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Natural & Technical

Environment
Dr. Purvi Pujari
Syllabus
Ecological issues
Sustainable development
Natural Environment
Natural environment is the source and support of
everything used by businesses. The geographical and
ecological factors such as natural resource
endowments, weather and climatic conditions,
topographical factors, locational aspects in the global
context, port facilities etc. are all relevant to business.
Natural Environment
It includes natural resources, weather, climatic
conditions, port facilities, topographical factors such
as soil, sea, rivers, rainfall etc. Every business unit
must look for these factors before choosing the
location for their business.
Features Of Natural Environment

Uncontrollable
Creates
by one
restrictions
firm/business

Affects the
Provides
location
physical inputs
decision
Natural Environment Trends
Shortage of raw materials.
Limited quantities of non-renewable resources.
Increased pollution.
Waste disposal, air/water pollutants.
Increased government intervention.
Kyoto and other initiatives.
Environmentally sustainable strategies.
G.R.E.E.N. movement.
Eight Environmental Issues
Ozone depletion Degradation of
Global warming marine
environments
Solid and hazardous wastes
Deforestation
Fresh water quantity and quality
Land degradation
Endangerment of
biological diversity

7
Other Environmental Issues
Toxic substances
Air/rain pollution
Radon pollution
Indoor air
Noise pollution
pollution

Aesthetic pollution
Energy efficiency

8
The major areas of environmental
concern
Atmospheric
Impacts

Aquatic Impacts

Terrestrial Impacts

Ecosystem Impacts

Potential
Emergencies
Business Environmentalism
Use of corporate examples
Environmental and financial performance
Systematic business responses to the environmental
challenges:
Generic management decision-making tools
Cost-benefit analysis
Risk management
Strategic environmental management
Environmental Sustainability
Employees, consumers, governments, and
society are especially resentful of firms that
harm rather than protect the natural
environment
Conversely people today are especially
appreciative of firms that conduct operations
in a way that mends, conserves, and
preserves the natural environment
Ecological Environment:
‘Ecology’ is a science telling about the relationship of all
living beings (i.e., human beings, animals and plants), with
non-living beings (air, water, soil, rivers, land and
mountains). ‘Eco System’ is a complex and wider term
denoting the relationship between living and non-living
things as a whole in a particular region.
To preserve the society, it is important to protect the
environment. Therefore, every business must take measures
to protect the environment rather than damaging it. Nature
has given us: air, land including mountains, hills, forests etc.
and water in the form of rivers, lakes, sea etc.
i) Air pollution:

Air pollution refers to the presence of any unwanted


gases, dust particles etc., in the air, that can cause
damage to people as well as nature. Some of the common
causes of air pollution are:
1. Emission of fumes from vehicles.
2. Emission of smoke dust and chemicals from
manufacturing plants.
3. Emission of gases and dust arising from atomic plants.
4. Emission of smoke from oil refineries, burning of trees
and plants in forests, burning of coal, etc.
(ii) Water pollution:

Water pollution refers to contamination of water due to


presence of unwanted and harmful substances thus,
making water unfit for use. The various reasons of water
pollution are:
1. Drainage of human excreta into rivers, canals etc.
2. Dumping of wastes and effluents by various industrial
units into the rivers and canals.
3. Drainage of toxic substances like chemicals and
fertilizers used in cultivation, into streams and rivers.
4. Dumping of garbage, dead bodies and almost everything
used in rituals to the nearby water sources by households.
(iii) Land pollution:

