundamentally important for wild catch fishing businesses. The final post in the series – SL2O: How do I strengthen it? – looks at ways to build and strengthen social licence. These posts emerge from the wider research project, Let’s talk fish, which  involved  Nicki Mazur, Allan Curtis and Andy Bodsworth. Their work included two final reports: i) Assisting industry to understand and inform conversations about the sustainability of wild-catch fishing; and ii) Engagement Strategy Foundations for Australia’s Wild-Harvest Professional Fishing Industry.

Social Licence to Operate: How to Engage
Good stakeholder engagement, constructive partnerships and communicating your strategies and activities are all key components of achieving a social licence to operate.  This page brings together a number of New Zealand business video presentations focusing on how to identify who their stakeholders are and determine what is material to them, how partnerships can be developed between organisations to align with strategic goals and how to communicate your sustainable business practices effectively across the different types of media to different audiences.

And … reflecting on social acceptability

Social Acceptability in Forest and Range Management
In this 2004 chapter Bruce Schindler and Mark Brunson synthesize research on social acceptability to describe the disciplinary origins, conceptual framework, and management relevance of the acceptability concept.

A Definition of “Social Acceptability” in Ecosystem Management
This 1996 paper by Mark Brunson  offers a working definition of social acceptability. Subsequent discussion focuses on the implications for ecosystem managers of four aspects of that definition: the social context of individual judgment, influences upon the comparative process, behavioral expressions of acceptability judgments, and observation/measurement issues.

Social acceptability of stoats and stoat control methods: A survey of the New Zealand public
Outlines the results of a 2002 public survey to assess attitudes to conservation, stoats, current stoat control methods, and possible biological control methods. The survey found that there is widespread support for controlling stoats, but that some methods of control had more acceptability than others.

…. and corporate social responsibility

Corporate social responsibility
This short article introduces the background to contemporary corporate social responsibility as philanthropic. It points to how it is now focuses on broader issues of sustainability and influenced by shareholders, partners and global reporting practice.

Why CSR? The Benefits Of Corporate Social Responsibility Will Move You To Act
This 2013 Forbes article by Devin Thorpe describes the findings of his interviews with dozens of corporate executives of large and small companies in an effort to understand the benefits of corporate social responsibility (CSR) to the corporation.

Social license is, of course, an outcome from the ways that our companies and institutions communicate and engage with their stakeholders. This thinking needs to be linked with associated methodologies around Stakeholder mapping and analysis. There are a number of other pages on this site that also link to material relevant to this area. Risk communication and engagement is directly related, also Managing participation and engagement. A number of other related areas can be found through the social learning section.