ACCA Applied Knowledge · Business and Technology · Environmental and sustainability factors
A manufacturer discovers that new government legislation will require it to cut carbon emissions by 30% within three years, which will mean replacing its production equipment. In a PESTEL analysis, this is best classified primarily as which type of factor?
It is best classified as a legal factor with an environmental driver, because the compulsion to cut emissions comes from legislation, even though the subject matter is environmental. The equipment cost is merely a consequence of that legal requirement.
- AEnvironmental factor only, because emissions are involved
- BSocial factor, because the public wants lower emissions
- CEconomic factor, because the equipment costs money
- DLegal factor, with an environmental driverCorrect
Explanation
The obligation arises from legislation, so it is a legal factor, although its subject matter is environmental. The cost of equipment is a consequence, not the nature of the external force. Public opinion may have influenced the law, but the compulsion comes from legal requirements.
Did you get it right without looking?
One question tells you little. A timed set on Environmental and sustainability factors shows your real accuracy, how long you take and where you lose marks.
More Environmental and sustainability factors questions
- Which of the following is the most widely quoted definition of sustainable development, as set out in the Brundtland Report?
- Powergen Co adopts a sustainability strategy only after investors with high power and high interest threaten to divest unless emissions fall…
- A manufacturer wants to check systematically whether its operations comply with environmental legislation and its own environmental policies…
- Which of the following is an example of a business taking a social sustainability action rather than an environmental one?
- A board adopts a sustainability strategy that goes beyond legal compliance, aiming to reduce emissions and treat this as a source of long-te…
- Zeta Ltd, a clothing manufacturer, switches to recycled fabrics, pays suppliers fair prices and invests in training local workers, while sti…