social license to operate

Extracted Attributes

• Nature

  Intangible, informal, and bilateral

• Originator

  Canadian mining executive (Jim Cooney)

• Core Components

  Legitimacy, Credibility, and Trust

• Related Frameworks

  Corporate Social Responsibility (CSR); Environmental, Social, and Governance (ESG)

• Economic Impact of Loss

  $64 billion in data center projects blocked or delayed (2022-2024)

• Primary Risks of Absence

  Social protests, boycotts, regulatory increases, and project shutdowns

Timeline

• The term 'Social License to Operate' is coined by a Canadian mining executive to describe the necessity of community acceptance for resource projects. (Source: PMC7309895)

  1990-01-01

• Robert G. Boutilier and Ian Thomson publish research modeling and measuring the Social License to Operate as a dialogue between theory and practice. (Source: Georgetown Law Scholarship)

  2011-01-01

• J. Prno publishes an influential analysis of factors leading to the establishment of a social license within the mining industry. (Source: PMC7309895)

  2013-01-01

• A two-year period begins where community opposition leads to the blocking or delay of $64 billion in data center projects globally. (Source: Laisar Management Group)

  2022-01-01

• During a debate on the All-In Podcast, Chamath Palihapitiya identifies a severe perception problem for AI and argues the tech industry must earn a social license to operate. (Source: Document 91d256cb-fefd-40c1-84da-c89cadb68e4f)

  2024-01-01

Corporate social responsibility

Corporate social responsibility (CSR) refers to companies conducting their core operations in a responsible and sustainable way to create a positive corporate social impact. It is a form of international private business self-regulation which aims to contribute to societal and environmental goals by reducing harm, for instance by reducing a company's carbon footprint or increasing positive outcomes for all stakeholders. It is related to the company's commitment to be ethical in its production, employment, and investment practices. While CSR often takes the form of a philanthropic, activist, or charitable nature by supporting volunteering through pro bono programs, community development, and by administering monetary grants to non-profit organizations for the public benefit, corporations have been seen shifting to a holistic and strategic approach. Strategic CSR is a long-term approach to creating a net positive social impact based on brand alignment, stakeholder integration and ethical behaviour. Moreover, some scholars and firms are using the term "creating shared value", an extension of CSR which allows for social obligations to be met while the company reaps a profit. For publicly listed companies, CSR often takes the form of environmental, social, and governance (ESG) practices and reports, but many companies have pledged to go beyond that. In some countries, companies are mandated or incentivized by governments to measure and report their impact on society, the community, and/or the environment. In addition, national and international standards, laws, and business models have been developed to facilitate and incentivize this phenomenon. Various organizations have used their authority to push it beyond individual or industry-wide initiatives. Further, CSR has been considered a form of corporate self-regulation, shifting from voluntary decisions at the level of individual organizations to mandatory schemes at regional, national, and international levels. When focusing on corporate environmental responsibility, most firms use the term "sustainability" to explore the effort the company makes to reduce environmental harm such as by reducing waste and emissions, or by making a contribution through climate action and climate activism. Other companies focus more on their social impact, activism, or corporate citizenship. It is, therefore, important to know that CSR reports can take any of these names. Businesses engage in CSR for strategic, ethical, or instrumental reasons. From a strategic perspective, CSR can contribute to firm performance, particularly when CSR is embedded straticially in the company, aligned with its brand, and occurs when the company utilises its market position to create impact Doing so, could lead to higher levels of financial and employee performance. These benefits accrue by increasing positive public relations and high ethical standards to reduce business and legal risk by taking responsibility for corporate actions. CSR strategies encourage the company to make a positive impact on the environment and stakeholders including consumers, employees, investors, communities, and others. From an ethical perspective, some businesses will adopt CSR policies and practices because of the ethical beliefs of senior management: for example, the CEO of outdoor-apparel company Patagonia, Inc. argues that harming the environment is ethically objectionable. Proponents argue that corporations increase long-term profits by operating with a CSR perspective, while critics argue that CSR distracts from businesses' economic role. A 2000 study compared existing econometric studies of the relationship between social and financial performance, concluding that the contradictory results of previous studies reporting positive, negative, and neutral financial impact were due to flawed empirical analysis and claimed when the study is properly specified, CSR has a neutral impact on financial outcomes. Critics have questioned the "lofty" and sometimes "unrealistic expectations" of CSR, or observed that CSR is merely window-dressing, or an attempt to pre-empt the role of governments as a watchdog over powerful multinational corporations. In line with this critical perspective, political and sociological institutionalists became interested in CSR in the context of theories of globalization, neoliberalism, and late capitalism.

