Environmental Considerations (OCR GCSE Business)

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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 become 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

Sustainability is the production of goods and services without compromising the ability of future generations to use natural resources to meet their needs

Examples of Sustainable Business Practices

Business Practice	Example
Using renewable energy sources	Apple's main California campus is powered entirely by renewable energy from its onsite solar installation
Reducing energy use	Sainsburys uses low-energy LED lighting across all of its stores, reducing energy consumption by almost 60 per cent
Recycling	Reusable water bottle brand Chilly's accepts its products for recycling at the end of their life
Reducing water use	Levi's' Water<Less program means that its products are manufactured using significantly less water, saving over 5 billion litres of water since 2011
Reducing waste	Microsoft has installed recycling facilities that reuse and repurpose old servers and hardware for its data centres, removing around 90% of its waste from landfill
Avoiding or reducing the use of non-renewable resources	Aldi has reduced its single-use plastic consumption by removing all plastic shrink wrap from tinned products, saving 78 tonnes of single-use plastic from going to landfills each year
Encouraging staff to car-share, use public transport or cycle to work	Great Ormond Street Hospital has hundreds of bicycle parking spaces at its site in central London and provides free bicycle maintenance to its staff

Climate change is the long-term shift in global temperatures and weather patterns, caused in part by human behaviour
- Temperature and sea levels are rising
- Rainfall is increasing
- Weather systems have become less predictable
Businesses are likely to face significant negative impacts as a result of climate change:
- Energy supplies and logistics may be disrupted due to unprecedented weather events, such as floods, hurricanes, typhoons or excessive temperatures
- Food producers may face supply shortages as farming yields fall and land becomes unfit for use
- Increased disease or illness related to climate change may create labour shortages
Climate change may, however, create business opportunities
- Changes in weather patterns may make previously unattractive areas suitable for tourism
- Demand for insurance to protect against the impact of climate change is likely to increase
- Construction companies involved in civil engineering projects, such as the building of dams or flood protection, are likely to receive more contracts

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

An Evaluation of Environmental Responsibility in Businesses

Costs	Benefits
Meeting environmental regulations can involve costs for changing processes, obtaining permits and installing pollution control equipment	The efficient use of resources such as energy, water and raw materials, and reducing waste, can lead to long-term cost savings
Purchasing environmentally friendly machinery or greener materials often requires significant capital investment	Responsible businesses avoid fines, legal action and reputational damage from environmental incidents
Running operations in an environmentally friendly way (e.g. using renewable energy, recycling and proper waste disposal) can increase day-to-day expenses	Consumers increasingly prefer environmentally responsible companies, which can boost sales and customer loyalty Green companies can access growing markets for eco-friendly products
Businesses must commit time to carrying out environmental audits, and need to produce reports on their environmental progress	Green practices can improve employee morale, recruitment and retention, as staff are often proud to work for environmentally responsible businesses

In the exam, make sure you consider the impact of business decisions related to environmental responsibility on a range of stakeholders.

For example, shareholders may be concerned about increased costs, while employees may worry about change and job security.

the (exam) results speak for themselves:

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