MOS 4479: Business Ethics and Sustainability

Definition of Capitalism

An economic system that allows for private ownership of the means of production (land, labour, capital) and assumes that economic decision making is in the hands of individuals or enterprises who make decisions expecting to earn a profit.

What are the Three Central Features of Capitalism

(1) wage labour

(2) private ownership of the means of production

(3) production for exchange and profit

Definition of Laissez-Faire Capitalism

- Minimum government intervention

- Government strictly limited to police and fire protections

Definition of Free/Private Enterprise System

- An economic system characterized by ownership of private property by individuals and enterprises, the profit motive, a competitive market system, and a limited involvement by government.

- Responsible enterprise system: A form of free enterprise system where businesses are also responsible and accountable to society for their actions.

- Example; someone starting an online business, private restaurant chain

Definition of Stakeholder Capitalism

- Business accepts broader responsibilities beyond financial responsibilities with shareholders

- Balance the needs of shareholders with stakeholders such as employees, suppliers, customers, local communities

- Example; paying your employees a fair wage

Definition of Clean Capitalism

Incorporates social, economic, and ecological costs (and benefits) into the marketplace and the prices we pay

What are the Key Assumptions of Capitalism

(1) private property

(2) individualism

(3)Economic Freedom

(4) Equality of Opportunity (gender wage gap)

(5) Competition

(6) Profit

(7) Work Ethic

(8) Consumer Sovereignty

(9) Role of Government

Private Property

The legal rights to own and use economic goods (means of production) such as land and buildings

Individualism

- The individual, and not society or a collective, is the paramount decision maker in society

- The individual is inherently decent and rational

- Business makes the decision

- You do what is best for yourself

Economic Freedom

Few restrictions on business activity:

- Freedom to voluntary enter business

- Enter contracts

- Locate anywhere

- Choose occupation

- Choose goods and services for personal and business use

How Economic Freedom is Measured

- Property rights

- Taxation

- Government intervention

- Foreign investment

- Money and inflation

- Wage and price controls

- Corruption

Equality of Opportunity

Assumption that all individuals or groups have an even chance at responding to some condition in society

Competition

Many rival sellers seek to provide goods and services to many buyers

Profit

- The excess of revenues over expenses

- The "profit motive"

- Profit maximization

Work Ethic

Code of values, or a body of moral principles, claiming that work is desirable, it is natural activity

Consumer Sovereignty

The assumption that consumers have an exercise the power over producers through the decisions they make in purchasing the goods and services provided by business

Role of Government

In perfect capitalist market, government intervention would be virtually non-existing (enforcing contracts)

What are the Pros and Cons of Capitalism

Primary vs. Secondary (Stakeholder)

- Distinguishing feature: Nature of relationship

- Primary (reciprocal and direct exchange relationship): Employees, customers

- Secondary (indirect influence on the exchange relationship; no legal obligation): Media, society

Internal vs. External (Stakeholder)

- Distinguishing feature: Organizational boundary

- Internal: employees, shareholders

- External: society at large, local communities

Normative vs. Derivative (Stakeholders)

- Distinguishing feature: Has the business accepted benefits? Implies an added moral obligation if yes.

- Normative (yes): employees, customers

- Derivative (no): NGOs, the media

Shareholder View

shareholders advance capital to a company's managers, who are supposed to spend corporate funds only in ways that have been authorized by the shareholders

The Stakeholder View

managers have a duty to both the corporation's shareholders and individuals/constituencies that contribute, either voluntarily or involuntarily, to a company's wealth creating capacity and activities, and who are therefore its potential beneficiaries and/or risk bearers

What is the FOSTERing Model

- a framework for organizations to develop collaborative stakeholder relationships

- The FOSTERing model suggests how to move towards collaborating with stakeholders.

- involves six steps

(1) creating a foundation

(2) organizational alignment

(3) Strategy Development

(4) trust building

(5) evaluation

(6) repeat the process

What is the Basic Stakeholder Analysis

(1) who are our stakeholders?

