Environmental and Social Risks Can Endanger the Very Survival of an Organisation - Assignment Example

Environmental Debate Table of Contents Introduction 3 Task 3 Background to Changing Attitudes of the Public, Politicians and Businesses to the Environment since 1945 3 Brundtland Definition of ‘Sustainable Development’ 4 Evolving International and UK Policies to Sustainable Development since the Earth Summit of 1992 5 ‘Triple Bottom Line’ Approach to Sustainable Development 7 Task 2 8 Role of Stakeholders in Persuading Business to Adopt Policies That Consider Social and Environmental Matters 8 Explanation of How There May Be Cost Savings As A Result of Adopting an Environmentally Aware Approach 9 Advantages to a Business for Considering Environmental or Social Effects 11 Task 3 13 Conflict Arising From Customers Who Say That They Are Concerned About the Environmental or Social Aspects of a Product or Service, but Are Not Prepared To Pay a Premium 13 Shareholders’ Preparedness to Sacrifice Short Term Dividends for Developing Products or Services That Have Longer-Term Beneficial Social or Environmental Advantages 14 Collaboration with Pressure Groups That Seek To Change the Approach of the Business to Social and Environmental Matters 16 Task 4 17 Sources of Guidance Available To Help Businesses Improve Their Social and Environmental Performance 17 Appropriate Strategies for Management of Environmental Performance in Different Businesses 19 Approaches to Environmental Life Cycle Assessment and the Use of the Results in Product Labelling 20 Conclusion 22 References 23 Introduction In comparison with other public issues, environment is constantly rated of fairly low national significance. However, in recent years, the concern for environment among people has peaked due to several crucial aspects such as climate change and global warming among others. Presently, there lay strong sense among public concerning the fact that environment is a vital factor for ensuring a sustainable future and mitigating environmental related challenges. It is accepted by most individuals in commercial and public arenas that in order to sustain in this present day context, the existing patterns of behaviour should be changed. More informed and responsible decisions must be undertaken by public, politicians and businesses towards securing the environment. The key challenge is to influence individuals to make changes in lifestyle, which certainly can positively influence the environment at large (Ipsos, 2010). Task 1 Background to Changing Attitudes of the Public, Politicians and Businesses to the Environment since 1945 The changes in the attitudes towards environment are believed to be witnessed centuries ago as a reaction of massive industrialisation. In the aftershock of Second World War during the year 1945, the growth of nuclear age generated immense concern amid public and politicians for environmental damage due to fatal radioactivity. Furthermore, environmental efforts also gained new impetus in the year 1962 due to the rise in agricultural utilisation of artificial chemical. The global concern for healthy and sustainable utilisation of environmental resources has increased after the year 1972 at the time when United Nations summoned conference on protection of environment. In that event, about 19 ideologies had been represented by addressing the requirements to inspire and direct individuals for preservation and development of environment. The event placed basis for environmental schema, which should be followed by organisations for making greater sustainable development. In present times, a point has been reached where public, politicians and businesses have understood that there is need to shape the activities with more sensible care for better environmental outcome. People have understood that demonstrating ignorance and indifference attitudes can irreversibly harm the environment on which the very survival of human depends (The Lucknow Tribune Team, 2013). Brundtland Definition of ‘Sustainable Development’ In the year 1987, Brundtland Commission had issued a revolutionary report on environment namely ‘Our Common Future’, which introduced the notion of sustainable advancement towards public. According to Brundtland Commission, sustainable development is such an evolution, which satisfies the requirements of current generation without negotiating the competence of future generation. At a minimum, sustainable development states that activities of people and businesses must not jeopardise the environmental system, which supports life in the planet. In other words, sustainable development is the procedure of changing activities in terms of utilisation of resources, course of investment, alignment of technological improvement and organised change towards enhancing present and future possibility for fulfilling human requirements and ambitions. Basically, sustainable development necessitates conjunction between the three pillars of development namely economic improvement, social impartiality and environmental security. It is a visionary development paradigm and for past two decades, public, politicians and businesses have accepted sustainable development as a guiding principle for organisations. In the context of increased attention towards sustainability, Primark also have certain commitments to undertake business activities in