6.2 Environmental and Ethical Issues Flashcards
Does business activity impact the environment?
Yes, like all human activity, business activity has a huge impact on the environment.
How does business activity negatively impact the environment?
Pollution - factories and products can call pollute the air and water
Business activity contributes to deforestation and the destruction of natural habitats, by using such resources for producing goods.
Several business burn fossil fuels, contributing to climate change/global warming.
Give an example of a business that negatively impacts the environment.
Coca-Cola has been widely criticised for using up water used by local communities in India to manufacture their soft drinks.
Furthermore, it relies heavily on fossil fuels to power its factories and deliver its products, which contributes to climate change.
Define externalities.
Externalites are a way of looking at the wider impact of a business’ decisions
Define external costs.
The costs of business activity, which aren’t paid by the business but by society.
Give an example of an external cost.
Millions of empty plastic bottles are thrown away which don’t decompose for thousands of years and can’t be effectively recycled. The impact of this business activity is passed on to the rest of society
Define external benefits.
Positive externalities, where the environment or society benefits from business activity.
Give examples of external benefits.
if Coca-Cola decides to build a new factory in India, Coca Cola will benefit by gaining access to the Indian market and a low cost, highly skilled labour force.
The local community and society will also benefit through higher employment and more money entering the local economy.
Define sustainable development.
achieving growth without negatively impacting the environment.
Give an example of sustainable development.
Hewlett Packard, the computer manufacturer, ranks as one of the most sustainable companies in the world. Not only through innovative programs like using disused plastic bottles to make ink cartridges, but in addition to its own practices, the company holds its suppliers, distributors and resellers to high environmental standards. This gives it a competitive advantage when attracting environmentally conscious consumers.
Explain the role of legal controls over business activity affecting the environment.
Not all companies will take the initiative and become more sustainable. For some companies like coal mining businesses it can be virtually impossible to change their whole business model to one that is environmentally friendly. That is why the government passes laws, to force businesses to lower the impact of their activity on the environment
What laws can governments pass to force businesses to lower the impact of their activity on the environment?
The government can ban single use plastics, or put an additional charge on items which are harmful to the environment such as plastic bottles, plastic bags or a carbon tax for high polluting businesses.
Define Ethics.
Ethics is doing the right thing, basing business decisions on what is morally right, rather than if it is legal or more profitable.
List some ethical issues.
Environmental issues
how employees, consumers, suppliers and the wider society are impacted by business activity
Child labour
What happens if a business makes unethical decisions?
Unethical decisions by business can result in negative publicity