Land pollution refers to dumping to useless, unwanted as


well as hazardous substances on the land that degrades the
quality of soil we use. The main causes of land pollution
are:
1. Excessive use of fertilizers, chemicals and pesticides in
cultivation.
2. Disposal of solid waste of industries mines and quarries.
3. Effluents of some plants like paper, sugar etc., which are
not absorbed by soil.
4. Excessive use of plastic bags, which are non-
biodegradable.
iv) Noise Pollution
Noise pollution refers to an unwanted and unwarranted sound
created at a wrong time and in a wrong place, causing physical
and psychological disturbances to the people who are subject
to the hearing of these noises. The main causes of noise
pollution are:
1. Jet planes, trains, generators, heavy vehicles and
automobiles.
2. In industrial centres, with the working of the engines, rotary
drills, riveters, pumps, motors, compressors, vibrating screens.
3. Construction of buildings, using of bull-dozers, cranes,
compactors, excavators, concrete mixers.
Sustainability
and the Natural Environment
Sustainability -
• Business that meets the needs of the present without
compromising the ability of future generations to
meet their own needs.
• Akin to walking lightly on the earth, taking only
what’s needed, and leaving behind enough for future
generations to have access to the same resources.
• Sustainability means running the global environment
– Earth, Inc. – like a corporation: with depreciation,
amortization and maintenance accounts.
• Keeping the asset whole, rather than undermining
your natural capital.
The Sustainability Imperative (1 of 2)
• Businesses used to label the environment an externality
and paid no attention to the damage they caused. Now,
it requires action, both a necessity, and an opportunity.
CERES identifies several key drivers:
Competition for resources - demand is growing more
quickly than they can be replaced.
Climate change - business must be prepared to respond
to new policies regarding emissions, and to take advantage
of new technology.
Economic globalization - wide disparities in social and
environment standards bring risks and opportunities.
Connectivity and communications - stakeholders can
monitor and react to sustainability efforts more quickly.
Reputations are quickly built and destroyed.
The Sustainability Imperative (
• A leading advocate of business sustainability is
Unilever. The CEO sought out long-term investors
as shareholders, rather than short-term hedge-
fund managers, banned quarterly earnings
reports, and embarked on a 10-year plan. As of
2012, Unilever had:
• Health & Hygiene – reached 224 million people
• Improving nutrition – a majority of products
met national standards, with 18% meeting highest
nutritional standards
• Greenhouse gases – impact was reduced by 6%
• Waste – impact per consumer was reduced by 7%
The Impact of Business
on the Natural Environment
The Top Ten fundamental environmental issues:
1. Climate Change
2. Energy
3. Water
4. Biodiversity and Land Use
5. Chemicals, Toxics, and Heavy Metals
6. Air Pollution
7. Waste Management
8. Ozone Layer Depletion
9. Oceans and Fisheries
10. Deforestation
Environmental Ethics
• Humans must consume at least some plants and
water to survive. What level is ethical? Which
school of environmental thought should we apply?
• Kohlberg – levels of moral development
• Utilitarianism – greatest good for greatest number
• Integrating sustainability into a firm’s philosophy is
a natural extension of stakeholder theory,
including as a stakeholder the ecological
system from which the firm obtains resources and
to which it bears responsibility for its impacts, both
positive and negative.
Natural Environment
The natural environment includes geographical and
ecological factors that influence the business operations.
These factors include the availability of natural
resources, weather and climatic condition, location
aspect, topographical factors, etc. Business is greatly
influenced by the nature of natural environment. For
example, sugar factories are set up only at those places
where sugarcane can be grown. It is always considered
better to establish manufacturing unit near the sources
of input. Further, government’s policies to maintain
ecological balance, conservation of natural resources etc.
put additional responsibility on the business sector.
Managing Environmental
Affairs in the Firm
Environmental strategies can include:
developing or acquiring green businesses
divesting or altering environment-damaging
businesses
striving to become a low-cost producer through waste
minimization and energy conservation
pursuing a differentiation strategy through green-
product features
Importanceof Natural Environment
1. Consumer demand for environmentally safe
products and packages is high.
2. Public opinion demanding that firms conduct
business in ways that preserve the natural
environment is strong.
3. Environmental advocacy groups now have over
20 million Americans as members.
4. Central and state environmental regulations are
changing rapidly and becoming more complex.
Importanceof Natural Environment
5. More lenders are examining the environmental
liabilities of businesses seeking loans.
6. Many consumers, suppliers, distributors, and
investors shun doing business with
environmentally weak firms.
7. Liability suits and fines against firms having
environmental problems are on the rise.
Steps for taking care of Natural Envt.
 1. Green Products: Promoting and creating market demand for green
products, where requirements for a product to be deemed as a green
product will be mandated through National Standards on Green
Products.
 2. Green Buildings: Promoting and creating market demand for the
 construction and utilization of green buildings
 3. Sustainable Environment Management in MSMEs: Forming
tailored and scale-specific compliance mechanisms and measures to
ensure compliance in MSMEs
 4. Environmental Regulatory Reforms and Market Based
Instruments: Reforming the environmental regulatory system and
mechanism, by strengthening regulatory institutions and existing
regulations, and through the formation of new industry focused
policies to improve environmental conditions
5. Organized Waste Management and Recycling Industry:
Promoting a national recycling industry within the currently
unorganized recycling sector, with a particular focus on
mainstreaming research and design to recycling and recovery
technology and mainstreaming them to industry.

6. Green and Clean Technology Fund: Formation of green and
clean technology fund for funding research and design of green
and clean technologies, and promoting green entrepreneurs.

7. Disclosure on Performance: Promoting disclosure of the
environmental performance of a company, in line with national
benchmarks for resource
usage and waste generation.
Impact of Natural Environment on Business
Location Decision
Resources Availability
Economic impact – Cost of production, Fines
Transportation Cost
Demand factors
Production factors- Humidity/Pressure
Warehousing
Geographical considerations influence and determine the number of
business decisions. Tea and coffee cultivators are preferred to be
located in hill regions, where the climate is suitable for cultivating the
crops.
The people tend to have similar tastes in a particular geographical
region. Thus, the product very much consumed by South Indian
people, may not find buyers in northern India, because of regional
differences.
Also, the availability of raw materials like minerals and other products
in a particular geographical region affects locational decisions of a
business. Because it is always cheaper to transport finished product as
compared to raw material. For example, the steel plants are invariably
located near the iron ore mines.
The natural structure of the area, i.e., whether it is plain, hilly or sea
coast, also affects certain strategic business decisions. The
manufacturing units and factories, for instance, will not be suitably
located in the hilly regions for difficulties in transport, unless raw
materials availability or suitable climatic conditions justify its location
in that region. Similarly, what should be produced 0r traded to a great
extent depends upon the geographical environment.
(iii) Awareness role:

It means making people (both the employees as well


as the general public) aware about the causes and
consequences of environmental pollution. So that they
voluntarily try to protect rather than damage the
environment.
For example, business can undertake public awareness
programmes. Now a day’s some business houses have
taken the responsibilities to develop and maintain
parks and gardens in cities and towns, which show
that they care for the environment
THE RELATIONSHIP BETWEEN
BUSINESS AND THE ENVIRONMENT

Environmental responsibility is a vital


component of a business strategy as
it not only helps the environment, but it
wins the trust of communities and
gains the respect of the governments of
the countries in which the business
operates. All businesses impact on the
environment: they emit pollution,
they produce waste and use resources