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Purpose: This paper aims to discuss how transnational universities create negative and positive social impacts on their host communities and what this means for campus sustainability and the expectation that universities contribute to sustainable development and to their local communities. Design/methodology/approach: Using mixed methods, a multiple case study approach and qualitative meta-analysis, this study considers six transnational university campuses in China in terms of their relationship with local communities. Findings: Because of the good reputation of universities generally, local residents tended to accord a social licence to operate (i.e. approval) to new university campuses. However, universities generally do not manage their social impacts, as well as many other industries and generally fail to consider the corporate social responsibility issues and the environmental, social and governance aspects of their activities. To improve their social licence to operate and grow and to meet expectations around "university social responsibility", campus developments should observe key international principles and human rights standards: full disclosure of information; effective community engagement; appropriate resettlement and livelihood restoration; effective harm reduction procedures; provision of local benefits (benefit sharing); monitoring and adaptive management and implement a grievance redress mechanism. Originality/value: This paper encourages broader thinking about sustainability in a higher education context and about what university social responsibility entails. Specifically, this study argues that the relationship between universities and their host communities also needs to be considered, especially during campus construction. [ABSTRACT FROM AUTHOR]