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ACCA Applied Knowledge · Business and Technology · Environmental and sustainability factors

A food processing company chooses to install energy-efficient equipment and to cut packaging waste, although no law requires it, because it believes this will lower costs and appeal to customers. This approach is best described as which of the following?

This is proactive environmental management, because the company acts voluntarily without any legal requirement, aiming to lower costs and attract customers, which can create competitive advantage. Reactive compliance would involve acting only when forced by regulation.

  1. AReactive compliance with environmental regulation
  2. BProactive environmental management that can create competitive advantageCorrect
  3. CAvoidance of corporate social responsibility
  4. DTransfer of environmental costs to society

Explanation

The company acts voluntarily, ahead of any legal requirement, to reduce costs and enhance its appeal. This is proactive environmental management. Reactive compliance would mean acting only because the law demands it, which is not the case here.

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