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Glossary · ESG

Social License to Operate

The ongoing acceptance and approval of an organization's activities by local communities, stakeholders, and society based on meeting expectations.

Full definition
Social license to operate represents informal, intangible permission granted by communities and society to conduct business, distinct from legal licenses and permits. This acceptance depends on maintaining trust through responsible practices, community engagement, environmental stewardship, and delivering shared value. Loss of social license manifests through protests, boycotts, regulatory intervention, and reputational damage, potentially halting operations despite legal authorization. Maintaining social license requires continuous stakeholder dialogue and adapting to evolving societal expectations. Mining companies frequently encounter social license challenges; a Canadian gold mine faced indefinite suspension after indigenous community protests over water contamination concerns, despite holding all government permits, demonstrating that legal compliance alone cannot ensure operational continuity without community acceptance.
ESGstakeholder-managementreputational-riskcommunity-relations

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