Ethical and environmental considerations

Businesses are increasingly judged on the contribution they make to society. Behaving ethically,
without harming the environment, is an important part of this corporate social responsibility.

Ethics are about having

This means that an ethical business will act in a socially responsible way, doing what is right
even if it is not required to do so by legislation, and regardless of the impact it might have on
profits.

Most business activity involves workers, suppliers and customers. The way that a business
treats these three groups of stakeholders is a good sign of how ethical it is.

Treating workers ethically

Examples include:

●
●
● allowing flexible working

Treating suppliers ethically

Examples include:

●
● having reasonable expectations
●
Treating customers ethically

Examples include:

● Exceeding expectations through putting customers at the heart of everything. This can
include offering excellent customer service, quality products or services and making
the customer feel valued and appreciated.
● Only providing what customers need – this means ensuring that the business thinks
about the needs of the customer and meets these rather than selling a business extra
products or services to meet their own profit targets. For example, not selling a
customer a mobile phone contract that they will not use.
● Giving clear and accurate product and service information to allow customers to make
informed decisions.

Reasons to be ethical

Businesses that behave in an unethical way are more likely to receive bad publicity and get a
poor reputation. For example, retailers that buy from suppliers that use child labour to produce
goods may be targeted by negative articles in the media.

Businesses that behave ethically can benefit from good publicity, which is likely to attract
customers and increase sales. For example, businesses that have signed up to the Ethical
Trading Initiative can show that they have taken steps to address the use of child labour in the
production of the goods they sell.

Ethics vs profit

Being ethical will often result in a business incurring higher costs. This is because ethically
sourced supplies are often more expensive to buy. Some businesses argue that this would
make them less competitive, leading to lower sales and reduced
However, other businesses believe that there does not have to be a between ethics
and profit. These businesses believe that the benefits of doing the right thing far outweigh the
costs. These benefits include:

● , who work more efficiently

● customers who want to support businesses that behave in a socially responsible way
● who want to be associated with businesses that are ethical

All of these benefits can help to establish a reputation, which can increase sales,
actually leading to higher profits.

How environmental considerations

influence business activity
Any business activity will have an impact upon the environment, either through the natural
resources that it uses or the waste products that it produces.

A business can carry out a in order to measure the environmental impact of its
activities. For example, this may involve measuring its . The four main
environmental issues that are most likely to influence the activities of a business are climate
change, pollution, sustainability and waste reduction.

Climate change

Climate change refers to

Scientists believe that business activity contributes to this global warming through the burning
of fossil fuels and the cutting down of trees.
Pollution

Pollution commonly refers to the or water with harmful chemicals. Air

pollution can cause a number of health-related issues, and animals and plants that live in seas
and rivers are affected by water pollution. Business activity may also cause disturbance through
noise pollution.

Sustainability

Working in a sustainable way means that business activity

To achieve this, a business may use recycle materials such as paper and ink
cartridges, or use devices that save energy and water.

Waste reduction

Traditionally, waste has either been incinerated or sent to landfill sites. However, these are not
environmentally friendly ways of dealing with waste.

Instead, businesses can reduce the amount of waste that they produce, which reduces costs
and means that there is less waste to dispose of. Many businesses also look for ways in which
waste materials can be reused.

The advantages of being environmentally friendly

Being environmentally friendly can bring a number of benefits. For example:

● and grants – The government offers money to businesses willing to

invest in environmentally friendly production methods. This can help to reduce costs.
 ● – Changes to business activities that lower a business’ impact on the
environment can often also lower the business’ costs. For example, retailer Marks and
Spencer has introduced driver performance software in its delivery vehicles that has
reduced the consumption of fuel by 2.3 litres per hour.
● – Concerned customers who are very aware of environmental issues
are more likely to buy from businesses that act in an environmentally friendly way.

The disadvantages of being environmentally friendly

For a business, there may also be disadvantages to being environmentally friendly. For
example:

● – Producing goods in an environmentally friendly way can often

mean spending more money initially, as it can require research and investment in new
production methods.
● – Becoming environmentally friendly can take up a lot of time,
particularly in large businesses.
● Potential for inaccurate claims – A business that wants to use claims about its
environmental efforts must make sure those claims are accurate. Inaccurate claims
can cause significant damage to the reputation of a business.

The potential impact of pressure group

activity on the marketing mix
Pressure groups, also called interest groups, are groups of people

the decisions made by businesses, organisations or governments.

Many pressure groups try to influence businesses to behave more ethically or to act in a more
environmentally friendly way. They can do this in a number of ways:
 ● lobbying
● organising a boycott of a business or a particular product
● viral marketing

The actions of these pressure groups can influence all four aspects of the marketing mix of a
business. For example:

● product - change the product, eg using rubber from ethical suppliers to protect the
Amazon rainforest
● price - change pricing strategies, eg to make ethical products a realistic choice for
consumers
● place - change distribution methods, eg using delivery vehicles that pollute less
● promotion - change the way a product is advertised, eg promoting
environmentally-friendly products