(2) what are their stakes?

(3) What opportunities and challenges are presented to our firm?

(4)What responsibilities does our firm have to all its stakeholders?

(5) What strategies or actions should our firm use to deal with stakeholder challenges and opportunities?

What is the Position/Importance Matrix?

- a technique of categorizing an organization's stakeholders by their influence according to two variables and plotting them on a two-by-two matrix:

- allows managers to:

(1) assess power of stakeholders to achieve their demands

(2) whether they have means or resources to influence

- Y-Axis: oppose or support

- X-Axis: importance of stakeholder

- problematic, antagonistic, low priority, supporter

Problematic Stakeholders

those who would oppose the organization's course of action and are relatively unimportant to the organization

Antagonistic Stakeholder

those who would oppose or be hostile to the organization's course of action and are very important to the organization

Low Priority Stakeholders

those who support the organization’s course of action and are relatively unimportant to the organization.

Supporter Stakeholder

those who would support the organization's course of action and are important to the organization

What is the Diagnostic Typology

- matrix mapping (potential for cooperation/threat)

- Collaborate (mixed blessing stakeholders)

- Defend (Non-supportive stakeholders)

- Involve (Supportive stakeholders)

- Monitor (Marginal stakeholders)

Stakeholder Identification and Salience

- Salience → degree to which managers give priority to competing stakeholder claims

Stakeholder identification and salience based upon stakeholder possession of one or more of three attributes:

(1) Power → a relationship among social actors in which one social actor, A, can get another social actor, B, to do something that B would not otherwise do

(2)Legitimacy → Perception or assumption that actions of an entity are are desirable, proper, or appropriate

(3)Urgency → degree to which stakeholder’s claim or relationship calls for immediate attention; 1) time sensitivity (degree to which managerial delay is unacceptable to stakeholder, 2)criticality (degree to which stakeholder considers claim to be important)

- Classes of Stakeholders:

(1) Dormant (only power), discretionary (only legitimacy), or demanding (only urgency) stakeholders

(2) Dominant (power & legitimacy), dangerous (power and urgency) or dependence (legitimacy and urgency) stakeholders

(3) Definitive stakeholders (all three)

What is Frooman's Stakeholder Influence Strategies

- how do stakeholders try to act to influence the organization's decision-making/behaviour?

- Two general means of control over an organization:

(1)Withholding strategies → stakeholder discontinues providing a resource with intention of changing a certain behaviour

(2) Usage strategies → stakeholder continues to supply resource but specifies how it is to be used i.e. attaches conditions

- Resource dependence also arises from relationships between stakeholders:exists when a stakeholder is supplying a resource and can exert some form of control over it

What Influences Ethical Behaviour

- Influences become bases for an individual's value judgements and moral standards that determine behaviour

- Ethical relativism

Belief that ethical answers depend on the situation and no universal standard or rules exist to guide or evaluate morality

- Five Categories:

(1) influence of individuals

(2) corporate or organizational influences

(3) economic efficiency influences

(4) government and legal system influences

(5) social influencies

What is Kolberg's Model

- Kohlberg maintains that his stage sequence is universal

- Same in all cultures

- Stages refer not to specific beliefs, but underlying modes of reasoning

- Suggests that people continue to change their decision priorities over time and with additional education and experience.

- Individual's moral development can be influenced by corporate culture and ethics training.

