Examples of Environmental Factors Affecting Business

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Examples of Environmental Factors Affecting Business

Environmental Policies: Environmental policies are another external factor that can impact the strategy of a business. Environmental policy is the commitment of a business to the regulations, laws as well as other policy mechanisms that are concerned with environmental issues. Environmental policy impacts businesses because the law implies organizations to change their operational procedures and equipment so as to meet those standards which can cost businesses some good amount of money.

Climate Change: Climate change became an insidious threat to businesses as its pace can be recognized only when it is taken into consideration on the basis of decade-after-decade. Increasing issue of global warming and adverse weather conditions in the recent few years, it is difficult for companies and organizations to operate equally in every type of weather condition. Businesses that are directly dependent upon adequate water supply e.g., field sports or agriculture will be affected adversely if climatic changes resulted in reduced rainfalls. Even consumers are becoming aware and keen about this factor and are prone towards those brands which are saving the environment or supporting this cause.

Green Agenda: Business-related activities impact the environment; however, the environment also has an effect on businesses and the market environment. Now enterprises have realized that in order to achieve business goals, there is a need to draft environmental-friendly policies. Green agenda is a plan where enterprises manage their operations in such a way so that there is minimal negative impact on the local or global environment. In order to be environmentally responsible, corporations need to devise plans and procedures in their operations and activities which is beneficial not only company but, for the overall environment as well.

Pollution: Pollution can also have an impact over business strategies. Pollution may cause some major environmental events which can result in the disruption of supply chains or an increase in the cost of raw material. Organizations need to monitor such events and develop contingency plans so as to deal with them.

Availability of natural resources: Among-st external environment factors, this factor refers to the physical environment of a business. Natural resources are very important for most businesses and many corporations have natural resources as their major raw material. Lack of natural resources can hinder an organization’s producing ability and hence its output.

Recycling: Recycling is another aspect of a greener environment. The cost of dumping waste in landfills is increasing and is resulting in not only shortage of wastage's but, it also provides harm to the environment. Recycled materials not only results in making the production process cost-effective but, it also helps the business to save some money and helping the environment.

Waste Disposal: Although, there has been a positive trend towards recycling of waste materials, still there is several businesses which dump wastage in landfills.  This not only increases their cost of dumping waste but, is also harmful to the environment in which the business operates. Businesses, in order to meet their bottom line, should first look at producing less waste and use fewer resources which will reduce their production cost along with making the corporation sustainable.

Reference:https://www.marketingtutor.net/environmental-factors-affect-business/