Ecological factors affecting business

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Ecological factors affecting business
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Ecological factors influencing business are connected to actions and processes necessary to protect natural environment and in the same time maintain or increase efficiency of the corporation. Ecology often take form of so called corporate environmentalism, i.e. all actions promoting sustainability, gaining consumer appreciation of eco-friendly products and services, creating image of responsible corporation. There are several ecological factors influencing management decision and business goals. Proper identification of natural environment and its influences during strategic analysis (STEEP analysis, SWOT analysis, TOWS analysis) could lead to better strategic alignment of company to ecosystem and state regulations.

Ecological laws and regulations

  • government policy and policymaker engagement in environmental protection,
  • fees and fines for using natural environment,
  • regulations of waste disposal, recycling and storing,
  • regulations of carbon CO2 and toxic fumes emission,
  • relative “value of nature” in political campaigns,
  • increasingly stringent environmental regulations on regional, state and international levels,
  • cost of non-compliance with ecological regulations,
  • incentives for businesses and customers for using clean products and services,
  • activities of government agencies tracking business activities, giving permits setting minimal standards for any air emissions, procedures for handling waste and hazardous materials, etc.
  • requirements for implementing environmental standards e.g. ISO 14000,

Social pressure towards clean business

  • environmental groups and their activities,
  • attitudes towards eco-friendly products and services (consumer preferences and demand for such products),
  • attitudes toward tourism in intact wetlands, forests, lakes and seas,
  • increased scrutiny of ecological impacts by stakeholders and customers
  • human well being in relation to ecosystem,
  • values and morality, influence of religious beliefs on managers and consumers,
  • costs of protective and proactive environmental measures
  • transparency of corporate activity due to global IT network,
  • influence of non-government organizations (mobilization of people through social networks),
  • increase of risk of extremism and terrorist attack using environmental factors (contamination, nuclear waste, etc.),
  • role of biases, passion and emotions in environmental decision-making

Technological advancements

  • carbon footprint of used technology,
  • energy requirements for technological processes,
  • availability of technologies for emission reduction (chemical-filled smoke, ash and particles),
  • possibility of recycling of waste and components,
  • technology used for mining and acquiring of other natural resources,
  • competitive advantage of new clean technologies (opportunity do differentiate from competitors),
  • capital requirements for eco-friendly technologies,
  • scientific research in area of ecosystems and clean technologies,
  • equipment for handling and moving the waste products and hazardous materials,
  • environmental risk assessment and prevention in production processes,

Natural environment influences

  • water and air pollution (influencing production processes in high-tech companies and food production),
  • quality of water used for consumption or production
  • health problems (employee attrition) in polluted places, healthy environments improve mental and physical health and reduce absenteeism,
  • quantity of renewable and non-renewable resources available,
  • biodiveristy of ecosystems and its protection,
  • minerals, oil, gas and other natural resources deposits,
  • degradation, deforestation and depletion of fisheries and other natural resources,
  • flooding, storms, and other natural disasters caused by human influences on ecosystems (global warming, etc.),
  • climate change, drought and food scarcity could lead to social unrest and international conflicts,
  • ecosystem services used in business processes,


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References

Author: Krzysztof Wozniak