Good morning everyone. Today we’re going to talk about environmental influences on business activity. This topic is becoming more important every year as climate change, pollution, and sustainability affect how businesses operate. Customers, governments, and investors all expect companies to take responsibility for their impact on the environment. So, businesses today cannot ignore environmental issues if they want to survive and grow.
Let’s start with how businesses interact with the physical environment. Every business uses natural resources like water, oil, or metals. They also produce waste and release emissions into the air. In the past, many companies focused only on profit, but now they have to think about how their activities affect the planet. Governments around the world have introduced environmental laws that make companies reduce pollution, manage waste properly, and use cleaner production methods. For example, a factory might be required to install special filters or machines to reduce air pollution before releasing gases into the atmosphere.
Consumers are also playing a big role. Many people today prefer eco-friendly products. You may have noticed supermarkets offering paper or biodegradable bags instead of plastic ones. This happens because customers want to shop with businesses that care about the environment. Businesses know that if they ignore this demand, they could lose customers to more responsible competitors.
Of course, becoming environmentally friendly can increase costs in the short term. Switching to sustainable materials or recycling systems can be expensive. But over time, it can actually save money because it reduces waste and improves efficiency. It can also improve a company’s image. For example, Tesla has built a strong reputation by producing electric cars that help reduce carbon emissions. Customers see Tesla as a company that stands for a greener future, which gives it a strong competitive advantage.
Another important idea is the environmental audit. This is a type of check-up businesses do to measure their impact on the environment. It looks at things like how much energy and water the company uses, how much waste it produces, and how it disposes of it. The results of these audits are useful for many groups. Managers use them to find ways to reduce waste and costs. Investors use them to decide if the company is responsible and sustainable in the long term. Consumers may also look at these reports to see if the company’s values match their own. Governments use audits to make sure the company follows the law. And pressure groups use them to hold companies accountable. For example, Marks and Spencer often publishes its environmental audits in its sustainability reports to show progress in cutting carbon emissions and reducing plastic use.
Now let’s talk about sustainability, which means meeting today’s needs without harming the ability of future generations to meet theirs. Sustainability has become a central part of business strategy. Companies are changing how they design products, where they get materials from, and how they transport goods. For instance, IKEA sources its wood only from certified sustainable forests and aims to become climate positive by 2030.
Sustainability also encourages innovation. Many companies are developing new, greener technologies. Coca-Cola, for example, is working on plant-based bottles that are easier to recycle. Banks and investors also care about sustainability. They often offer better loan terms to projects that are environmentally friendly, like building energy-efficient offices.
Sustainable practices also reduce risks. Environmental problems like floods, droughts, or pollution fines can disrupt business operations. By being more sustainable, companies can protect themselves against these risks. Finally, sustainability helps build stronger relationships with stakeholders. Customers, employees, and investors are more loyal to businesses that care about people and the planet.
To sum up today’s lesson, environmental influences have become a key factor in how businesses make decisions. Companies need to follow environmental laws, meet consumer expectations, and take responsibility for their impact on nature. By conducting environmental audits and making sustainability part of their strategy, they can build trust, improve efficiency, and protect their future success. But businesses that ignore environmental issues risk losing customers, facing penalties, and damaging their reputation.
