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25. Envi & Ethical Issues

The document discusses the environmental and ethical issues businesses face, including pollution, waste management, and greenhouse gas emissions. It emphasizes the importance of sustainable development and the need for businesses to balance social costs and benefits while adhering to ethical standards. Additionally, it outlines the role of legal controls and pressure groups in influencing business practices towards more environmentally friendly and ethical operations.

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10 views14 pages

25. Envi & Ethical Issues

The document discusses the environmental and ethical issues businesses face, including pollution, waste management, and greenhouse gas emissions. It emphasizes the importance of sustainable development and the need for businesses to balance social costs and benefits while adhering to ethical standards. Additionally, it outlines the role of legal controls and pressure groups in influencing business practices towards more environmentally friendly and ethical operations.

Uploaded by

aaqibuddinmohammed
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Environmental & Ethical

Issues

External Influences on Business Activity

M Viqar Ahmed
Chapter Objectives

The impact of Business Activity on Business


External Cost & Benefits of Business
Decisions
Sustainable Development
Environmental Pressure and Opportunities
Ethical Issues faced by Businesses
Business activity has an impact on the physical, social and
economic environment in which it operates.
Businesses may cause Environmental & Ethical problems. If it
fails to recognise then may lead to bad reputation and loss of
sales. And vice versa ….
Environmental Issues

Pollution Waste Emission of Use of Energy Use of Natural


Greenhouse Resources
Gases
Pollution

Air
Noise
Pollution
Pollution
Land Visual
Pollution Pollution

Thermal Water
Pollution Pollution

Light
Pollution

Governments’Action: To reduce/control pollution, they charge levy on release of


pollution or introduce laws to ban release of dangerous chemicals.
Along with Governments, it should be a combined effort of Scientist, individuals
and businesses.
Waste

Commercial Packaging Paper


Waste Waste Waste
IT Waste Chemical &
Hazardous
Waste

To reduce waste, Governments introduced 3Rs


So Businesses are trying to be more environmental friendly

For example – Recycling Paper


Use of paper shopping bags (which can be
recycled), instead of Polythene
Emission of Greenhouse Gases
When factories burns fossil fuels (non renewable energy, such as
coal & oil)
And usage of Heaters & ACs
they emits Greenhouse gases
Such as
•Carbon dioxide
•Methane
It increases the amount of Greenhouse gases in atmosphere
Which leads to Global Warming
Use of Energy
Lights, Office equipment, ACs, uses a large amount of natural resource, such as
Coal/ Oil/ Gas /Water/ Electricity
That cant be renewed
Use of Natural Resources
Businesses use natural resources as raw material Such as wood, which lead to
•Deforestation (also leads to Global Warming)
•Destroys animal habitat
Solution
•Turnoff Lights/ACs when not in use
•Develop Renewable Sources of Energy, such as
Wind and Solar power
Externalities: Effect of Business Activity on Unrelated Parties
Businesses create positive and negative impact on unrelated parties

Negative Externalities are known as Social Cost, Such as


Traffic congestion, Noise/Air pollution and etc
Positive Externalities are known as Social Benefits, Such
as Employment/Education/Healthcare

Cost-Benefit Analysis
Businesses need to workout on cost & benefits
and make sure that Social benefits should
outweigh the Social Cost
Ethical Issues
Businesses should behave responsibly while carrying out their activities, also known as
business ethics.
Its always not enforced by law but business ethics have a vital role to play in decision making.
Ethical Issues

Finance
•Extra /Add-on
Operations
cost Human
•Improper waste
•Insider trading Marketing Resources disposal
•False Ad •Unfair Wages •Exceeding pollution
•Unsafe products •Child Labour limits
•Non-disclosure •Discrimination •Selling at low cost to
of risk •Health & Safety drive out competition
Standards
Pressure Groups
It’s a group of people who join together for a common cause (ethical
or environmental).
It aims to change the way businesses functions.
It does this by trying to influence government policy.

Pressure groups use the following methods to achieve their aim


Demonstrations – Rally, Protest
Boycotting – Refuse to buy
Petitioning – Official complaint
Lobbying – Influence policy making body
Increasing awareness of the issue – Media
Business Response to Environmental Pressure
Use Green manufacturing methods
Reduce use of Energy
Obey Government regulations
Follow sustainable practices
Take legal action against pressure groups – if they are wrong
Defend business decision to improve image
Why to respond
Business reputation gets damage
Business may close down
May create legal problems
Opportunities
*May lead to cost saving *Financial Incentives
*Employee Motivation *Attract new customer
*Competitive Advantage
Legal Controls
The Role of Legal Control
Government use legal controls to limit/restrict the negative effects. Such as
Impose Penalties – Fines, Business Closure, Imprisonment
Charge Levy/Tax – On commercial use of energy
Set Standards – Certain percentage of using natural resources from
renewable sources
Permit – Some businesses are not allowed to setup in some areas
Incentives
•Tax Credit Green companies will be rewarded with tax credit (Lesser tax),
which increase business’s profit
•Tax Exemptions for using renewable sources energy
Sustainable Development
Business will be considered as sustainable if it contributes towards the economic
growth while obeying the law and being ethical and environmental friendly.

•Use renewable sources and energy


•Avoid unnecessary travel – Promote work from home policy
•Avoid or reduce the use chemicals that emits toxic waste
•Use packaging that can be recycled
•Use energy efficient equipment to minimise the energy levels
•Reduce waste
•Work fairly
Thank You
Jazakallah Khair

Any Questions?

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