6.2 Environmental & Ethical Issues

Revise 6.2 Environmental & Ethical Issues for Business 0450 (O Level) — revision notes and instant AI marking.

📖 Revision notes · preview

6.2 Environmental & Ethical Issues

Cambridge IGCSE Business

The Big Idea: Businesses have impacts on the environment and society beyond just making profit. These "spillover effects" matter, pressure groups are forcing change, and ethical decisions are becoming a competitive advantage.

Chapter Overview

Externalities & Costs

What are externalities
Private vs social costs
External costs & benefits
Real-world examples
Government controls

Pressure & Sustainability

Sustainable development
How businesses go green
What pressure groups are
Consumer power
Famous campaigns

Ethics & Values

Business ethics defined
Ethical codes of practice
Gender pay gaps
Fair wages & sourcing
Exam technique

Environmental Concerns: Externalities

What Is an Externality?

An externality occurs when a business transaction between a buyer and seller creates side effects — good or bad — that impact other people not involved in that transaction. Think of it as a spillover effect.

Real Example: A factory makes cheap plastic bags. The factory pays its workers and sells the bags — that's a clean transaction between buyer and seller. But the factory also releases toxic chemicals into the local river. The families downstream who drink that water pay the cost (illness, water damage) but had no choice in the transaction. That's an externality: a cost imposed on someone outside the deal.

Key Point: Externalities can be negative (pollution, waste, damage) or positive (education, research that benefits others, conservation).

How Businesses Affect the Environment

Effect Type	What Happens	Real Example
Resource Consumption	Businesses use water, energy, and raw materials. When overused, these run out or come from environmentally sensitive areas.	Logging in South America destroys rainforests, killing biodiversity and accelerating global warming.
Pollution	Industrial processes release toxic gases, chemicals, and waste into air and water, harming ecosystems and human health.	Food and consumer goods makers produce 60% of global greenhouse gas emissions. Single-use plastics harm marine turtles and break down into toxic chemicals.
Waste Generation	Packaging, e-waste, and solid waste pile up. Poor management leads to landfill overflow and pollution. Often exported to poorer countries.	Tech companies exported e-waste to China and Nigeria, where workers handle it unsafely, dumping toxic waste near homes.
Innovation & Sustainability	Smart businesses drive positive change through renewable energy, sustainable materials, and conservation.

Private Costs vs. External Costs vs. Social Costs

🔓 Read the full 6.2 Environmental & Ethical Issues note → You're seeing the preview · sign in to read it all

Also in the full note

Environmental Concerns: Pressure Groups
Ethical Issues To Consider
What to Memorise
Concepts Checklist
Exam Tips & Common Mistakes
The Same Logic for Benefits (Positive Externalities)
How Governments Control Business Environmental Damage
Sustainable Development: The Goal

What's inside

📖 Revision notes 🎯 Learn mode ✦ AI flashcards ✓ Instant AI marking 🧊 3D explorers 🧪 Experiments & simulations 📈 Progress tracking

📄 Practise 6.2 Environmental & Ethical Issues with Business 0450 past papers Every paper with its mark scheme — answer online, marked instantly. Open →

Read the full 6.2 Environmental & Ethical Issues notes free

That's the preview — create a free account to read the rest, plus flashcards and practice questions with instant AI marking. No credit card.

Unlock the full notes free →

6.2 Environmental & Ethical Issues