Ethics, the Environment & Business (Edexcel GCSE Business)

Ethical & Environmental Impacts on Businesses

• Ethical and environmental considerations have become increasingly important to businesses as consumer concerns have the potential to quickly damage a business or brand reputation

  • Ethical and sustainable practices can prove costly

  • They are essential as many business stakeholders demand greater accountability and transparency

• Some companies have been able to use their ethical and environmental practices to add value to their brands and this has increased their profitability

Ethical Considerations and Business Activity

• Ethical considerations can have a significant impact on business activity

• Companies need to balance their ethical responsibilities with the need to generate profit

  • E.g. Companies like H&M have faced criticism for using sweatshops and exploiting workers in developing countries

    • In response they have implemented a code of conduct for its suppliers and have started using sustainable materials

    • Implementing these ethical practices has come at a cost which has impacted the company's profit margin

Environmental Considerations and Business Activity

• Balancing their environmental responsibilities with the need to generate profit is also a priority for many businesses

  • E.g.Companies like McDonald's have faced criticism for contributing to deforestation in order to produce palm oil

    • In response, McDonald's has committed to sourcing sustainable palm oil but this has come at a higher cost than sourcing non-sustainable palm oil which has negatively impacted the company's profit margin

Pressure Group Activity and the Marketing Mix

• Pressure groups are organisations that seek to influence public policy or business practices

  • They use a variety of tactics to achieve their goals

  • E.g. Greenpeace is a pressure group that campaigns for environmental issues and it has targeted companies like Nestle for using unsustainable palm oil

    • In response, Nestle has committed to sourcing sustainable palm oil but this has impacted the company's marketing mix

    • Nestle has had to change its packaging and labelling to reflect its commitment to sustainability and it has had to spend money on advertising campaigns to communicate this message to customers