ethical and responsible way so that it can impose less negative impact on the environment. As a responsible organisation, it is the duty of Primark to engage in such activities that can contribute to the development of future generation and improve the livelihood of people. Such responsibilities will certainly affect Primark in terms of production, maintenance, human resource management and other commercial activities (Drexhage & Murphy, 2010). Evolving International and UK Policies to Sustainable Development since the Earth Summit of 1992 Towards a sustainable prospect, the Earth Summit organised by the United Nations in the year 1992 also marked considerable milestone in the generation of awareness regarding environmental issues and placed basis for international progression towards sustainable development. The theoretical framework, which laid down by Brundtland report and Earth Summit has evolved over past twenty years. The idea of sustainable development has been quite beneficial in framing the approaches towards development and growth. Sustainable development has been transitioned from a disputed ideal to a thought, which enjoys extensive commendation by several multinational organisations, politicians, businesses and civil societies. Nearly every international organisation has accepted sustainable development as a guiding principle of business. These organisations also comprise World Bank, which confirmed that sustainable globalisation can improve the economy without compromising the care for environment and World Trade Organisation, which endeavours to make contribution in performing sustainable development activities through pursuit of free trade and elimination of trade obstructions. In the Millennium Summit of 2000, several global strategies on sustainable development had been adopted through eradication of poverty and hunger, accomplishment of worldwide primary education and development of international partnership for ensuring sustainability among others (Loewe, 2013). Sustainable development has gained importance in private segment in the form of corporate social responsibility (CSR). Several organisations have undertaken voluntary initiatives in order to ensure sustainable development such as international reporting initiatives, transparency initiatives and equator principles among others. Moreover, various international organisations have enhanced their scope and sophistication of participation in sustainability principles (Blair & Hitchcock, 2004). The policies concerning sustainable development are identified to be evolving as international authorities, environmentalists, public, businesses and politicians realising that natural resources that are regarded as gifts of environment are slowly becoming exhausted. UK, unlike other nations also strongly abide with the agreement of Earth Summit and stands as an example for undertaking sustainable development activities. A key proportion of sustainable development in the UK is driven in order to support the wellbeing of future generation. The local authorities of the UK provide a clear outline for mutual policymaking where initiatives have been directed towards communities for eradicating traditional barriers of policy generation. The central government of the UK has also changed their approach towards traditional decision-making procedure at large (Medhurst, 2001). In the UK, the establishment of Sustainable Development Commission (SDC) is regarded as a key movement towards recognising the importance of sustainable advancement. Furthermore, the scope to present new thoughts and challenges of sustainable development has been promoted by the introduction of Environmental Audit Select Committee and the Performance and Innovation Unit. Presently, the government of the UK has certain liabilities towards ensuring sustainable development and can play transformer role in interpreting strategic policy thoughts into practical policy suggestions that are to be applied at the local level (Medhurst, 2001). ‘Triple Bottom Line’ Approach to Sustainable Development Sustainable development necessitates wider approach to policy and specific criteria in order to evaluate the development. The ‘Triple Bottom Line’ (TBL) approach helps to evaluate how policy or organisational resource allocation meet the objectives of sustainable development. TBL is a framework, which incorporates three dimensions of business performance namely social performance, environmental performance and financial performance. This model differs from traditional reporting framework, as it comprises ecological as well as social criteria. According to this model, organisations must prepare three different bottom lines in order to measure the actual performance. The first bottom line is traditional evaluation of profit though calculating the revenue earned and the expenses incurred. The second bottom line is concerned with the aspect of people i.e. how socially accountable an organisation is during the business operations. The third bottom line is related with planet i.e. it measures how environmentally responsible an organisation is in terms of undertaking various business activities. Thus, in order to accomplish the objectives of sustainable development, the organisations need to combine these three aspects in different policy options. In this similar context, it can be stated that as a responsible