What Self-Interest Ethic (ethical egoism) - Normative Theory

- Individuals or corporations set their own standards for judging the ethical implications of their actions (individual values and standards)

- It is acceptable for an individual to be appropriately self-concerned as long as interests of others are considered

- Enlightened egoist: attentive to needs of others, and self-interest provides an incentive to restrain one's self-interest

- "Maximization" of profits is acceptable as long as interests of relevant stakeholders are considered

- Corporation must stay within rules of operation provided in society through government

What are the Problems with Self-interest Ethic

- Considered easy way out because person relies on own beliefs without more complicated analysis

- Viewed as selfish behaviour

- Leads to absolutism; failing to take into consideration interest of others

Utilitarian Ethics - Normative Theory

- Focuses on the distribution of benefits and harms to all stakeholders with the view to maximizing benefits

- "The greatest good for the greatest number."

- Act-Utilitarian: Examines the specific actions itself versus rule

Set aside the rule only if increase in net utility to all stakeholder

- Rule-Utilitarian: Bases behaviour on rules designed to promote the greatest utility

What are the Problems with Utilitarian Ethics

- Does not account for what is just

- What should be maximized to result in a community's happiness?

- Cannot accurately measure some costs and benefits (and/or risk of miscalculating them)

- No method for distributing costs or benefits

- Violation of rights

Universal Rules Ethics - Normative Theory

- Ensures that managers or corporations have the same moral obligations in morally similar situations

- “What individuals believe is right for themselves, they should believe is right for all others”

- Persons should be treated as end in themselves, worthy of dignity and respect and never as a mean’s to one’s own ends

- Categorical imperative ethics: rules and morals in society should be fair to everyone, they should universally apply and apply over time

What are the problems with Universal Rules Ethics

- Difficult to determine if someone is being used merely as a means to an end

- Not possible to always work to universal rules i.e. exceptions exist

- No scale between actions that are considered morally right or wrong

What is Individual Rights Ethic - Normative Theory

- Relies on a list of agreed-upon rights for everyone that will be upheld by everyone and that becomes the basis for deciding what is right, just, or fair

- Examples: Rights to safety, information, privacy, property

- Governments identify rights in constitutions

What are the problems with individual rights ethics

- Determining and agreeing upon the list of rights

- Rights and/or holders of those rights can be in conflict

- Rights are not absolute and overemphasis on one might result in injustice

What is Ethic of Justice - Normative Theory

- Considers that moral decisions are based on the primacy of a single value: justice which will result in fair outcome

- Ethical dilemmas arising from a conflict among rights that can be resolved by the impartial application of some general principle

- Each permitted the maximum amount of basic liberty compatible with others.

- Social and economic inequalities are allowed only if benefit all.

- Treat equals (i.e., those with equal claims) equally and unequal (i.e., those with differing claims) unequally

- Different types of justice:

(1)Procedural justice

(2)Compensatory justice

(3)Retributive justice

(4)Distributive justice

Advantages and Disadvantages for Ethichs of Justice

Advantages

- Looks at dilemmas logically and impartially

- All are perceived to have a equal right to equitable treatment

Disadvantages

- Difficult to decide, outside of the law, who has the moral authority to reward or punish whom

- Ensuring benefits distributed fairly is challenging

- Interests of particular stakeholders may be overlooked

- Can be perceived as being impersonal, inflexible, cold and uncaring

What is the Personal Virtues Ethic - Normative Theory

- An individual's or corporation's behaviour is based upon being a good person or corporate citizen

- Stress importance of developing good habits of character

- Emphasizes traits (virtues) such as courage, honesty, wisdom, temperance, justice and generosity

- People should act in ways to convey honour, pride and self-worth

- Virtues are acquired through learning and practice, and will become habits

'right time, right way, right amount, and right reason'

- considers the attainment of happiness or 'eudaimonia'

- Focuses on virtuous character, intention and process

- "Does this action represent the kind of person I am or want to be, or present the desired corporate image or reputation?"

