Topic Summaries

Environmental concerns in business activity

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GCSE > Business > AQA > GCSE Business Topic Summaries > Business objectives > Environmental concerns in business activity
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  • Businesses are under pressure to reduce their environmental impact.
  • Eco-friendly actions include things like using renewable energy in factories, reducing packaging or using recyclable materials, and offsetting carbon emissions by planting trees.
  • For example Patagonia spends more on sustainable materials, but gains loyal customers who value its ethics.
  • Trade-off between environment and profit:
    Environmental choice Impact on profit
    Environmentally friendly policies Build brand trust and attract eco-conscious consumers, but may be costly in the short-term
    Sustainable materials instead of cheaper conventional materials Sustainable materials are often more expensive initially, but reduce environmental harm, landfill waste, and carbon footprint
    Investing in renewable energy or energy-efficient equipment High upfront costs (e.g. solar panels, electric vehicles) but lower carbon emissions and utility bills, though the business may not see a return on investment for several years
  • Why businesses respond to environmental issues:
    • Improve brand reputation and appeal to ethical consumers.
    • Gain a competitive advantage in eco-friendly markets.
    • Comply with legal requirements or avoid penalties.
    • Meet the expectations of investors or partners who value sustainability.
    • For example, IKEA has invested in renewable energy and aims to become fully circular (zero waste) by 2030.
  • How business activity can harm the environment:
    • Pollution (air, water, noise) from factories, vehicles, and waste.
    • Overuse of non-renewable resources like oil and minerals.
    • Deforestation or destruction of wildlife habitats.
    • For example, fast fashion brands contribute to water pollution and landfill.
  • How businesses may respond to environmental issues:
    Response Explanation
    Energy efficiency Using LED lighting, solar panels, or better insulation
    Green supply chains Sourcing materials locally or from eco-certified suppliers
    Waste reduction Reusing packaging, recycling materials
    Product innovation Creating biodegradable or recyclable products

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