6.3. Business and the environment
- Syllabus
- 0264–2027–2028
- Topic
- 6.3
- Level
- —
Learning objectives
Responding to environmental impact
Business activity can impose environmental costs through air, water or noise pollution; greenhouse-gas emissions; waste and traffic; loss of green space or habitat; and depletion of finite natural resources. A useful response targets the cause rather than only promoting a greener image.
| Source of impact | Possible business response | How the response helps |
|---|---|---|
| energy and production | use renewable energy or efficient machinery; reduce material use and production waste | lowers emissions, energy use and resource depletion |
| product and packaging | redesign products; use recycled or reusable packaging; ask customers to reuse containers | reduces raw-material use and disposal waste |
| transport and supply | reduce journeys, alter delivery methods or choose nearer suppliers | lowers congestion, fuel use and emissions |
| disposal | recycle materials and change how waste is stored or treated | reduces pollution of land and water |
Businesses may respond voluntarily to protect reputation, maintain or increase sales, avoid customer boycotts or pressure-group action, differentiate from competitors, attract employees or investors, and prepare for legal standards. These gains are possible, not automatic: customers must value the change and the claim must match the action.
| Legal control can change... | Example effect on the business |
|---|---|
| how it produces | new machinery, cleaner energy, staff training, lower output or different waste treatment |
| what it produces or sells | restricted materials, redesigned products or packaging, a smaller product range |
| where it produces or sells | a site may be prohibited, relocated or required to meet location and disposal rules |
| its costs | equipment, training, alternative suppliers, permits, taxes or fines raise cash outflow; efficiency may lower some costs later |
Environmental action can raise short-term costs even when it reduces harm or improves reputation. Legal controls cannot simply be ignored, but their effect varies with the rule, the firm's existing equipment, its location and whether customers reward the change with higher demand.