Environmental and Ethical Issues

Environmental Factors Influencing Business Activity

- Business Sustainability: Business activities have profound impacts on the environment. A forward-thinking business needs to minimise their negative environmental impacts. This means reducing waste, making use of renewable resources, scrutinising supply chains for sustainability, and generally adopting a “green” business model.

- Environmental Legislation: Local and international laws regulate many aspects of a business’s environmental footprint. These can include waste disposal, carbon emissions, and more. Non-compliance can lead to significant fines and reputational damage.

- Climate Change: Global warming could affect business operations and costs, particularly for businesses reliant on consistent weather patterns or those in sectors likely to be heavily regulated due to their environmental impact.

- Renewable Energy Use: The increasing shift towards renewable energy can both impact the costs and operations of a business. It might lead to increased initial investment but can lower long term costs and impacts.

Ethical Factors Influencing Business Activity

- Fair Treatment of Employees: Ensuring employees are well treated, paid fairly, and work under good work conditions. These factors can impact the reputation of a business and its ability to attract and retain good employees.

- Corporate Social Responsibility (CSR): The actions of a company to ‘give back’ to society. This could take the form of initiatives to improve community amenities or contribute to non-profit organisations. These actions can significantly benefit a company’s reputation and consumer perception.

- Ethical Sourcing: Whether raw materials have been sourced ethically (without exploitation or harm) can influence its reputation and potential backlash from socially-conscious consumers. It needs to ensure fair practice throughout their supply chain, from manufacturers to end consumers.

- Transparent Corporate Governance: Transparency in a company’s accounting, auditing, and other operations can avoid unethical or illegal activities within the business. Transparent operational activities can improve investor, employee, and public trust in the business.

- Ethical Marketing: Avoiding deceptive or manipulative advertising. Ethical marketing respects the rights of consumers, and socially-responsible advertising can enhance the reputation and consumer relations of the organisation.

Remember, a proactive approach to environmental and ethical issues can not only pre-empt potential legal problems or public relations controversies but may also produce advantages such as improved brand reputation, cost savings, and increased customer engagement.