Environmental Factors:

The environment is an ever-changing factor. The society we are living in is different

from what it was earlier in many ways. To keep the business afloat and rising, it needs
to accept and adapt to these changes. The environment comes under macroeconomics,
and it has proved to be the gateway of both the opportunities of growth and the threat
of falling. The environment has a huge impact on any business as any business runs
and operates under a certain domain. So, the company cannot ignore the factor like
environment which also has a huge impact on society.
Environmental factor in PESTEL analysis concerns the ecological impact of the
environment on business or industry. Business needs to plan how they can adapt to
these changes to run the business smoothly. In today's era, it is important to have an
environmentally friendly operation for every industry. Companies need to be more
responsible towards their corporate social responsibility as well.
Key Environmental factor includes the following:
 Climate
 Temperature
 Environmental policy
 Availability of inputs
 Corporate Social Responsibility
Climate
Environmental issue such as global warming is one of the challenging issues faced by
every company. Thus, changes in the climate led the corporations and businesses to
lower carbon emissions, preparing for the effect of global warming in their supply
chain. For example, Big Bazaar strives to reduce environmental impact and optimize
energy consumption.
In the FMCG industry, improving energy efficiency for important environmental will
ultimately benefit and reduce operating costs. FMCG companies are also focusing on
the designing of green products and packaging. Sustainability is becoming the
epicenter of FMCG business strategy. From the innovation of the supply chain to the
energy efficiency of distribution, the sector will be taking more steps towards
reducing environmental damage in the coming year.
Environmental protection
Nowadays, consumers are looking not only for the retailers' products but also at how
the organization conducts itself to contribute to the climate emergency proactively.
That could be the reason why the FMCG industry is making headway in supporting
environmental charities. For example, Leading global supermarket Tesco has
partnered with WWF to improve the global food system actively.
Availability of inputs
Availability of inputs is related to a hike in the price of the commodity. If inputs (Raw
Material) are easily available to the manufacturer, the goods' price may be below that
of the scenario when materials are not easily available. We can see the price hike in
Fast Moving Consumer goods to offset inflationary pressure on their key raw material.
Firms like Hindustan Uniliver, Nestle, Emami, Tata consumer goods have increased
the price while others are closely tracking the path.
Corporate Social Responsibility
Corporate Social Responsibility (CSR) initiatives are taken by many of the companies
in India. Corporate Social Responsibility is divided into four groups is Environmental,
Philanthropical, Economical and Ethical. Especially for the FMCG industry, the
biggest challenge is packaging the material. So, this company are working in the area
of Health Care, education, Community warfare, Environment, Girl child care, women
empowerment etc.
Over the last few years, most of the FMCG industry has been trying to position itself
as a more ethical and responsible brand by supporting social movements in marketing
campaigns. The pandemic situation of COVID-19 has placed the CSR of many
consumer-facing companies at the center stage.
The environmental factor that has a huge impact on the FMCG industry. Because of
this factor, companies are becoming more conscious of reducing carbon emissions and
spreading awareness among their consumers.