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25 Environmental and
ethical issues
Introduction
Objectives
Business activity has an impact on the physical, social and economic environment
In this chapter you will
in which it operates. This chapter looks at the positive and negative impact
learn about:
businesses have on the environment and society around them. It also looks at
■ the impact of business activity the role of pressure groups and government controls on business activity. Many
on the environment ethical issues have to be considered in business decision-making. In dealing with
environmental and ethical concerns, businesses face many threats as well as
■ the external costs and benefits
opportunities.
of business decisions
■ sustainable development
■ environmental pressures and Environmental concerns and ethical issues
opportunities
■ ethical issues faced by Many businesses are increasingly aware of the need to deal with the environmental
businesses. impact and ethical issues related to their activities. Failure to recognise this
may lead to bad publicity and loss of sales for a business. Equally, a business
that is environmentally friendly and ethical can lead to a positive image and an
opportunity to increase sales. Businesses try to work in such a way that their
environmental impact is minimal and their operations are ethical.
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How business activity can impact on the environment
Every business activity, whether it is from the primary, secondary or tertiary
sector, has an impact on the environment. The impact can be positive or
negative. For example, a mining company (primary) may use up the natural
resources of a country, create pollution and damage the environment of an area.
Table 25.1 analyses how the tourism industry (tertiary) can have an impact on
the environment.
Negative impact Positive impact
Primary, secondary, tertiary
industry: see Chapter 2, Overuse of a country’s natural resources Spreads awareness and helps in the
page 20. like water (used in swimming pools, conservation of wildlife and natural
hotels and golf courses). resources.
Increased pollution through littering, Employment generated through tourism
noise and air pollution. may help in reducing other activities
such as overfishing that are bad for the
environment.
Construction of buildings can lead to soil Additional work for local construction
erosion and loss of habitat for animals. businesses.
Table 25.1 Impact of the tourism industry on the environment
Business activity can affect us and our environment through:
■ pollution
■ waste
