Stakeholder signalling and strategic niche management: The case of aviation biokerosene.

This paper explores a case of reputation and stakeholder management in sustainability transitions. We use the case of aviation biofuel (biokerosene) to explore the complications around signalling in strategic niche management processes. Biokerosene is currently supplied at several Scandinavian airports in a low percentage blend, either as standard or upon request, although trials suggest that modern jet engines can reliably handle much higher percentage blends. Airlines, airports and biokerosene suppliers cooperate in a process of mutual strategic positioning that supports confidence-building and market development, while at the same time being intended to encourage positive stakeholder perceptions. A key challenge for the sector, however, is that signalling biokerosene as a response to aviation-related climate emissions is complicated by mixed societal perceptions of biofuel sustainability; and the policy and material conditions for affordable, sustainable, large scale supply of biofuel are lacking. Thus while parts of the sector would like to more clearly signal the value of existing and greater biokerosene use, interrelationships between reputational risks, supply constraints and economics limit this. By bringing stakeholder management theory to strategic niche management, we present a view of the latter as in part reputationally driven, in response to the uncertain legitimacy of a technology at an early stage in its market development. Image 1 • A relational view of the firm implies a role for stakeholders in strategic niche management. • Limited biokerosene use is examined from a strategic signalling perspective. • Non-technical uncertainties around biokerosene are constraining the extent of this signalling. • Biokerosene is an example of uncertain societal legitimacy limiting the diffusion of a niche technology. [ABSTRACT FROM AUTHOR]