What is the relevance of ecological issues to the business environment?

Expert Answers
Lorraine Caplan eNotes educator| Certified Educator

Ecological/environmental issues have a large impact on businesses for a number of reasons. Costs and public relations are affected areas of note.

While our changing environment may not affect all businesses directly and immediately in a monetary way, it will affect all businesses indirectly over time. Let's take the example of climate change. Climate change is going to be a game-changer for business, and in some instances already is. Businesses located in many coastal areas will have to increase their insurance coverage, if that is possible, or will have to relocate completely, as more extreme weather and rising seas put some businesses' physical plants at risk.  This can be an enormous expenditure, even without calculating the cost of lost business. The business losses and expenses after Hurricanes Sandy and Katrina were in the billions.

Agriculture-centered businesses are another example. Climate change may very well create areas in which previously grown crops are no longer viable. Even if a farmer is able to change crops, this is costly. Just a few degree increase in temperature is probably enough to reduce or wipe out any number of crops.

A company that does not heed its energy "footprint" is probably subjecting itself to needless costs. A "green" building reduces overhead greatly, keeping down energy bills. A company that keeps most of its records on paper, rather than online, is similarly spending money needlessly. 

Many consumers today have concerns about the environment and will express those concerns by avoiding businesses that are not environmentally conscientious. Environmentally conscientious companies will promote their green values as a form of good public relations, and some consumers will vote with their pocketbooks and change allegiances based upon this, just as they do so over social issues. An environmentally irresponsible company generates very bad PR in the eyes of many.

It may not be particularly persuasive to argue to businesses that they should be ecologically responsible for ethical reasons. When one starts to look at bottom line and reputation, though, there are financially compelling reasons for businesses to do so.