CAIE A-Level Business A2 6.1.7 Environmental Questions

Evaluate the impact on OV of the growing importance of sustainability.

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Indicative content

Responses may include:

AO1 Knowledge and understanding

Limited knowledge ${ }^{\mathrm{K}}$ will be demonstrated through knowledge of sustainability or knowledge of how the increasing importance of sustainability affects OV.

Developed knowledge K+K will be demonstrated through knowledge of sustainability and knowledge of how the increasing importance of sustainability affects OV.

Knowledge of sustainability

- Sustainability refers to activities that meet the needs of the present without compromising the ability of future generations to meet their needs.

- Link to corporate social responsibility.

Impact on OV

- Need to consider environmental impact when making decisions to demonstrate commitment to sustainability.

- Increased costs.

- Enhance brand image.

- Support increase in price.

- Sourcing of supplies.

AO2 Application

Limited application, ${ }^{\mathrm{APP}}$ applies knowledge to OV once.

Developed application, ${ }^{\text {APP }}+{ }^{\text {APP }}$ applies knowledge to OV twice.

- Mission statement commitment.

- Organic nature of the product - more environmentally sustainable.

- Negative publicity regarding Greek yogurts regarding damage to environment: acid whey, water usage, sale of acid whey to farmers.

- Sustainability of distribution direct to consumer.

- Link to CSR - OV gives 5% of its profits to educational projects in low-income countries.

- Increasingly competitive market.

- Reference to development of plant-based yogurts.

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AO3 Analysis

Limited analysis $\mathrm{AN}^{\mathrm{AN}}$ - candidate shows one link in the chain of analysis.

Developed analysis L2AN - candidate shows two or more links in the chain of analysis.

- Using local suppliers of milk to reduce the carbon footprint of transport.

- Will affect all strategic decisions as OV will need to consider the environmental impact. For example, the decision to open a new factory. OV may need to use materials that reduce environmental impact and ensure energy efficiency.

AN This will impact costs.

L2AN

- Need to conduct environmental audits to measure impact of OV and provide evidence of commitment to sustainability. AN Otherwise, the business may be open to criticism of greenwashing.

- Need to reduce carbon footprint will mean that OV has to change distribution channels of individual deliveries to consumers.

- Can OV continue to sell acid whey to farmers? Cost of not doing so. Stockpiling of acid whey will increase costs. AN

- R & D into alternative uses of acid whey will lead to an increases in costs. AN

- Benefits of sustainability in terms of promoting brand image AN and increasing sales as a result. L2AN

- How sustainability can give OV a USP and ability to take more control over pricing ${ }^{\mathrm{AN}}$ and therefore increase profits. L2AN

- Cost of sustainability - ingredient costs. Increased costs will reduce profit margins ${ }^{\mathrm{AN}}$ and could therefore reduce profit. L2 AN

- Danger of claiming a sustainable approach if it is not followed. This could lead to backlash and loss of image ANl and therefore sales. L2AN

AO4 Evaluation

Limited evaluation ${ }^{\text {гval }}$ - limited supported judgement and/or a weak attempt at evaluative comment.

Developed evaluation ${ }^{\text {L2 }}$ - supported judgement and/or reasonable evaluative comment.

Developed evaluation in context ${ }^{\left\lfloor 3 \text { rat }^{\text {vat }}\right\rfloor}$ - supported judgement in context and/or reasonable evaluative comment in context.

- Judgement on the balance between costs and benefits of sustainability to OV.

- Significance may depend on competitor behaviour. Can OV afford not to take sustainability seriously?

- Given the OV's mission statement there is a need for OV to address the issues highlighted by the newspaper report.

- Risk of future legal changes to protect the environment so might be important to make product/production changes before these are proposed or introduced.

Accept all valid responses.