organisation, Primark not only has the objective of increasing profits but also possess certain responsibilities towards its employees and commitment towards ensuring sustainable environmental practices such as minimisation of wastes, conservation of energy and minimisation of pollutant emission among others. Hence, in order to evaluate the true progress, Primark must comprise the elements such as costs of using natural resources, impact of its business activities on the environment, work dislocation and waste generation among others (Slaper & Hall, 2011). Task 2 Role of Stakeholders in Persuading Business to Adopt Policies That Consider Social and Environmental Matters Present organisations are called by different stakeholders not only to enhance the bottom line performance, but also to address the social and environmental problems. Social and environmental problems are often observed to be typically complex, indefinite and multi-scale in nature and they influence numerous actors of society. This necessitates transparent decision making, which is flexible to changing conditions and holds a variety of knowledge and values. In order to maintain as well as promote sustainability, stakeholders’ involvement is increasingly being sought and embedded in business. Extensive acceptance and promotion of stakeholder participation have been driven by growing public suspicion regarding business, increasing knowledge about social welfare and increasing attention in negative environmental aspects. In this context, it can be stated that the involvement of the stakeholders can enhance the trust of public and cogenerate knowledge (Reed, 2008). It is to be affirmed that the stakeholders play a decisive role in Primark in adopting along with implementing effective social and environmental policies. For instance, Agenda 21 of the Earth Summit has recognised that stakeholders can recognise the social and environmental issues along with their causes and impacts and therefore draw the attention of public and decision makers. First and foremost, stakeholders can play ‘alert’ role and serve as a link between public opinion and the organisation i.e. Primark. They spread knowledge, increase awareness and ensure media attention regarding the identified social and environmental issues. Thus, stakeholders help to put pressure on the management of Primark and the decision makers to implement effective social and environmental policies (Reed, 2008). Stakeholders also help in providing expertise and support for adopting policies by considering social and environmental matters. Basically, they often play a role of analysts by proposing new and original ideas to Primark in highly complex fields of business comprising social and environmental aspects. Stakeholders also contribute towards making extensive improvement in multifaceted social policies and environmental regulations. Stakeholders not only play a bigger role in highlighting the issues relating to social as well as environmental, but also aids in seeking solutions to such issues. Their knowledge and resources can make positive involvement to the design and formulation of practical solutions to social and environmental matters faced by Primark. The role played by stakeholders increasingly extend beyond providing alert and generating awareness, rather they also help to establish solutions and norms for making better social and environmental performance (Pallemaerts & Moreau, 2004). Explanation of How There May Be Cost Savings As A Result of Adopting an Environmentally Aware Approach Environmental responsibility of business is an important aspect for every organisation, which is required to be taken into concern for making broader sustainable development. Multinational organisations such as Primark with headquarter situated in developed nations naturally purchase raw materials and produce products in developing nations. The company face increased level of costs in comparison with local organisations in developing nations, partly due to compliance with high level of social and environmental standards along with the requirement for ensuring standard protection of stakeholders. Furthermore, sustainable development necessitates multinational organisations to adopt environmentally aware approach, which at certain times require incurring additional expenses due to spending extra capital, using additional resources and complying with regulatory norms (Hamadi & et. al., 2012). However, Primark can use several methods in order to minimise costs while adopting environmentally aware approach. The adoption of this particular approach must start with establishing green supply chain management system, which fits sustainability with the central business strategy. Establishing green business by redefining the objectives can help to innovate a sustainable business model. In order to minimise expenses, there is need to review every aspect of business procedure where environmental expenses occur. Thus, a special team can be employed by Primark in order to recognise these problems and to determine the strategies for yielding cost saving and at the same time minimising negative environmental impact. After evaluating the advantages, there is the need to implement such process, which can correct the problem areas in the overall organisational system (Delmas & Toffel, 2003). In order to ensure cost