What is the Four Component Model of Morality (FMC)

- The four independent and necessary processes that contribute to moral behaviour

(1) Moral Sensitivity:

Ability to identify what is ethical and unethical

Interpret each situation in terms of possible alternatives, stakeholders (including oneself) and impact on stakeholders

(2) Moral Judgement: ability to reason through several courses of actions and making the right (just or fair or morally correct) decision when faced with an ethical dilemma

What a person ought to do (morally)

(3) Moral Motivation: Give priority to moral values above others (e.g. personal), so that the intention behind the decision was to do the morally right thing

(4) Moral Implementation: having one's ethical intentions match actions taken (e.g. through perseverance, implementation skills, not succumb to obstacles, withstand fatigue and flagging will, etc.)

What are the Steps of the Moral Reasoning Process

(1) Define moral issue or decision

(2)Gather all relevant information

(3)Identify the stakeholders involved

(4)Develop possible alternative solutions

(5)Consider applicable value judgments, moral standards, principles

(6)Identify harms/benefits to stakeholders

(7)Determine practical constraints

System One

- thinking is an intuitive system of processing information

- fast, automatic, effortless, and emotional

System Two

- thinking is a reasoned decision process

- slower, conscious, effortful, explicitly

Equity, Diversity and Inclusion (EDI)

- Equity, Diversity and Inclusion initiatives intersect in important ways. Pursuing Equity can increase the Diversity of a community, so it looks more like the broader population. However, one can imagine a Diverse community which is not Inclusive and therefore does not enable people's full participation - hence the need to advance on all of these fronts.

- Decolonization helps to deepen all of these elements. Decolonization is a necessary and ongoing process of unlearning, uncovering, and transforming legacies of colonialism, as well as utilizing the educational and knowledge systems available to relearn and rebuild the social, cultural, and linguistic foundations that were lost, or eroded through colonialism

Equity Defined

the removal of systemic barriers (e.g., unconscious bias, discrimination, racism, sexism, ableism, homophobia, etc.), enabling all individuals to have equitable opportunity

Diversity Defined

the variety of unique dimensions, identities, qualities and characteristics individuals possess along with other identity factors

Inclusion

the practice of ensuring that all individuals are valued and respected for their contributions and are supported equitably in a culturally safe environment. Inclusion is the creation of an environment where people feel welcome, respected, and able to participate fully.

Managerial Approaches to Ethics: Immoral

•A posture or approach that is devoid of ethical principles and actively opposed to what is moral

•Management's motives are selfish and it cares only about the individual's or the organization's gains

•Management to some degree knows right from wrong and chooses to do wrong

•May be motivated by greed and profitability, and organizational (or personal) success is the goal to be achieved at any price

•Do not care about claims or expectations of others

•The law is regarded as a barrier to be overcome and will circumvent if it will achieve their ends

Do not make good corporate citizens

Managerial Approaches to Ethics: Amoral

•A posture or approach that is without ethics, but not actively immoral

•Two types: intentionally or unintentionally amoral

•Intentionally amoral leaders do not consider ethics, as they believe business activity lies outside of moral judgments; neither moral nor immoral, as different rules apply to business

•Unintentionally amoral leaders are morally careless, unaware of or inattentive to impact of their decisions on others

•They lack ethical perception, sensitivity, or awareness

May be well-intentioned but unaware of harms from their actions

•"Ethical gears in neutral"

•Use letter of the law instead of spirit

Cannot make good corporate citizens

Managerial Approaches to Ethics: Moral

Conform to high standards of ethical behaviour or professional standards

•Aspire to succeed only within confines of ethical principles; for example fairness, justice, and due process

•Concerned with letter and spirit of the law

•Prefer standards that are higher than the minimum set by the law

•Assume leadership when ethical dilemmas arise

•Make ethics a driving force of the organization

Financial Botton Line Management (FBL)

- Maximizes financial performance

- A consequential utilitarian logic

- Competitive Advantage: The resource-based view (valuable, rare, non-substitutable, inimitable)

Triple Bottom Line (TBL) Management

- Maximizing financial, social and ecological performance

- An enlightened consequential utilitarian logic

Social and Ecological Thought Management (SET)

