Environmental and ethical issues

How business activity can impact on the environment Negative impact

Positive impact

Pollution Air pollution Land pollution Thermal pollution Light pollution Water pollution Visual pollution Noise pollution

Waste Types of waste

Commercial waste IT waste Packaging waste Chemical and hazardous waste Paper waste

Emission of greenhouse gases Carbon dioxide, methane

Fossil fuels such as coal and oil

Heating and air conditioning systems release greenhouse gases from offices and factories into the atmosphere which lead to global warming.

Use of energy Office equipment

Lighting

Heating and air conditioning

Coal, gas and oil are natural resources

Reduce the amount of energy they use.

Renewable sources of energy such as wind and solar power.

These do not produce greenhouse gases and can easily be replaced.

Use of natural Non-renewable raw materials

Overfishing and deforestation

Externalities Some business activities are more

environmentally friendly than others.

Externality: The effect of business activities on unrelated parties.

Social cost: The negative impact of a business decision on society.

Social benefit The positive impact of a business

decision on society.

External costs and external benefits of business decisions Cost-benefit analysis: Analysis of the

costs and benefits of a project, the focus being on the social costs and benefits.

Positives or benefits- Negatives or costs

Sustainable development Use renewable sources of energy

Avoid unnecessary travel by promoting a work from home policy (telecommuting)

Avoid or reduce the use of chemicals that produce toxic waste.

Sustainable development Use packaging that is made of recycled

material.

Use packaging that can be recycled or reused.

Use energy efficient processes and equipment to minimise the use of enery.

Sustainable development Reduce waste or find a market where it

can be used as a raw material.

Work with employees, customers and suppliers fairly.

Sustainable development: A business activity is said to be sustainable

Sustainable development: A business activity is said to be sustainable if it has a positive overall impact on the environment and its stakeholders, ensuring its survival in the future.

Environmental-

Social-

Economic-

Environmental pressures and opportunities Businesses have to respond to the

threat they face from environmental pressures.

Pressure group Demonstrations-

Boycotting

Petitioning

Lobbying

Increasing awareness of the issue

How businesses respond to environmental pressures Using green manufacturing methods, which

produce less waste and pollution.

Reducing their use of energy

Obeying government regulations and standards.

Following sustainable business practices

Legal pressure

Defending business decisions in order to improve their image, which may have been damaged by pressure groups.

Why businesses respond to environmental pressures If a business fails to respond to

environmental pressures

The business’s reputation may be damaged. It may lose customers, employees and investors.

Why businesses respond to environmental pressures The business may be closed down if

government regulations to uses greener methods of production are not followed.

Inability to meet government regulations may create legal problems for businesses.

Pressure groups may opposes the business, produce negative publicity and prevent a company’s growth.

Opportunities presented by environmental pressures Recycling

Governments

Publicity

Telecommuting

Opportunities presented by environmental pressures The green revolution

Following government regulations and standards can give a firm a competitive advantage over other businesses.