effectiveness, the production procedure can be made more effective by generating low amount of waste. It can be affirmed in this similar concern that low level of wastes can lessen the environmental footprint while enhancing the product quality. Furthermore, cost-efficiency can also be gained by manufacturing similar amount of products by utilising less floor space (Delmas & Toffel, 2003). Primark can also minimise the expenses through reducing power consumption in its office. Use of renewable energy sources would also help to minimise cost while protecting the environment. Identifiably, recent innovations have been viewed to enhance the effectiveness of the machineries that consume less energy. Such eco-friendly machines can reduce the expenses by performing in most effective way. Apart from these, collaborating with such suppliers who possess better environmental performance and implementing environment friendly raw materials fully among others are certain business practices that can ensure cost savings while adopting environmentally aware approach. With the increased level of pressures arising from different stakeholders, it can be stated that adopting environmentally aware approach has become a necessity for Primark rather than a choice (Lyons, 2001). Advantages to a Business for Considering Environmental or Social Effects There are several reasons for which organisations need to consider the environmental as well as social effects impacting their respective businesses in a favourable or un favourable way. These have been discussed in the following. Reduction of expenses: Businesses that have devoted considerable efforts and money for developing environmental performance can convey cost savings by increased operational effectiveness and product innovation. Furthermore, increased environmental performance can also help to ensure access to discounted capital since market believes such capital as less risky (NBS, 2011). React to the demand of stakeholders: Stakeholders, most importantly the investors closely observe the environmental performance of organisations. The investors are highly aware that organisations, which administer the environmental effects carefully, are best positioned in the business market and can gain higher advantages from strategic prospects. A key example is disclosure of environmental performance report. Considerable number of organisations in various nations willingly discloses their performance on carbon emission and progress on climate change problem. This type of information assists investors to make better decisions and also to identify organisations with robust environmental performance. Thus, considering environmental effects of business can provide benefit to organisations by attracting more investors (NBS, 2011). Simplify regulatory supports and alleviate operational threats: Any kind of adverse environmental effect can result in delayed financing and regulatory authorisations that might costs higher to an organisation. As new environmental problems arrive to the forefront, regulators will discover alternatives for regulating the effect of business activities on key environmental aspects such as air pollution and water pollution. For example, in the year 2009, the US Environmental protection Agency registered carbon-di-oxide as a threat for human health and thus paved the method for extra regulations. When new regulations are enacted, organisations that lag behind in terms of environmental performance confront considerable expenses to catch up with the new regulations and thus there lays the possibility of experiencing fines or penalties if failed to do so. Thus, considering environmental effect to business can help organisations to better comply with regulators and also minimise the risk of expenses imposed for noncompliance (NBS, 2011). Recruitment of best employee: In present days, several talented employees observe social and environmental responsibilities as vital criteria for selecting organisations to work for. Thus, in order to attract talented employees, only appealing words are insufficient. Organisations also require delivering appropriate information regarding the environmental effects of their business activities to the public (NBS, 2011). Satisfying customers’ requirements: The requirements for green products have increased considerably in recent days with increased attention towards various environmental problems. In future, customers will pay more attention towards organisations that generate products in environmentally and socially responsible manner. Most importantly, organisations can face bad reputation in the market if customers find that their business activities are unsustainable. Thus, considering environmental effects to business can also help to attract more customers and can develop a positive brand image in the market (NBS, 2011). Task 3 Conflict Arising From Customers Who Say That They Are Concerned About the Environmental or Social Aspects of a Product or Service, but Are Not Prepared To Pay a Premium Over years, concerns regarding society and environment are evident amid environmentally conscious people. Organisations belonging to this modern day context have realised that their activities have direct influence on several environmental and social problems and thus consider these aspects with utmost importance. However, it is worth mentioning that although