- Prioritizing social and ecological performance over financial performance

- Aiming viable financial performance

- A virtue ethics logic

- competitive advantage: radical resource-based view (Based on virtue theory and a less individualist/materialist perspective

Shifts away from profit 'maximization' to a 'viable' level)

Moral Person

- Traits: Integrity, honesty, trustworthiness

- Behaviors: do the right thing, concern for people, being open, personal morality

- Decision-making: hold to values, objective/fair, concern for society, follow ethical decision-rules

Moral Manager

- Role-modeling through visible action

- Rewards and discipline

- Communicating about ethics and values

Statement of Values

- A description of the beliefs, principles, and basic assumptions about what is desirable or worth striving for in an organization.

- Key components to value statements:

(1) Key stakeholder interests to be satisfied and balanced

(2) Emphasis on quality and excellence

(3)Efficiency focus

(4)Work climate, organizational culture

(5) Observance of codes of conduct

Code of Conduct

- explicitly states what appropriate behaviour is by identifying what is acceptable and unacceptable

- Enforced by an external power and authority; convey rules that tell people what they must or must not do. Members of organizations must obey or face penalties for failing to do so.

- Key Characteristics:

Imposed by others

What must be done or what must not be done

Rules

Code of Ethics

a statement of principles or values that guide behaviour by describing the general value system within which a corporation attempts to operate in a given environment

- Codes of ethics suggest guidelines to follow and empower individuals to act according to their consciences. Penalties are not imposed and writers emphasize the qualities they think members should have.

- Key Characteristics

(1) self-imposed

(2) who we are

(3) what we stand for

(4) guidelines or guiding principles

Conflicts of Interest

When an individual has a private or personal interest that is sufficient to appear to influence the objective exercise of that individual's duties

What are the Three types of Conflict

(1) real

(2) apparent

(3) potential

What are the 8 common conflicts of Interest

(1) Self-dealing: Exists where a manager or employee takes an action in an official capacity that involves dealing with oneself in a private capacity and that confers a benefit to oneself. Today this extends to one's spouse, family members, and business partners.

(2) Accepting gifts or benefits: involves the acceptance of some benefit.

(3) Influence peddling: The practice of soliciting some form of benefit; for example, asking for a kickback or gift from a supplier if a purchase is made.

(4) Using employer's property: The inappropriate use of an employer's property; for example, taking office supplies for home use.

(5)Using confidential information: the use for personal or private purposes of confidential information obtained from some other source, for example customers or suppliers, to gain some benefit.

(6)Outside employment or moonlighting: The work or activity in which an employee engages outside normal working hours for additional remuneration.

(7) Post-employment: Subsequent or future employment where information or contacts obtained during employment results in some benefit.

(8) Personal conduct: The situation where an employee's behaviour in private life may reflect adversely on the employer.

Ethics Training

- Involves teaching employees about the values and policies on ethics they should follow in their decision making

Teaching sessions can involve:

- Managers or outside consultants

Addressed to all levels of employees, with emphasis on management

- Online exercises

- Practical checklists and tests to evaluate actions

Ethics Training: Pagano Model

identifies six tests that provide insights into the ethics of a business' actions:

1. Is it legal

2. Benefit/cost test

3. Categorical imperative

4. Light of day test

5. Do unto others

6. Ventilation test

Ethics Officers (Managers)

- independent manager who:

(1)Reports to the board of directors or CEO

(2)Reviews complaints or information from anyone in the organization or any stakeholder

(3) Studies situation and recommends action if necessary

Compliance Officer (Auditor)

ensures all employees are familiar with corporation's policies and codes, and with government laws and regulations

Ethics Committees

group of directors, managers or staff formed to monitor ethical standards and behaviour

Whistleblowing

- Ethics reporting systems often take the form of "hotlines"

- Act of voluntary disclosure of inappropriate behaviour or decisions to persons in positions of authority in an organization

- Issues:

(1) Remain silent, quit, or disclose wrongdoing?

