We are living in the world where businesses and individuals are continuously encouraged to pay attention to their impact on the environment. But very often, we do not know where to start.
PESTLE analysis os one of very useful techniques considering different factors which can help us to evaluate the impact. Let's explore each of those factors in more details.
Political factors
Much of the climate in which business operates is conditioned by decisions taken in the political sphere. For example, the actions of national governments in regulating the business conduct in the range of policies and regulations. These actions may relate directly to business, for example through support of a particular sector. In other places, the political factors can have a "knock-on" effect. Additionally global policies may also play role as may government policies have their root in international agreement.
Sustainability are central debate in politics. For example, use of fossil fuel and emission of CO2. In the UK we have number of government policies developed to achieve commitment under Kyoto Protocol (1997).
Another example of sustainability political challenge refers to social and people sphere for the respect of human rights. These include campaigns to battle unfair working conditions and building government policies around this. Such as the Modern Slavery Act, which in multinational organisations should exist in procurement practices.
Economic factors
These could be factors arising from competitive behaviour in the marketplace, such as commodity price, wage and pay inflation, economic growth or lack of it. Those factors are used by government to control economy, such as interest rates, tax policies, control of the money supply. Both national and international factors are closely linked.
In relation to sustainability the main concern is that of resource exhaustion affecting commodity prices. It has been proven that the economic growth has put the world's resources under pressure and this is the result in raising commodity prices. A resource of scarcity is particularly that of food supply raising economic concern with food prices.
Social factors
Businesses work a background of established social norms and behaviours, attitudes and cultural beliefs. This also impact businesses. The way people live determine the type of products and the work they are prepared to do. Additionally, the way a n organisations activities are viewed and their "brand name" will affect the purchasing choices.
A business does not operate in isolation from society, therefore businesses need to consider their responsibilities as the corporate citizen. Public pollution and other concerns resulting from industrial activities threaten the environment. There are also matters of racial inequality, gender inequality or income inequality.
Technological factors
Technologies evolve rapidly, making possible new processes and products. A business which does not respond to technological changes is likely to become uncompetitive. The demands which are placed on organisations have increased with new technologies.
Sustainable business is closely linked with use of new technologies. New technologies emerge in different industries, for example, production of plastic using renewable biological processes which result in biodegradable plastics. Businesses with large building constructions can make a large contributions to the energy consumption by using of solar panels for example. Use of electric cars would also be a technological advancement on the way to sustainable future.
Environmental factors
These cover a number of environmental factors which may impact businesses differently depending on sectors.
All businesses are ultimately depended on the flow of natural resources, or natural capital. Each production starts from someone using natural resources, therefore we need to ensure that we use them effectively. Many studies have proven already that if we will continue the "business-as-usual" global warming would greatly affect economics and social conditions. Businesses therefore, are encouraged to consider the effects of their operations on the environment and natural capital.
Legal factors
These factors relate to regulatory and legal frameworks which constrain the business in the way they operate, including the kind of products they can offer. These frameworks may operate on local, national and international level. These, have close links with political factors.
The activities of business in many areas linked to sustainability are bound by legislation. EU legislation is particularly interesting in relation on how businesses must deal with an electronic waste (WEEE). The legislation sets collection, recovery and recycling targets for member states. Some electronic waste is completely banned from entering landfill sites and the duty is placed on the owner of the equipment to deliver it to designated collection centres. This legislation has been transferred to the UK law after Brexit.
The pattern of sustainability which we find in organisation during this analysis will depend on the sector and industry in which the sector sits.
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