organisations are ramping up the business efforts to protect the environment and regulators are prepared for establishing new guidelines to direct them, several customers are not providing much attention as such efforts and initiatives result in increased level of costs. Several customers express that they are willing to pay more for socially and environmentally superior products, but during the time of purchasing, they rarely seek for such products (Unruh, 2011). Basically, willingness of customers to pay for environmental friendly products is determined by the factors like perceived advantages and products group. For instance, while purchasing food products, most customers are highly concerned about food safety and quality, on the other hand, while purchasing vehicles, customers are highly concerned about payback time. The study of Laroche & et. al. (2001) found that customers with high or medium income group are more probably acts in ecological friendly way, mostly because of possessing high level of education and increased sensitivity towards social and environmental problems. However, the study of Radam & et. al., (2010) observed that customers are highly fragmented with respect to the level of willingness to pay premium for environmental and social aspects of products. Conflicting outcomes have been found where most researchers claim that married female and young customer segment are the ones who are highly willing to pay premium price for environmental friendly products. Haider & Tahir (2014) mentioned three aspects that affect the purchasing pattern of customers namely satisfaction, values and identification. In this context, it can be stated that the aspect of satisfaction is not matched with environmental and social friendly products due to high price. However, customers having high social or environmental value can result in involvement with environmentally suitable action. On the other hand, identification also regarded as an essential aspect, which results in social and environmental friendly purchasing behaviour. Drozdenko & et. al., (2011) described that there are various psychological characteristics among customers such as status, principles, morals, norms, habits and individual abilities that determine their adoption of environmental and social friendly products. Shareholders’ Preparedness to Sacrifice Short Term Dividends for Developing Products or Services That Have Longer-Term Beneficial Social or Environmental Advantages Where organisational leaders and government officials are concentrating more on the idea of gaining social and environmental advantages, the central issue lays in the preparation of the shareholders towards supporting such idea. It is agreed that organisations must comply with environmental and social aspects, but beyond such compliance, there lays a key question concerning the willingness of the shareholders towards sacrificing profits in terms of short-term dividends due to gaining environmental and social advantages. The question about sacrificing profit in social and environmental interest applies beyond the usual business sphere (Reinhardt & et. al., 2008). The predominant interpretation of most economists regarding role of organisations is that organisations have fiduciary responsibility to enhance profits of shareholders. However, the judicial aspect also leaves room for the possibility that organisations can sacrifice profits for social and environmental interests. In accordance with the theory of ‘shareholder primacy’, organisations are regarded as legal agreements between the suppliers of several factors of production, who agree to work together in order to generate monetary returns while conforming to the basic rules of society and environment. On the other hand, shareholders in any business accept the financial risks in order to obtain profit, but they do not possess prescribed assurance of a fixed payment of dividend in return of organisational activities. Thus, it can be stated that the legal structure of business permit organisations to pursue activities of social and environmental good. However, there are certain conditions that can facilitate shareholders to support production of such products or services, which deliver social and environmental advantages (Reinhardt & et. al., 2008). The first condition is obligation of regulatory constrictions, which makes the necessity for the organisations to commence certain socially and environmentally beneficial activities. The second condition is that if such beneficiary activities can minimise organisational business expenses in the long run such as installation of power saving technologies that can compensate upfront expenses. Third condition is the possibility to yield increased income due to social and environmental beneficial activities. For example, products made from environmental friendly products can generate goodwill and consequently enhance the reputation in the market. Fifth condition is that organisations can decide to go beyond compliance with environmental standards in order to enhance their position for future regulatory requirements (Reinhardt & et. al., 2008). The shareholders can be motivated for voluntary profit sacrificing by the aforementioned conditions or by self-interest. However, the shareholders who are willing to accept low return of dividends may also subjected to determine whether