(2)Range of concerns from clearly illegal to maybe illegal to issue of morality

(3) Does obligation to employer supersede obligation to self, profession, or industry?

(4)Will the whistleblower be believed?

(5)Is the whistleblower a hero or a snitch?

(6)When and who to tell?

(7)What will the consequences be?

Establishing an Ethical/Responsible Culture

- Corporate culture is the shared beliefs of employees and top managers in a company about how they should manage themselves and other employees, and how they should conduct business.

- Be a role model and be visible

- Communicate ethical expectations; promote humility

- Offer ethics training and skill building

- Visibly reward ethical acts and punish unethical ones

- Provide protective mechanisms and the tools people need to act ethically

- Give back, e.g. through volunteer work

Benefits of Ethics Programs

- Business practices more beneficial to society

- Increased awareness of ethics

- Alignment of corporate behaviour with values

- Heightened ethical sensitivity of employees and managers

- Sensitizes managers and employees to legal requirements

- Avoidance of criminal acts

- Integration of values with quality and strategic management

- implications of management decisions on stakeholders

- More favourable public image

Why Ethical Leadership and Programs Fail

- Managers are morally imperfect

- Self-interest

- Rationalization and self-delusion

- Threat of formal sanctions

- Threat of informal sanctions

- Tolerance to risk-taking behaviour

- Pressure in particular situations

Disadvantages of CSR

- Manager's are agents, not principals. Therefore, CSR is spending the shareholder's money against their will

- Corporations are not equipped to decide what is best for society

CSR reduces efficiency and personal freedom

- Business should focus on maximizing profit as long as it stays within the rules of the game (engages in free and open competition without deception or fraud) [Economic model of CSR]

- It takes the societal needs out of public hands (e.g. government) and places it into private hands

- Voluntary CSR is not enough. Mandatory measures are necessary

- What does "responsibility" even mean? What about accountability?

Advantages of CSR

Ethics

- Utilitarian, universal rules, rights, justice, virtue

Legitimacy

- the existence of the business system depends on its acceptance by society. If business is to prevent criticisms or mutinous behaviour, it must be receptive to what is happening in society and respond in some way

The business Case for CSR

- CSR reduces costs

- CSR increases reputation

- CSR reduces risk

- Possible tax benefits

- Possible tie-ins with product/marketing

- CSR can lead to identification of new opportunities

- CSR is a source of competitive advantage

- Win/Win for everybody!

Stakeholder Management vs CSR

STAKEHOLDER MANAGEMENT

- There is no place in organization that does not have a stake in the company

- Will not help social issues, that do not have have a stake in the company

- Expectation that stakeholders will respond → mutual

- Do good for society when it makes good business sense

CSR

- Business can do what it good for society

- This is a global concept

- No expectation for society to do something for the business

- More philanthropic

What is CSR?

- The way a corporation achieves a balance among it economic, social, and environmental responsibilities in its operations so as to address shareholder and other stakeholder expectations

- CSR is about making sure that a business operates in a responsible way toward society and does so beyond the narrow economic, technical and legal requirements of the firm in the pursuit of some social good , beyond the interests of the firm (advantage)

What are the assumptions of CSR

- Corporations have responsibilities beyond the production of goods and services

- These responsibilities involve helping to solve social problems, especially those they have helped create

- Corporations have a broader constituency than just shareholders alone

- Corporations have impacts that go beyond simple marketplace transactions

- Corporations serve a wider range of human values than can be captured by a sole focus on economic values

CSR in Practice

Corporate Giving: donations, charitable foundations, cause-related marketing, strategic giving

Corporate Voluntarism:

- the time and talent employees commit to community organizations with support and/or consent from employers who recognize the value of such efforts to society

- makes employees like the company more

- Be Careful to not force your employees to do so

Corporate Sponsorship:

- a partnership, which has been established for mutual benefit between a business sponsor and an event or a non-profit

- Charity or marketing?

