Understanding and defining the social license to operate: Social acceptance, local values, overall moral legitimacy, and ‘moral authority’

Abstract

‘Social licence to operate’ (SLO) has become a widely used term in discussions of corporate ethics and social responsibility, both in scholarship and lay discourse. Despite this, the term has no settled meaning. Early definitions referred simply to ‘social acceptance’ by relevant stakeholders, specifically those who were directly impacted, or could directly impact on, the operations. Other understandings of SLO highlight the key drivers of acceptance, and still others refer directly to moral values. In this conceptual framework paper, we draw on parallel distinctions that arise with the term ‘legitimacy’, to provide definitions of each of these three ways of understanding SLO. However, there is a further, more unique sense of SLO that implies that operations should have community acceptance. We suggest this version of SLO refers to a community's acceptance of operations in a case where that community holds a ‘moral authority’ over those operations. We show how these four distinct understandings of SLO usefully direct attention to different yet important social and ethical dimensions of industry operations, and help to clarify the complex relationship between social acceptance and overall moral legitimacy. We also discuss cases where equivocation between different meanings can be problematic. • Like the term ‘legitimacy’, social licence to operate (SLO) has several meanings. • SLO definitions can help clarify how local acceptance impacts moral legitimacy. • SLO's shifting usages can encourage industry to unduly localise their ethical focus. • Clarifying SLO's meaning allows critical interrogation of its role in arguments.