the organisations already enjoy strong financial position, which can permit to obtain significant profits such as in the case of natural monopoly condition, performing in niche market segment. In such circumstance, even if shareholders sacrifice short-term dividend, they can still earn sufficient returns above the market standards (Reinhardt & et. al., 2008). The preparedness of shareholders to sacrifice dividend is also subjected to the level of profit making risks in the organisations. Shareholders with large shareholding are more probably to take increased curiosity in organisational activities and capable of influencing actions towards the beneficiary of social and environmental advantages. Furthermore, the existence of ethical investors also facilitates sacrifice of short-term dividends and makes organisations to adopt more socially liable and environmental friendly practices (Reinhardt & et. al., 2008). Collaboration with Pressure Groups That Seek To Change the Approach of the Business to Social and Environmental Matters Pressure groups can assist organisations to make changes in the method of business and influence decision-making activities within management authorities. The pressure for obliging social and environmental responsibilities arrive from two sources namely internal pressure groups and external pressure groups. The internal pressure group comprise employee union and board. They can pressurise organisations to reduce the negative influence of business operations to the society and the environment. On the other hand, external pressure group comprises regulators and several NGOs such as World Wildlife Fund (WWF) or International Monetary Fund (IMF) among others. These pressure groups seek to ensure that organisations are performing in ethically and sustainable manner. Thus, collaborating with these pressure groups are vital for gaining prosperous and stable support from society and to accomplish success in the long-run (Crane, 2000). Task 4 Sources of Guidance Available To Help Businesses Improve Their Social and Environmental Performance There are several sources that assist in improving the social and environmental performance of organisations. By providing representative framework, these sources provide guidance for businesses to deal with social and environmental issues. A few of the important sources of guidance available to the businesses in the UK have been described below. The Environment Agency: The Environment Agency is a key governmental unit in the UK, which intends to safeguard the environment in England and wales. This unit helps to ensure that air, land and water are watched over by every organisation in the society so that future generation receives a clean and better world. The key activities of The Environment Agency comprise dealing with drowning and polluting events, minimising business impact on environment, cleaning up rivers, seaside areas and polluted area and enhancing wildlife environments. It provides up-to-date information and assists in developing observational tools and techniques in order to manage natural resources effectively (Hudson-Edwards & et. al., 2008). Envirowise: Envirowise is a government program, which is committed towards supporting organisations to become more competitive and cost-effective by curtailing wastes. It provides independent and private guidance on useful means of increasing profits through reducing wastes. Furthermore, it also helps in understanding key environmental regulations that have certain influence on business (Crown, 2006). The Carbon Trust: The Carbon Trust is an independent public non-profit organisation, which assist businesses to take lead role in utilising low carbon emission technology comprising energy efficient as well as low carbon provision tools. The objective of this organisation is to support businesses by minimising carbon impact through providing subsidy, encouraging technological innovation and facilitating effective commercial practices. The organisation operates in a series of initiatives for guiding businesses in the subject matters like Low carbon Innovation Programme, Action Energy and Enhanced Capital Allowance Scheme among others (Fan Manufacturers Association, 2003). Energy Saving Trust: Energy Saving Trust is a social and charitable organisation. It provides independent guidance to businesses regarding reduction of carbon emission, better utilisation of water and cost minimisation on energy bill. Energy Saving Trust was the first practical channel, providing the facility of free energy efficiency guidance in Wales. The important activities of this trust comprise management of various governmental programmes, evaluation of low-carbon technology, certification of businesses and products and development of innovative tools (Energy Saving Trust, 2014). Appropriate Strategies for Management of Environmental Performance in Different Businesses In the field of environment, multinational organisations require to make appropriate strategic decisions that can set appropriate direction for making effective corporate environmental performance. Based on differentiation and competitiveness, organisations have four strategic alternatives on environmental performance namely eco-efficiency, environmental cost leadership, beyond compliance leadership and eco-branding. These have been discussed in the following. Eco-efficiency: