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ENVIRONMENTAL AND ETHICAL ISSUES (externalities (private benefits (gains…
ENVIRONMENTAL AND ETHICAL ISSUES
sustainable development
what can business do
use renewable energy
recycle waste
use fewer resources
develop new environmentally friendly products and production methods
Sustainable development is development which does not put
at risk the living standards of future generations
business examples
Tesla uses electrical cars which reduces pollution
Panasonic eliminates the need for employees to drive to work and cut down carbon footprint
Nike recycles materials and design its boxes to reduce packaging, committed to eliminating chemical discharges, invests in green efficiency
responding to environmental pressures and opportunities
IKEA
Swedish furniture-maker
has sourced close to 50 per cent of its wood from sustainable
foresters
100 per cent of its cotton from farms that meet the Better Cotton standards
mandate reduced user of water, energy and chemical fertilizers and pesticides
externalities
Externalities are third party effects arising from production and consumption of goods and services for which no appropriate compensation is paid
private benefits
gains to a business or the consumer of the product
eg: money made from sales of a restaurant
private costs
costs paid for by a business or the consumer of the product
eg: private costs of a restaurant: ingredients, wages, renting, electricity, etc.
external benefits
the gains to the rest of society, other than the business, as a result of business activity
eg: restaurant makes food for consumer, job created, suppliers provide ingredients
external costs
costs paid for by the rest of society, other than the business, as a result of business activity
eg: leftover and perishable food go directly into the environment like river without process
social benefits = external benefits + private benefits
eg: provide jobs,pay tax to government ,food made for consumer
social cost = external costs + private costs
eg: left over pollute river,ingredients,electricity bill,