3.5.2 E NVIRONMENT I SSUES E NVIRONMENTAL ISSUES Is your classroom green? Is your school green? Think about your school on a day to day basis. Does it behave in an environmentally friendly way? List the good and bad environmental practises? Good?Bad? Could it do better? Could you contribute towards a better environment?

C HANGES IN THE E NVIRONMENT E NVIRONMENT I SSUES The environment encompasses the surroundings in which we live. Firms will have to operate within and take account of environmental issues. This will include how they impact on:  The natural environment – the natural resources that firms exploit to produce goods and services  The built environment – the man-made surroundings that provide the setting for the production of goods and services The World’s resources are running out What natural resources do firms use? Do firms have a duty to limit their use of natural resources? Is it the Governments responsibility to intervene and protect these natural resources?

S HORT TERM CHANGES IN THE ENVIRONMENT E NVIRONMENT I SSUES Traffic congestion causes problems for both customers and staff, which may mean lost sales and late employees There are a number of short-term environmental effects that impact on society Businesses that cause air pollution face heavy fines and a bad reputation. They will look to use greener production methods Businesses that cause water pollution e.g. in rivers and the sea are subject to heavy fines and bad publicity so will try to use environmentally friendly processes. Recycling means that businesses will try to reuse materials rather than dispose of them. This can reduce costs and be used to promote the business.

L ONG TERM CHANGES IN THE ENVIRONMENT E NVIRONMENT I SSUES Global warming is a rise in the Earth’s temperature. It is caused by greenhouse gases produced by human activities. These include deforestation and the use of fossil fuels. In 80 years time the world is expected to be 6 degrees warmer than it is now. Business will be affected through legislation and opportunities for new products. There are also long-term environmental effects that impact on society Resource depletion is caused as we use up non renewable resources such as petrol and coal. With decreasing supply and increasing demand, as the world gets richer, prices have risen dramatically. Greater emphasis has been placed on using renewable resources such as solar power and wind energy.

E NVIRONMENTAL F ACTORS Business activity impacts on the environment in a number of areas causing pollution and waste as well as providing society with its needs. A number of issues have arisen which affect the way businesses operate in today’s society:  Renewable clean energy sources – wind, solar and hydro power  Waste management – recycling and composting rather than landfill  Eco-friendly products – green cleaning such as soap powders  Organic produce – foods produced using natural pest control As society becomes increasingly concerned about environmental issues this can create both opportunities and threats to businesses. Can you identify one opportunity and one threat? E NVIRONMENT I SSUES

E NVIRONMENTAL F ACTORS Green working practices  Reduce carbon footprint  Recyclable packaging  Wrapping on products  Use of carrier bags  Saving energy  Car pools or cycle schemes Green consumerism  Buying eco friendly  Supporting local suppliers – food miles  Solar or wind power  Hybrid cars Can environmental issues create opportunities for businesses as well as threats? Can you name any new products that have been designed to exploit environmental concerns? E NVIRONMENT I SSUES

Q UESTION TIME E NVIRONMENT I SSUES Marks and Spencer believe in “doing the right thing”. Some of the steps taken include charging 5p for plastic carrier bags, launching a range of carbon neutral chocolate and reducing the use of glass in packaging. The website states that “through Plan A we are working with our customers and our suppliers to combat climate change, reduce waste, use sustainable raw materials, trade ethically, and help our customers to lead healthier lifestyles.” 1.M&S has clearly taken steps to reduce the effect of its business activities on the environment. Explain one way in which it has achieved this.(3 marks) 2.Assess two potential benefits to M&S of “doing the right thing”.(8 marks) 3.Is it businesses responsibility to help customers lead a healthier life style? Justify your view.(6 marks)