In general terms, eco-efficiency strategies can generate certain degree of saving in almost every organisation. Such strategies can enhance resource productivity in an organisation through minimisation of waste and reduction of power consumption among others. Eco-efficiency strategies have great possibility to generate competitive advantage for those organisations that face relatively increased level of processing expenses (Orsato, 2006). Beyond Compliance Leadership: There are several organisations that not only desire to increase the effectiveness of the operational procedures, but also want that the customers and the general public acknowledge their activities. The activities that fall under this strategy i.e. beyond compliance leadership fundamentally comprise spending additional fund for implementation of Environment Management System (EMS), subscribing to international code of environmental management, implementing ISO 140001 certification and investing in developing voluntary environmental performance among others. Beyond compliance leadership strategy, the above discussed attributes often impose indirect impact on the reputation of organisations and also in the purchasing behaviour of the customers (Orsato, 2006). Eco-Branding: Eco-branding is used in order to differentiate product or services of an organisation. In general, organisations can only differentiate their products at the time when they deliver something unique and valuable for customers beyond simple offerings. Thus, eco-branding strategy allow organisations to differentiate their broad array of products by using environment friendly materials in business, implementing eco-friendly labelling, engaging with suppliers having strong environmental performance and utilising such equipment and machineries that consume less energy or generate less carbon footprint among others. However, in order to successfully utilise this strategy, three conditions should be met. First, customers must be willing to pay premium prices. Second, trustworthy information must be provided regarding the environmental performance. Third, imitation of such products or services might prove to be hard for the competitors (Orsato, 2006). Environmental Cost Leadership: Obtaining cost leadership for ecologically based products is a key strategic objective for most of the organisations. Environmental cost leadership strategy is undertaken wherein organisations compete in both aspects such as price and environmental performance. Activities for environmental cost leadership strategy comprise radical product innovation through research and development, material replacement and dematerialisation along with business process development among others (Orsato, 2006). Approaches to Environmental Life Cycle Assessment and the Use of the Results in Product Labelling Life cycle assessment (LCA) is a methodology for assessing the environmental impact of a product or activity by evaluating its entire life cycle. LCA is potentially used in environmental labelling. There are various approaches of LCA namely German Sustainable Building Certificate (DGNB), Leadership and Energy Environmental Design (LEED) and German ‘Blue Angel’ among others. The objective of DGNB is to establish a sustainable system for building accreditation based on European Standards for ecological building with increased focus on ecosystem, economy, socio-cultural and functional matters (Schmidt, 2012). Another key approach for LCA is LEED. LEED comprises a set of rating system for designing, constructing and maintaining operation of building. This system is structured into five key categories namely sustainable locations, water usage effectiveness, energy usage effectiveness, usefulness of materials and resource usage and interior environmental quality (Schmidt, 2012). The German ‘Blue Angel’ program is another popular approach for LCA. It provides above 75 principles of assessment and most of them concentrate on the characteristics of product category. The outcome of this LCA is used for describing the scope of product class with respect to use of hazardous materials, noise creation, waste reduction, resource preservation, appropriateness for use and safety. Moreover, the outcome of LCA is also used for development of products wherein there lays the requirement of obtaining numerical information for describing the influence of competing ingredients and materials on the environment (Lynch, 1993). Conclusion In this present day context, environmental and social risks can endanger the very survival of an organisation. Furthermore, environmental and social risks can also result in negative publicity, delay production and business operation, generate threat to operating license and ultimately can lead to substantial unanticipated expenditures. On the other hand, increase in the environmental and social performance can provide several advantages to an organisation in terms of cost reduction, legal compliance, competitive advantage and positive reputation among others. Thus, by considering these aspects, it is vital for Primark to invest in funds in order to manage these risks for improved business performance over time. This would certainly help in minimising Primark’s exposure to environment and social risks along with reaping unforeseen business opportunities. 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