Social license and environmental protection: Why businesses go beyond compliance

This article examines the concept of the corporate "social license," which governs the extent to which a corj)()ration is constrained to meet societal expectations and avoid activities that societies (or infiuential elements within them) deem unacceptable, whether or not those expectations are embodied in law. It examines the social license emjJirically, as it relates to one social problem-environmental protection-and as it relates to one particular industry: pulp and paper manufacturing. It shows why the social license is imj)()rtant, the circum~tances in which it may encourage comjJanie.~ 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.