The name Tesla is not strange to anyone, thanks to its invention of electric cars, but is Tesla an ethical company? Since the beginning, Tesla has been making waves in the car industry with its innovative ideas.
While the company claims to build scalable, sustainable technologies that positively impact the environment, the question of whether they are genuinely ethical comes up.
Generally speaking, an ethical business does not engage in practices such as polluting the environment and paying its employees at low rates. Of course, most companies operate for profit, but ethics need not stand in the way of commercial success.
From the get-go, Tesla prioritized a comprehensive strategy that would centre on a new, sustainable business model for the transportation sector. It also guarantees that all employees in the supply chain will be paid a living wage and treated with respect and dignity.
This article will examine whether Tesla lived up to its sustainability claims and can be considered an ethical company.
What Is An Ethical Company?
Something that abides by moral norms is considered ethical. Also, respect for fundamental moral principles like Integrity, justice, equality, dignity, diversity, and respect for human rights is a big part of being ethical.
You can’t exactly put a finger on what exactly makes a company ethical, but the goal is to earn a profit while minimizing the risk your business causes to others. Thus, there’s a delicate balance between making decisions that benefit your wallet and those that don’t hurt anyone else.
Companies with solid ethical standards recognize the distinction. Ethics are not legally binding, but they can significantly affect how your company functions (unless you’re a nonprofit).
Being ethical is about being conscious of how your business practices affect people, animals, and the planet. The company’s choice depends on how it might affect one of these categories of people or the environment in which it operates.
Ethical companies give an account of their carbon emissions and set reduction targets that comply with international agreements like the Paris Accords. They also uphold strong moral standards for employees to feel at ease and confident in their workplace.
Some brands still think of ethics as simply “doing no damage,” but others have seen the enormous possibilities of an ethical approach to business.
Overall, a company is more likely to do well and grow if it is willing to create a mission that shows what it stands for in terms of ethics.
What Does Tesla Do? Is Tesla an Ethical Company?
Elon Musk is a billionaire who started and is now CEO of Tesla, a company that makes electric cars and clean energy. The company has grown quickly to become one of the largest makers of all-electric cars in the world.
The company’s subsidiary, Tesla Energy, produces and sells solar panels, solar roof tiles, and other solar energy-related goods and services. In addition to being a significant installer of solar energy-producing systems, it is one of the world’s largest battery storage systems producers.
Tesla makes it possible for commercial and residential customers to generate solar power and store it in a Powerwall battery. It also wants to make sure its batteries last longer and are recycled in an environmentally friendly way.
The company has taken a long-term view by tackling two pressing sustainability imperatives:
- the shift to a carbon-neutral economy and
- the immediate need for a new business model which is sustainable for the transportation industry.
Tesla’s strategy is to provide more value to its consumers and the world. It aims to “accelerate the world’s transition to sustainable energy” through renewable resources. Tesla automobiles have gained notoriety not only for their cutting-edge engineering but also for their sleek design.
Its mission is to make the car desirable and practical so that future electric vehicles can gain traction in the market. With the times constantly shifting, Tesla is constantly introducing new products to appeal to a broader audience. Tesla Motors has opened offices in the United States and China to maintain its foothold in the luxury electric vehicle market.
The Supercharger charging station for electric vehicles was the subject of a patent granted to Tesla on October 13, 2014, making it one of the company’s most important patents. Having this patent protects them against competition that might steal their ideas and inventions.
Tesla only employs this strategy for self-preservation, not to discourage others from improving the state of the art in electric vehicle technology.
Can We Say Tesla Is An Ethical Company? Knowing all this
As we’ve already said, Tesla’s mission is focused on social responsibility, and the end goal is to make products that help society and the economy. While it did aim to address environmental issues, its primary focus was on mitigating them.
In the past years, Tesla has faced problems with its vehicles. In May 2016, a 40-year-old man died in a Florida accident involving a car running in its computer-aided mode (autopilot system). But the US National Highway Traffic Safety Administration (NHTSA) did a study on the car and found nothing wrong with it. Therefore, they didn’t have to recall any vehicles with this feature.
It is estimated that making Tesla cars at the ATVM-funded facility will save 5,870,000 gallons of gas and prevent 52,000 tons of carbon dioxide from being released into the air each year. This would suggest Tesla is an ethical company right.
In addition, due to their emphasis on developing environmentally friendly products, Tesla achieved the highest grade possible in the Carbon Management and Reporting category from Ethical Consumer.
However, it obtained the lowest rating for its environmental reporting because it failed to address essential topics such as harmful chemicals. Tesla has also received many fines for pollution, which is surprising for a company that makes electric cars.
According to a recent analysis by Arabesque (which is not available to the public), the automaker is among 15% of the world’s largest firms across 14 indexes that do not publish their total greenhouse gas emissions. Thus, why doesn’t Tesla reveal its carbon emissions if it’s so concerned with creating a sustainable future?
In 2021, it paid a $1 million fine for air quality violations at one of its assembly sites. The Bay Area Air Quality Management District cited Tesla for 33 violations, including exceeding its allowed emission limits and failing to perform necessary emissions testing.
Additionally, the company was penalized in 2018 at one of its factories making electric cars “for utilizing faulty burners at its assembly factory in Fremont that sprayed unsafe levels of nitrogen oxides into the air.” At the time, it paid out a total of around $139,000.
Employee safety is the first topic in the Tesla IMPACT report “People & Culture” section. The company cares so much about the safety and training of its workers that, even though there is a huge demand for its EVs, it sometimes stops production lines to hold training seminars.
However, over the years, Tesla has been the target of numerous lawsuits alleging workplace racism and discrimination.
A former Tesla elevator operator claimed that he was called the N-word and told to “go back to Africa” by coworkers, and the court compelled the corporation to pay him $15 million. After Tesla contested the federal jury’s decision, a judge reduced the employee’s original $137 million award to $15 million.
Tesla also resisted the 2020 COVID-19 pandemic despite its proactive past. Musk stated that COVID-19 was less severe than many imagined and kept his California facility running despite the shelter-in-place order from California authorities.
In addition, Tesla declared a 75% plant staff reduction after a COVID-19-positive employee.
Politics And Supply Chain Issues
Tesla is known to adhere to OECD guidelines and their “Guidelines on Responsible Sourcing from Conflict-Affected and High-Risk Areas. However, the company has faced situations involving unfair labour and discriminatory systems.
A 2019 The Guardian report claims that Tesla was a defendant in a legal action brought by a human rights organization on behalf of 14 parents and kids from the Democratic Republic of the Congo (DRC).
According to the story, the organization charged Apple, Google, Tesla, and other businesses with complicity in the deaths and injuries of children working in cobalt mines within their supply chains by anti-slavery economist Siddharth Kara.
US legislators criticized it in January 2022 for entering the Uyghur Region despite evidence that the Chinese government was operating mass detention facilities there.
Tesla has set the standard for its corporate social responsibility, but it is clear that the company doesn’t keep all of its promises to protect the environment and do other good things.
Without a doubt, Tesla paved the way for the electric vehicle movement and sustainable energy. Since its inception, the company has contributed to the worldwide proliferation of electric vehicles to more than 3 million.
Although the issue is that when many companies claim to be acting ethically, it is not always the case. Thus, the question of whether Tesla is ethical is left hanging as it must confront its moral transgressions head-on.
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