Environmental Considerations (AQA GCSE Business)

Environmental Responsibility

• Businesses can have a range of negative impacts on the environment

Diagram: Business Impacts on the Environment

Negative business impacts on the environment include noise, air, visual and water pollution, traffic congestion and dereliction

• Pollution can be caused by industrial processes that release harmful gases into the air or harmful substances into the ground, which can run off into water courses

• Land and buildings can be rendered unusable when businesses process dirty or toxic materials, leading to dereliction

• Traffic congestion can be caused by vehicles delivering materials to and from businesses, as well as by commuting employees

• Visual pollution is caused by unattractive buildings or business works that worsen inhabitants' views of their surroundings

• Consumer attitudes towards environmental responsibility have changed significantly in recent years

  • 80% of UK consumers expect companies to be environmentally conscious, and around 70% of consumers take steps to minimise their carbon footprint (Source: PwC Global Insights Pulse, 2021) by making more responsible buying choices

• Businesses are responding to consumer attitudes by taking steps to reduce their environmental impact

Ways Businesses Reduce their Environmental Impact

• Many governments are taking steps to encourage businesses to reduce their environmental impact

  • Strict laws regulations dictate the way businesses dispose of manufacturing waste to avoid pollution

    • Higher charges for disposal, as well as limits on the volume of permitted waste, increase business costs

    • Fines for businesses that break environmental regulations and order them to clean up environmental damage

    • Banning of hazardous materials in manufacturing processes means alternatives must be sourced or developed

  • Some governments are focused on the switch from fossil fuels to green energy production, such as solar and wind power

    • In the long term, this should mean that businesses are likely to enjoy lower and more consistent energy costs

  • Many governments have introduced curbs on business activities that cause environmental damage

    • E.g. Pollution permits allow businesses to pollute up to a certain limit

The Costs & Benefits of Environmental Responsibility

• There are some significant costs associated with operating in an environmentally responsible way, such as the cost of replacing equipment and implementing greener ways of working

• However, businesses that are environmentally responsible often benefit from long-term cost savings, reduce their level of risk, achieve a competitive advantage and gain an improved reputation

Evaluation of Environmental Responsibility in Businesses