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

A food producer decides to cut packaging and switch to renewable energy, which lowers its energy bills and improves its brand image with customers. Which term BEST describes the link between environmental action and business benefit shown here?

This is eco-efficiency delivering competitive advantage. Using less packaging and renewable energy reduces costs and waste, while the improved green image helps differentiate the brand. The gains do not arise from economies of scale alone or from diversifying into unrelated markets.

  1. AEco-efficiency delivering competitive advantageCorrect
  2. BCost leadership through economies of scale only
  3. CDiversification into unrelated markets

Explanation

Eco-efficiency means using fewer resources and creating less waste, which cuts costs, and a greener image can differentiate the firm. The benefits here do not come from scale or from entering unrelated markets.

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