Ethical considerations
- Ethics are moral principles about right and wrong. Ethical issues for businesses include fair pay and working conditions (including in suppliers' factories), honest marketing, animal testing, fair trade and treating suppliers fairly.
- Benefits of acting ethically: a good reputation, loyal customers, motivated staff and attracting ethical investors. Costs: higher costs, lower profit or higher prices.
Environmental considerations
- Businesses affect the environment through pollution, waste, packaging, carbon emissions and the use of resources.
- Sustainability means meeting today's needs without harming future generations. Businesses can recycle, cut packaging, use renewable energy, reduce transport emissions and use sustainable materials.
- Customers, pressure groups (such as Greenpeace) and laws (such as the UK's plastic packaging tax, introduced in 2022) push businesses to act.
Trade-offs
- Ethical and environmental choices often cost more in the short term, but can help a business succeed in the long term through its reputation and customer loyalty.
Key terms
- Ethics
- Moral principles about what is right and wrong.
- Fair trade
- Trade that guarantees producers a fair price and decent conditions.
- Sustainability
- Meeting today's needs without harming future generations.
- Carbon footprint
- The greenhouse gases produced by an activity or product.
- Pressure group
- An organisation that campaigns to influence businesses or the government.
- Corporate social responsibility
- A business taking responsibility for its effects on society and the environment.
- Renewable energy
- Energy from sources that won't run out, such as solar and wind power.