Environmental and ethical issues

• There is rarely a 'right or wrong' answer when answering questions about ethical issues
• You should try to weigh up the views of groups with different opinions considering different stakeholder groups is a useful way to structure this
• Your recommendations should focus on the impact of making a particular decision rather than whether it is right or wrong
• Business activity often has a range of impacts on the natural environment
• In many cases, businesses consider the pursuit of profit to be more important than protecting the environment
• Socially responsible businesses often choose to limit negative impacts and sometimes take steps to make a positive impact on the natural world
• Effects of business activity on the environment


  • Resource consumption
  • Pollution
  • Waste generation
• Resource consumption


  • Deforestation in South America by industries like logging, agriculture, and construction
• Pollution


  • Food and consumer goods manufacturers account for 60% of worldwide greenhouse gas emissions
  • Single-use plastics produce toxic chemicals and harm animals
• Waste generation


  • High technology industries exporting e-waste to China and Nigeria, processed in an unsafe manner
• Positive environmental change by businesses

  • Innovation and sustainable practices
  • Conservation efforts
  • Investment in eco-friendly technologies, renewable energy and environmentally conscious manufacturing processes
• Innovation and sustainable practices

  • Fashion brands using sustainable materials like bamboo and fibres from agriculture waste
  • Research into alternatives to polyurethane using nanotechnology and DNA sequencing
• Externalities


  External impact on a third party not involved in the business transaction between the buyer and the seller
• Private cost

  What the business, consumer or government actually pays to produce or consume a good/service
• External cost

  Damage not factored into the business transaction
• Social cost

  Includes both the private cost and the cost to society
• Private benefit

  What the consumer, producer or government actually gains from producing or consuming a good/service
• External benefit


  Benefit not factored into the business transaction
• Social benefit

  Includes both the private benefit and the external benefit to society
• Private costs and benefits of launching a new product

  • Private costs: market research, product development, promotion, distribution
  • Private benefits: revenue, market share, reputation, broader product range, lower risk
• External costs and benefits of launching a new product

  • External costs: increased waste, harmful product features
  • External benefits: greater customer choice, creation of a new industry
• If social benefits are greater than social costs the businesses plans are likely to be approved, if social costs are greater than social benefits the businesses plans are likely to be rejected
• Controls over business activity affecting the environment

  • Governments can change laws to make environmentally-damaging practices illegal
  • Impose fines on businesses that break environmental regulations and order them to clean up environmental damage
  • Impose limits on business activities that cause environmental damage through pollution permits
• Sustainable development

  Meets the needs of the present population without compromising the ability of future generations to achieve a comparable standard of living
• Aspects of sustainable development

  • Limiting the use of non-renewable resources and reducing harmful emissions
  • Protecting natural habitats and at-risk species
  • Using land and natural resources in an environmentally responsible way
• Governments often encourage business sustainability by providing information as well as grants or low-interest loans and sometimes legislate to enforce more responsible decision-making
• How businesses can contribute to sustainable development

  • Recycling
  • Limiting resource use
  • Use renewable energy sources
• Recycling


  • Re-use scarce resources and purchase recycled raw materials and components
  • Use recycling services
  • Encourage customers to return items for reuse or recycling
• Limiting resource use


  • Adopt lean production techniques to minimise resource use and wastage
  • Encourage customers to consume products responsibly
• Use renewable energy sources


  • Invest in renewable energy sources such as solar panels
  • Replace equipment with energy-efficient technology to minimise carbon footprint
• By contributing to sustainable development, businesses can benefit from an improved reputation, reduced costs, and increased sales
• Businesses can contribute to sustainable development in several ways
• How Businesses can contribute to Sustainable Development

  • Recycling
  • Limiting resource use
  • Use renewable energy sources
• Recycling


  • M&S's Buy Anywhere. Return Anywhere reusable packaging scheme
  • Coca-Cola aims to replace all water used in creating their drinks back to the environment
  • Unilever is using 100% renewable electricity across all its factories, offices, warehouses and distribution centres
• Innovation


  • IKEA's Take-Back programme allows customers to return furniture to be repurposed or recycled
• Pressure groups


  Organisations, or groups of people, that seek to influence the policies and actions of businesses or governments
• Pressure groups' primary objective

  To promote a specific cause or agenda
• Pressure groups


  • An animal rights group may want a clothing company to stop using animal products in their clothing
• Ways Consumers can Encourage Environmentally Sustainable Business Practices

  • Purchase eco-friendly products
  • Support sustainability campaigns
  • Use social media to congratulate sustainable businesses
  • Boycott businesses with poor environmental records
  • Communicate directly with businesses
  • Contact political representatives
• International environmental pressure groups

  • Greenpeace, Friends of the Earth, Earthwatch