Social License and Environmental Protection: Why Businesses Go Beyond Compliance

Abstract

This article examines the concept of the corporate “social license,” which governs the extent to which a corporation is constrained to meet societal expectations and avoid activities that societies (or influential elements within them) deem unacceptable, whether or not those expectations are embodied in law. It examines the social license empirically, as it relates to one social problem–environmental protection–and as it relates to one particular industry: pulp and paper manufacturing. It shows try the social license is important, the circumstances in which it may encourage companies to go “beyond compliance” with regulation, how its terms are monitored and enforced, and how it interacts with what we term the regulatory and economic licenses. Overall, this research demonstrates that corporate environmental behavior cannot be explained purely in terms of instrumental threats and moral obligations to comply with the law, and that the increasing incidence of “beyond compliance” corporate behavior can be better explained in terms of the interplay between social pressures and economic constraints.

Compliance with vessel speed restrictions to protect North Atlantic right whales

“…Voluntary actions and incentives are approaches that have been widely used and can be effective in reducing environmental impacts (Dietz & Stern, 2002; Gunningham, Kagan & Thornton, 2004; Stafford, 2012). However, in regard to the conservation issue of vessel strikes of large whales, mandatory and enforced changes in vessel operations appear to have considerable conservation value while adherence to—and therefore effectiveness of—previously implemented voluntary measures to reduce whale disturbance (Wiley et al, 2008) and vessel/whale collisions (Silber, Adams & Bettridge, 2012) was low.…”

“…However, in many regulatory settings, limited resources may restrict enforcement actions and assessments of compliance to infrequent inspections (e.g., site visits), surveys, interviews, or self-reporting (Winter & May, 2001; Gunningham, Kagan & Thornton, 2004; Gray & Shimshack, 2011). …”

Does Corporate Social Responsibility Put Reputation at Risk by Inviting Activist Targeting? An Empirical Test among European SMEs

“…Still, it is likely that the reputation liability effect is dependent on company size (Gunningham et al, 2004). Previous research has shown that SMEs are heterogeneous in nature (Brammer et al, 2012).…”

Going beyond the search for solutions: understanding trade-offs in European integrated multi-trophic aquaculture development

“…However, to operate effectively within a community and to expand, an industry requires a social licence to operate, going beyond what is just required for strict compliance with the regulation or law (Gunningham et al 2004). One of the barriers to the development of aquaculture in Europe is limited access to new sites.…”