Do it for a return →

Social Venture Philanthropy: The investment of human and financial resources by corporations in non-profit community development agencies to generate a social return instead of only a financial one

Community Investment: Efforts - of corporation to help develop a community and create economic opportunities through variety of means

- Social enterprise: model of business operation where some or all profits are deliberately used to further social aims

Stakeholder Theory vs CSR

- perspective on business: CSR is more focused on society while ST takes more holistic approach

- Beneficiaries of responsibility: Society and community-at-large whereas ST focuses on all stakeholders

- Direction of responsibility: CSR is unilateral

SASOL Net Zero

- Targets: 20% reduction in Energy scope 3 emissions by 2030 and 30% reduction in global scope 1 and 2 emissions by 2030(an increase from the 10% reduction announced in 2019)

SASOL Sustainable Development Goals

(1) no poverty

(2) zero hunger

(3) good health and well-being

(4)quality education

(5) gender equality

(6) clean water and sanitation

(7) affordable and clean energy

(8) decent work and economic growth

(8) decent work and economic growth

What is the Corporate Power Debate

- several critics have suggested that the power of corporations poses threats to democracy

- business involvement in politics

corporate lobbying

- globalization and the reduced roles of government

Types of Regulation

(1) Government: government regulate operations of business through commission, tribunals, agencies and boards

(2) Self-regulations: regulation imposed by the corporation or industry not directly by the government or market force

(3)Private: non profit, independent, organizations that set standards for responsible business practices

(4) Market: less need for government -imposed laws or regulations. Corporation regulated by dynamic forces of free market, consumers can force corporation to behave in particular ways by refusing to purchase goods or service, or through boycotts or social media pressure

Agency Issues

- lower principle-agent issue due to greater involvement of family owners

- higher principal-principal issues due to conflicts of interests between family vs non-family owners (family owners like to maximize socioemotional wealth whereas non-family owners like to maximize financial wealth or value of the corporation)

Temporal Motivation

- greater long-term orientation: the tendency to prioritize the long-range implications and impact of decisions and actions that come to fruition and extended time period

Social and Environmental Performance

- lower tax aggressiveness

-lower earnings management

- lower voluntary disclosure but more earnings warnings

- lower layoffs

-lower pollution

-likely to possess placebasedness in the organizational culture

- issues related to nepotism and preferential treatment of family employees

- issues related to extracting private benefits and preserving control

- issues related to succession and conflict between family members

What are the Three Scope Emissions

Scope 1: "direct" emissions - those that a company causes by operating the things that it owns or controls. these can be a result of running machinery to make products, driving vehicles, or just heating buildings and powering computers

Scope 2: "indirect" emissions created by the production of the energy that an organization buys

Scope 3: indirect emissions: meaning those not produced by the company itself they are produced by customers using the company's products or those produced by suppliers making products that the company uses

Scope 4 (voluntary metric): any reduction in emissions that occur outside of a product's life cycle or value chain but as a result of the use of that product

What is SASOL?

Sasol, established in 1950 by the apartheid South African government, aimed to reduce the nation's dependency on outside oil by producing fuel and chemicals from coal. It developed synfuels plants in Sasolburg and Secunda and invested significantly in infrastructure and research.

What is a 'Just Energy Transition'

- Defined by the International Trade Union Confederation, a just transition aims to ensure the livelihoods of workers and communities during the shift to a low-carbon economy. It emphasizes social dialogue, collaboration among stakeholders (workers, employers, governments, and civil society), better job opportunities, social protection, training, and job security for those affected by climate policies.

What is a Linear Economy?

- A linear model deals with raw materials in an inefficient way, because the emphasis is not on their conservation

- focuses on profitability

What is a Circular Economy?

- targets sustainability

- Production that has as little impact as possible on the environment by leaving less of a footprint.