Doing the right thing rarely comes free. Ethics, environmental responsibility and sustainability all pull businesses towards higher costs in the short term — the question is whether the long-term reward is worth it.
Back in 3.1.3, you met social and ethical objectives as one of the seven things a business might aim for. This topic looks at where that pressure actually comes from — increasingly demanding customers, employees who want to work for a business they're proud of, and a local community and wider public that notices when a business behaves badly.
What makes this topic distinctive is the recurring trade-off at its heart. Being more ethical, more environmentally responsible, or more sustainable almost always costs more in the short term — better-paid suppliers, cleaner production methods, and more expensive raw materials all eat into profit. AQA wants you to be comfortable weighing that trade-off rather than assuming "doing the right thing" is automatically the right business decision, or that ignoring it is automatically the wrong one.
It's also worth noticing how this pressure has grown over time. A generation ago, a business's environmental impact or supply chain conditions were rarely visible to the average customer. Today, social media, investigative journalism and campaign groups can expose poor practice to millions of people within hours, which has raised the real-world cost of getting this wrong considerably.
Ethical behaviour means a business acting in ways that stakeholders consider to be fair and honest — not just legally compliant, but genuinely reasonable in how it treats the people and communities affected by what it does.
Paying suppliers a fair price and on time, rather than using size or bargaining power to squeeze their margins.
Paying a fair wage, providing safe working conditions, and avoiding exploitative practices anywhere in the supply chain.
Advertising products and prices truthfully, without misleading claims about what a product does or where it comes from.
The tension AQA specifically wants you to explore is between ethics and profit. Sourcing Fairtrade ingredients, auditing suppliers' factories, or paying above the minimum wage all raise costs — costs that either come out of profit or get passed on to customers through higher prices. A business has to judge whether the resulting boost to its reputation, customer loyalty and staff motivation is worth more than the immediate hit to its margins.
Environmental considerations cover the direct, often local, impact a business's operations have on the world around it — separate from the ethical treatment of people covered above, though the two frequently overlap in practice.
Delivery vehicles and staff commuting to a large site can clog local roads, especially near residential areas.
How much packaging and waste material a business's products generate, and whether that material can be reused.
Safely and responsibly disposing of production waste, rather than passing the cost onto the environment or local area.
Factories, warehouses and delivery traffic can create noise and emissions that directly affect nearby residents.
Businesses and consumers alike are increasingly expected to take greater responsibility here. A supermarket introducing reusable bags, a manufacturer switching to recyclable packaging, or a delivery firm moving to electric vans are all responses to this rising expectation — sometimes driven by customer pressure, sometimes by upcoming legislation (see 3.2.5), and sometimes simply to avoid reputational damage.
Sustainability means meeting today's needs without compromising the ability of future generations to meet theirs — in a business context, that usually means addressing global warming and the use of scarce, finite resources.
Sustainability decisions often force the sharpest version of the ethics-vs-profit trade-off in this whole topic, because the costs are immediate and certain, while the benefits — a stable climate, resources that last for future decades — are long-term, shared across society, and hard to attribute to any one business's actions. This makes it tempting for an individual business to under-invest in sustainability, even when it would clearly benefit everyone if all businesses acted together.
Every sustainability decision sits somewhere on this scale — a business rarely gets to maximise both at once, and where it lands often depends on how patient its owners and shareholders are willing to be.
Drag each business action into the category it best fits.
State two ways a business can behave ethically.
Structure guide: two correctly named examples — 1 mark each, no explanation required.
State and explain two environmental considerations affecting Kelso Furniture.
Structure guide: state a consideration grounded in the case study (1 mark), explain it (1 mark) — repeated twice over.
Analyse how switching to FSC-certified timber might affect Kelso Furniture's relationship with its stakeholders.
Structure guide: a single developed line of reasoning grounded in the case study (eg: switching to sustainably sourced timber could improve Kelso Furniture's reputation with environmentally-conscious customers → this may help win back trust after complaints from local residents about noise and traffic → potentially explaining the sales increases competitors have seen after making the same switch → though this depends on customers being willing to pay the higher price the 15% cost increase would likely bring).
Recommend whether Tom should switch Kelso Furniture to FSC-certified timber. Justify your answer using the case study.
Structure guide: a "recommend" question needs a justified judgement — weigh the reputational and sales benefits suggested by competitors' experience against the certain 15% cost increase and Tom's existing tension with local residents, before reaching a clear final recommendation.