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Growing the Business

Ethics, the environment and business

  • 3 things to know
  • Paper 2

Overview

Ethical behaviour and Fairtrade, the trade-offs between ethics, the environment and profit, sustainability, UK law on plastic waste, and how pressure groups influence businesses.

What you need to know

Answer each one before you reveal it.

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Key term

What does ethical behaviour look like in a business?

Key term

What does it mean for a business to act ethically?

Key term

Give examples of ethical business behaviour.

Questions from this subtopic

Each one with the model answer underneath.

  1. 1

    What does it mean for a business to act ethically?

    Model answer

    An ethical business does what is morally right, not just what is legal or profitable. Ethical behaviour covers fair treatment of workers, suppliers, customers and the community.

  2. 2

    Give examples of ethical business behaviour.

    Model answer

    Paying suppliers a fair price and treating workers well are ethical choices. Honest advertising and a supply chain free of child labour are ethical too.

  3. 3

    What is Fairtrade?

    Model answer

    Fairtrade is a certification scheme that guarantees farmers in poorer countries a minimum price for their crops. Farmers also receive an extra premium to invest in their communities.

  4. 4

    What is the trade-off between ethics and profit?

    Model answer

    Ethical choices often raise costs, such as higher wages or dearer Fairtrade supplies. Higher costs can reduce profit unless customers are willing to pay more.

  5. 5

    How can ethical behaviour increase a business's profit?

    Model answer

    An ethical reputation can attract customers willing to pay a premium price. Staff may be more motivated and loyal, cutting recruitment costs.

  6. 6

    Why might a clothing retailer face a trade-off over where its garments are made?

    Model answer

    Factories paying very low wages cut costs and allow low prices. Poor conditions there risk boycotts and bad publicity that could hit sales.

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