Web Search Results

• Your Company's Social License: Don't Wait for Crisis to Strike

  What Social License Really Means Social license to operate represents the ongoing acceptance and approval of a company’s practices by its stakeholders and the communities it affects. Unlike regulatory permits, this license isn’t issued by government agencies; it’s earned through trust, transparency, and demonstrated accountability. It operates on a spectrum from active opposition to enthusiastic support, and it can be lost faster than it is gained. [...] The term “social license to operate” might sound like corporate jargon, but it’s rapidly becoming the make-or-break factor for business success. This invisible permission slip—granted not by regulators but by communities, stakeholders, and society itself—determines whether your company can truly thrive or merely survive. For mature companies still questioning its relevance, consider this: $64 billion in data center projects have been blocked or delayed in just two years due to community

• What is a Social License to Operate and why your company needs it

  The Social License to Operate is neither a legal document nor an official certification. It refers to the level of acceptance and support a company receives from stakeholders in the areas where it operates. It is intangible and can change over time, as it depends on how communities perceive the company and its project. In other words, it is a relationship of trust and legitimacy that enables companies to move forward with their projects without blockages or social conflicts. [...] Having a Social License to Operate opens doors to regulatory approvals and attracts strategic partners who are looking to collaborate with sustainable companies. Reduces Risks and Conflicts Companies without a strong Social License to Operate may face social protests, boycotts, or even the loss of clients. Preventing these risks saves both economic and reputational costs. Aligns with the Sustainable Development Goals (SDGs) [...] In today’s context, the Social License to Operate is no longer optional — it is a necessity. Your company must not only comply with laws and regulations, but also meet society’s expectations. In a competitive environment, obtaining and maintaining this license will allow you to grow, innovate, and differentiate yourself, ensuring a sustainable future for your organization.

• The Importance of the Social License to Operate at the Investment ...

  The Social License to Operate and the Value Chain business model are basic elements that need to be considered both at the planning and operation stages of mining operations and in particular in coal mining projects. The term Social License to Operate (SLO) was coined by a Canadian mining executive during the 1990’s (Prno, 2013) and since then it has become an important factor when assessing the sustainability of mining projects. Although SLO was initially applied to mining projects, currently [...] also from the point of view of the society and the probable negative impacts to it, as the society grants the Social License to Operate to any mining company. For instance, the accidental release of chemicals to the ground could not only become a risk for the environment and have a negative impact to the local society, but also it could be transformed into financial risk for a coal mining company due to legal fines/penalties. [...] 33. Prno J. An analysis of factors leading to the establishment of a social license to operate in the mining industry. Resour. Policy. 2013;38(4):577–590. [Google Scholar]

• The Social License To Operate

  is often absent, and therefore may have to be built. That is why earning a Social License to Operate often involves building social capital in a process that is also known as ‘community building’, ‘capacity building’ and ‘institutional strengthening’, among others. [...] ## Social License Social License # The Social License has been defined as existing when a project has the ongoing approval within the local community and other stakeholders, ongoing approval or broad social acceptance and, most frequently, as ongoing acceptance. [...] More than fifteen years of accumulated research and experience has allowed recognition that the normative components Social License comprise the community/stakeholder perceptions of the social legitimacy and credibility of the project, and the presence or absence of true trust. These elements are acquired sequentially and are cumulative in building towards the Social License. The project must be seen as legitimate before credibility is of value and both must be in place before meaningful

• [PDF] The Corporate Purpose of Social License

  Importantly, unlike legal licenses, which can be applied and paid for, social license, or the license to operate, must be earned with consistent, trustworthy behavior, along with solutions and compromises achieved through dialogue with relevant sectors of the community.18 In this sense, social license is bilateral, not unilateral, connecting to the process and substance of publicness and differing considerably from legal license. This Article analyzes publicness and social license together, [...] Even if not explicit, businesses require both legal license and social license to operate. Social license derives not from legally granted permission, but instead from the development of legitimacy, credibility, and trust within the relevant communities and stakeholders. It can prevent demonstrations, boycotts, shutdowns, negative publicity, and the increases in regulation that are a Thompson, ‘‘Publicness” in Contemporary Securities Regulation After the JOBS Act, 101 GEO. L.J. 337 (2013); Joan [...] social license view it as more than simple risk management. It is just as much about joint understanding. See Robert G. Boutilier & Ian Thomson, Modelling and Measuring the Social License to Operate: Fruits of a Dialogue Between Theory and Practice, SOCIALICENSE.COM (2011), ng%20the%20SLO.pdf; Geert Demuijnck & Bjorn Fasterling, The Social License to Operate, 136 J. OF BUS. ETHICS 680, 680-81 (2016). 18 Demuijnck & Fasterling, supra note 17 at 675. See also Dirk Matten et. al., Behind the