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

A manufacturer replaces a polluting production process with a cleaner one. The change reduces waste disposal costs and improves its reputation, but requires large initial investment. Which statement best describes how this relates to the triple bottom line?

Cleaner production can support long-term economic performance as well as the environment. Lower waste costs and a better reputation may offset the initial investment, showing that the planet and profit elements of the triple bottom line can be reconciled.

  1. AIt shows that the planet and profit elements can never be reconciled
  2. BIt shows that environmental improvement may also support long-term economic performanceCorrect
  3. CIt affects only the people element, since reputation is a social matter
  4. DIt is irrelevant, as the triple bottom line concerns only financial reporting

Explanation

The framework encourages managers to see that environmental actions can bring cost savings and reputational benefits, supporting long-term profit. It does not say the elements cannot be reconciled, and the change clearly involves the planet and profit dimensions, not just people.

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