Busines

s&
Society

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Business and
Society in the
Natural
Environment

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 CHAPTER:4

PRESENTED BY:
DR. URVASHI ANAND OHRI

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Greener and
Smarter

– Environmental issues
are at the same time
everybody’s problem
and nobody’s problem.
– Human beings are
learning more and
more every day.
– But are we learning
more at a fast enough
pace?
– How can we ensure
that we use resources
efficiently in the face of
externalities?
 Externalities in Our Lives

– An externality is a cost or benefit that arises

from production and falls on someone other
than the producer, or a cost or benefit that arises
from consumption and falls on someone other
than the consumer.
– A negative externality imposes an external cost
and a positive externality creates an external
benefit.
 Externalities in Our Lives

The four possible types of externality are:

 Negative production externalities
 Positive production externalities
 Negative consumption externalities
 Positive consumption externalities
 Externalities in Our Lives

Negative Production Externalities

– Negative production externalities are common.
– Examples are noise from aircraft, logging and
clearing of forests, and pollution
 Externalities in Our Lives

• Positive Production Externalities

– Positive production externalities are less
common than negative externalities.
– Example: Bourville factory located in a
bournville area of UK.
 Externalities in Our Lives

• Negative Consumption Externalities

– Negative consumption externalities are a
common part of everyday life.
– Smoking in a confined space poses a health risk
to others; noisy parties or loud car stereos
disturb others.
 Externalities in Our Lives

• Positive Consumption Externalities

– Positive consumption externalities are also
common.
– When you get a flu vaccination, everyone you
come into contact with benefits.
 The Sustainability Imperative

Sustainability
Business that meets the needs of the present
without compromising the ability of future
generations to meet their own needs.
Focuses on the creation of a good quality of
life for both current and future generations of
humans and nonhumans.

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 Six Principles of Sustainable Success

1. Your business is part of a much larger system.

2. The culture of your business is determined by
the context you create for it.
3. The soul of a business is found in the hearts
of its people.
4. True power is living what you know.
5. You can’t predict the future, but you can
create it.
6. There is a way to make an idea’s time come.
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Introduction to the Natural Environment

Humans are part of their natural

environment.
The environment is extremely complex.

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Forces of Change:

Pressure on the Earth’s resource base is becoming increasingly

severe. Two critical factors have combined to accelerate the
ecological crisis facing the world community and to make
sustainable development more difficult: population growth and the
rapid industrialization of many developing nations.

a) The Population Explosion

b) Economic Development

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The Earth’s Carrying Capacity:

The Earth’s rapid population growth, together with economic

development of many of the world’s poorer nations and people’s
rising expectations, are on a collision course with a fixed barrier: the
limited Carrying Capacity of the Earth’s ecosystem.

One method of measuring the Earth’s carrying capacity, and how far
human society has overshot it, is called the Ecological
Footprint. This term refers to the amount of land and water a
human population needs to produce the resources it consumes and to
absorb its wastes, given prevailing technology.

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 CHANGES IN
EVERY ASPECT IS
REQUIRED

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Technological innovation
One approach is to develop new technologies to produce energy, food, and
other necessities of human life more efficiently and with less waste. Vast
solar arrays in the desert, offshore wind turbines, or state-of-the-art utilities
could power homes and businesses.

Changing patterns of consumption

Individuals and organizations concerned about environmental impact could
decide to consume less or choose less harmful products and services, or to
buy from companies committed to sustainability in their own operations.
Mobile applications, such as those developed by goodguide.com, now allow
individuals to scan a product’s barcode in a store with their smartphones and
receive instant information on its environmental impact.

“Getting the prices right.”

Some economists have called for public policies that impose taxes on
environmentally harmful products or activities.

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 Top Ten 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 18
 Climate Change
Climate change
• Also known as global warming
Greenhouse effect
• The prevention of solar heat absorbed by
our atmosphere from returning to space.

Nearly all legitimate scientists fear the

possibility of swift and radical climactic
changes
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 Energy
 A major environmental issue is energy
inefficiency, wasting nonrenewable sources
of energy.
Addressing energy efficiency
• Use as little energy as possible
• Shift to renewable sources
• Solar
• Wind
• Hydroelectric
• Biomass
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 Water
Degradation of oceans and waterways
• Municipal sewage
• Industrial wastes
• Urban runoff
• Agricultural runoff
• Atmospheric fallout
• Overharvesting
• Deforestation
• Overgrazing
• Over-irrigation

 The world is facing water bankruptcy

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 Biodiversity and Land Use

Biodiversity
• The variation of life forms inside an
ecosystem.

 Because of human activity, biodiversity is

being lost at 1,000 times higher than the
natural rate.

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 Land Use
Land degradation from human use
• Desertification
• Deforestation
• Overgrazing
• Salinization
• Alkalization
• Urban sprawl

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 Chemicals, Toxics and Heavy Metals

Toxic substances
• Chemicals or compounds that may present
an unreasonable threat to human health and
the environment.
• Two main problems:
1. We are not always aware of the effects of
exposure to chemicals.
2. Toxic substances can be associated with
industrial accidents, causing unforeseen
widespread biological damage.

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 Air Pollution

Effects of air pollution

 Acid Rain
 Global Warming
 Smog
 Depletion of the ozone layer
 Serious respiratory illnesses

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 Ozone Depletion

Ozone depletion
• Ozone is harmful near the surface of the
earth, but vital in the atmosphere.
• It blocks dangerous ultraviolet radiation
from the sun.
• Decrease in stratospheric ozone comes
from human use of CFCs and other
chemicals.
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 Oceans and Fisheries
Watershed
• An area that drains to a common waterway.
• Business activities are associated with
significant damage to a number of coastal
ecosystems, including salt marshes,
mangrove swamps, estuaries, and coral reefs.
• The oceans are running out of fish to meet
human needs.
• Conservation efforts have helped some
species recover.
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