A4.1 Implications of Environmental Constraints on an Organisation
There are a number of reasons why organisations should improve their environmental performance. These reasons can be categorised into the following groups:
- Ethical
- To care for the environment is the right thing to do.
- Social
- The public have a growing appreciation and understanding of environmental issues, which can lead to consumer pressure for organisations to improve (e.g. selecting to purchase items with minimal packaging, wood from sustainable sources or items that do not contain palm oil).
- Legal
- The amount of environmental legislation is increasing year on year. Organisations that do not comply face severe penalties. At present, certain environmental offences may attract unlimited fines and a custodial sentence of up to 2 years for individuals.
- The legal constraints are also wider than simply environmental legislation, health & safety legal requirements must also be met.
- Financial
- Many environmental improvements also bring with them financial benefits (e.g. reducing waste generated will reduce waste disposal costs).
- The income that consumers have to spend may affect the amount they are willing to pay for a product.
- Competition
- If an organisation’s competitors are becoming more environmentally responsible, it must follow suit to remain competitive.
- Technology
- A manufacturing organisation’s operations are related to the technology that is available to them at the time.
We will look at some of these issues in more detail in a moment.