Glossary

The SA8000 Standard and Certification System provide a framework for organisations of all types, in any industry, and in any country to conduct business in a way that is fair and decent for workers and to demonstrate their adherence to the highest social standards.

Source: SAI

Scenario Analysis is a tool whereby enterprises identify and assess a set of different, possible events or scenarios that may occur as means of identifying a set of potential response actions plans and determining the best course of action to avoid and/or mitigate against risk and negative impact. Scenario analysis helps build enterprise resilience by ensuring they are more prepared for different eventualities.

Scope 1 or direct use GHG emissions are caused by sources owned or controlled by the enterprise that occur within the enterprise’s organizational boundary (i.e. stationary combustion, mobile combustion, process emissions and/or fugitive emissions).

Scope 2 or indirect GHG emissions arise from the generation of purchased electricity, heating, cooling and steam. Scope 2 emissions are indirect because they occur at sources owned or controlled by another organization (e.g. electricity provider) but occur as a consequence of enterprise activities.

Scope 3 emissions or other GHG indirect emissions occur along the entire value chain as a consequence of enterprise activities. Scope 3 emissions include those that occur as a result of employee commutes to work, business travel, the extraction and production of purchased materials used by the enterprise, transportation of purchased fuel, the use of enterprise sold products and services (including through treatment of final product waste) and data management practices.

Sustainable Development Goal

Sustainable Development Goal Disclosures

SEDEX is an international database of audits conducted against the ETI base code which is used to help businesses assess the impact of using different suppliers. These audits are known as SMETA audits – SEDEX Members Ethical Trade Audit. Audits can be requested through SEDEX by member enterprises for their suppliers or proposed suppliers or by customers of an enterprise.

Sustainable Europe Investment Plan

Scale and scope of actual and potential impact

Sulphur Hexafluoride (Greenhouse Gas)

Sustainable Finance Disclosure Regulation

The concept of shared value encourages enterprises to expand their view of value beyond that of solely financial value and to extend their ambition of creating value solely for the enterprise to creating value for additional stakeholders in parallel.

Michael E. Porter and Michael R. Kramer published a seminal article in the Harvard Business Review in 2011 entitled “Creating Shared Value. How to reinvent capitalism – and unleash a wave of innovation and growth.” They believe many enterprises are trapped in a short-term value-creation cycle, driven by shareholder demands of quarterly (or other similarly short term period) financial growth. This pressure prevents enterprises from taking a broader or longer-term view of what might better serve their customers and everyone else impacted by their operations. It locks them into unsustainable practices such as the depletion of natural resources and contributes to other stress points, such as employee, customer, supplier and community well-being. Whilst shareholders may be satisfied, ignoring the bigger picture is in fact a false economy as it threatens the longer-term viability of an enterprise by negatively impacting stakeholders who can in turn hurt the enterprise. Unhappy stakeholders can drive a reduction in sales, increase the threat of litigation and fines and damage an enterprise’s reputation through negative publicity which in turn weakens or withdraws an enterprise’s social license to operate.

Porter and Kramer tell us the principle of shared value “involves creating economic value in a way that also creates value for society by addressing its needs and challenges. Business must reconnect enterprise success with social progress. Shared value is not social responsibility, philanthropy, or even sustainability, but a new way to achieve economic success”.

Source: Porter, M.E. and Kramer, M.R. (2011) The Big Idea: Creating Shared Value. Harvard Business Review, 89, 2-17.

Small Island Developing States

Location where carbon is stored or sequestered. Natural reservoirs include the atmosphere,
land (peatlands, forests, rocks, soil etc.), the ocean and fossils

Service Level Agreement

Small to Medium sized Enterprises

Subject Matter Experts

Senior Management Team

"The provision of finance to organisations addressing social needs with the explicit expectation of a measurable social, as well as financial, return."
Source: OECD
See Also: Impact Revolution, Sir Ronald Cohen

An enterprise’s social license to operate is an intangible indicator of an enterprise’s legitimacy.

Legitimacy is defined as “ a generalized perception or assumption that the actions of an entity are desirable, proper, or appropriate within some socially constructed system of norms, values, beliefs, and definitions.”

Source: Legitimacy definition Suchman 1995

Solar Radiation Management

Supplier Relationship Mnagement

A stakeholder is defined as “any group or individual who can affect or is affected by the achievement of the organization’s objectives”.
Stakeholders can include owners, employees, customers, suppliers, governments, industry regulating or standards bodies, banks, investors, lenders, insurers, unions, local communities, NGOs, environmental & social justice groups and the media.

Source: Freeman 1984
See Also: Freeman, Harrison, Wicks 2007; Freeman, Harrison, Zyglidopoulos 2018

An enterprise is wholly dependent on its’ stakeholders for all of its’ inputs (e.g. finance, labour, materials, technology, social license to operate etc.) and outputs (e.g. sales, profit, etc.). Its success & reputation therefore, is determined by how well it understands and manages its’ stakeholders and how it incorporates their needs, wants and concerns into its strategic planning and operations.

Stakeholder capitalism represents the ideological shift from the traditional Friedman-esque ‘management of stakeholders’ or ‘management for shareholders’ approach to a ‘management for all stakeholders’ approach. This shift includes a transition from short-term to long-term thinking and requires enterprises to earn their social licence to operate.

Klaus Schwab, founder and executive chairman of the World Economic Forum (WEF) and a proponent for ethical business conduct since the 1970s has used his global platform of the Annual Davos Summit to promote a new global economic model of Stakeholder Capitalism which “works for Progress, People and Planet”. Schwab describes stakeholder capitalism as a system where, “the interests of all stakeholders in the economy and society are taken on board, enterprises optimize for more than just short-term profits, and governments are the guardians of equality of opportunity, a level-playing field in competition, and a fair contribution of and distribution to all stakeholders with regards to the sustainability and inclusivity of the system.”

Source: Schwab and Vanham, 2021a; Schwab and Vanham, 2021b; Davos Manifesto 1973: A Code of Ethics for Business Leaders; Schwab, 1971

A stakeholder group is any group "who can affect or is affected by the achievement of the organization’s objectives”.
Stakeholder groups can include owners, employees, customers, suppliers, governments, industry regulating or standards bodies, banks, investors, lenders, insurers, unions, local communities, NGOs, environmental & social justice groups and the media.

Source: Freeman 1984
See Also: Freeman, Harrison, Wicks 2007; Freeman, Harrison, Zyglidopoulos 2018

All direct (i.e. Tier 1) suppliers and indirect (i.e. Tier 2...Tier n) suppliers of suppliers who are involved in the supply of inputs to the enterprise.

First coined in the 1987 Brundtland Report,  “Our Common Future: Report for the World Commission on Environment and Development” sustainable development is development that “meets the needs of the present without compromising the ability of future generations to meet their own needs”.

Source: World Commission on Environment and Development, 1987
See Also: UN GA 2015, UN Sustainable Development Goals (SDGs), Take Action for the SDGs

The UN Sustainable Development Goals are an 17 goals and 169 targets within 5 pillars - People, Planet, Prosperity, Peace & Partnership which are described as “the blueprint to achieve a better and more sustainable future for all. They address the global challenges we face, including poverty, inequality, climate change, environmental degradation, peace and justice”.

Source: UN SDGs, Transforming our World: the 2030 Agenda for Sustainable Development