Environmental & Ethical issues Flashcards
(17 cards)
How Business activity can impact the environment in many different ways
including:
- Air pollution made by factories & transportation
- Water & land pollution from improper waste disposal
- Increase carbon emissions – global warming
Examples of
External Costs
costs paid by society, rather than the business (as a result of business
- Environment is harmed from waste products
- Pollution may damage the health of people
- Less energy
- Increased traffic
Examples of
External Benefits
gains to society, rather than the business (as a result of business deci
- Jobs are created,
- Other companies might move in, more services
- Better infrastructure
- Better living standards
Sustainable Development
Sustainable development is development that does not put at risk the living standards of future generations.
Examples of Sustainable development
- using renewable energy- so that resources are conserved for the future
- recycle waste
- use fewer resources
- develop new environment-friendly products and processes- reduce health and climatic problems for future generations
Pressure group
A group of people who want to change policies / decisions of businesses
They lead to consumer boycotts - consumers not buying their products
RESPONSE:
Lots of public support, Very bad brand image & reputation, Loss in sales
Laws passed by Government
Government making certain activities illegal (i.e. dumping waste)
RESPONSE:
It is more expensive to manufacture
Laws passed by Government
Government making certain activities illegal (i.e. dumping waste)
RESPONSE:
It is more expensive to manufacture
Fines
If a business produces more pollution than the government allows, they pay heavy fines.
RESPONSE:
Costs of business increase
Pollution permits
There can also be penalties set in place that will penalize firms that excessively pollute. Pollution permits are licenses to pollute up to a certain limit. These are very expensive to acquire, so firms will try to avoid buying the pollution permit and will have to reduce pollution levels to do so.
WHY BUSINESSES WANT TO BE ENVIRONMENT- FRIENDLY
Sense of social responsibility
Using up scarce non-renewable resources (such as rainforest wood and coal) will raise their prices in the future
Consumers are becoming socially-aware and are willing to buy only environment friendly products.
Governments, environmental organisations, could take action against the business
WHY BUSINESSES DO NOT WANT TO BE ENVIRONMENT-FRIENDLY
It is expensive to reduce and recycle waste for the business.- reducing profits.
Firms will have to increase prices to compensate for the expensive environment-friendly methods used in production- higher prices mean lower demand.
High prices can make firms less competitive in the market and they could lose sales
Ethics
– “doing the right thing” -
How businesses face many ethical decisions
Businesses may respond to ethical issues by following their moral code and “doing the right thing”
Unethical decisions
- Employing child workers, even though it might not be illegal in some countries
- Buying supplies that lead to damage of the environment
- Paying managers large bonuses while having their workers in minimum wage & poor conditions
- Offering bribes to people to gain information
Benefits of Ethical Decisions
Benefits
* Consumers appreciate the efforts made by the company and so they buy more from them
* Creates good publicity
* Less risk of lawsuits
Disadvantages of Ethical Decisions
Disadvantages
- Higher costs of production
- Higher prices – might lead to less demand
- In some places families depend on their children to earn money
