Environmental Factors (SQA National 5 Business Management): Revision Note
Exam code: X810 75
Climate change
Businesses are increasingly affected by the environment – both through physical changes like weather and climate and through pressure to operate sustainably
The impact of climate change on business
Seasonal demand
Weather patterns influence sales
Warm summers increase demand for products such as cold drinks, ice cream and outdoor leisure goods
Cold winters may boost sales of heating appliances and warm clothing
Extreme weather
Climate change has led to more frequent events such as flooding, storms and heatwaves
These can disrupt supply chains, halt production and prevent deliveries from reaching customers
Long-term impact
Rising sea levels and unpredictable weather may force businesses to rethink locations and logistics and may increase insurance costs
Case Study
ScotRail, Scotland’s national rail operator, has been directly affected by the growing impact of climate change
Severe weather events such as heavy rain and storms have caused flooding and landslides on key routes, leading to cancellations and major service delays
These disruptions have increased repair and maintenance costs and damaged customer confidence in the reliability of services
In response, ScotRail has invested in better drainage systems, slope monitoring technology and detailed contingency plans to reduce future disruption and keep passengers safe
Environmental protection
Operating in an environmentally responsible way can bring some key benefits for businesses
Reputation benefits
Customers are more likely to buy from businesses that show commitment to sustainability, such as recycling, using renewable energy or reducing packaging waste
Competitive advantage
Businesses that innovate with eco-friendly products or services can appeal to environmentally conscious consumers, giving them an edge over less sustainable rivals
However, being eco-friendly can cause some issues for businesses
Governments and regulators set environmental standards, such as reducing carbon emissions or controlling waste disposal
Businesses may need to invest heavily to comply or risk fines and bad publicity
Case Study
ScottishPower, one of Scotland’s largest energy companies, has made climate change and environmental protection central to its strategy
It became the first major UK utility to switch entirely from coal and gas to generating electricity from renewable sources, mainly wind power
The company has invested heavily in onshore and offshore wind farms across Scotland
This shift improves ScottishPower’s reputation as a sustainable business, helps the Scottish Government meet its climate targets, and appeals to environmentally conscious consumers
However, the investments involve high upfront costs, and the business faces challenges such as maintaining a stable supply when weather conditions change
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