Environmental factors affecting businesses

A view of a city on a cloudy day
The world of business is full of opportunities for people who come to it in order to thrive. Factors such as an exceptional business idea, marketing tactics, customer service & engagement, evolving with the changing trends, etc. are no doubt, absolutely essential to consider to make your business successful. However, there are other factors as well that tend to affect how a business performs.

Consider your business as an entity having a specific place in the global marketplace. The day you launch your business, it is basically introduced into an environment where it has to prove itself and show its worth among other businesses. This environment is affected and controlled by several factors, and each factor has the tendency to impact the business. Therefore, a business environment has to be looked into deeply in order to really know what your business is getting into.

The environmental factors may be both internal – e.g. value system, policies, finances, etc. or they may be external – e.g. the economy, politics, technology, etc. When you as a business owner are aware of the factors that have a bearing on the performance of your business, you can devise better and more effective plans and strategies for its growth.
In this article, we will go through some environmental factors that affect businesses, with more focus on the external factors.

Environmental Policies

Environmental policies are an important external factor that affects the operations and strategies of a business. These policies are aimed to make businesses run in an eco-friendly way. While new businesses may be more accepting and considerate towards this aspect, it can come as quite a challenge for well-established businesses. This is because environmental policies require businesses to change their existing methodologies to comply with the standards. This may include changing equipment and various business operations, resulting in raised expenditures for the company.

Climatic Changes

Climatic changes can affect businesses on a much larger scale. This external factor can cause disruptions in the business functions on many levels. Climatic changes result in severe weather conditions and natural phenomena such as floods, heatwaves, storms, etc. which put businesses at risk of loss and damage. This can cause increased insurance costs for a lot of companies. Factors like global warming affecting the weather conditions can result in major hindrances in the availability of resources, thereby causing supply chain operations to slow down significantly. Transportation and other associated costs can also increase rapidly.


We all know the impact of pollution on human health. However, it is not just limited to the health aspect. Pollution affects the functioning of businesses as well. Researches have shown that supply chain operations can be disrupted and resources can fall short due to pollution. Many businesses require natural resources to operate, and increased pollution rates can adversely affect the reserves. Therefore, special attention should be paid to keep the shortages and disturbances under control.


Many new ventures are coming in with a ‘zero-waste’ ideology, whereby they aim to run their businesses in an environmentally friendly way. This is extremely necessary for the overall betterment of the economy as well. Zero-waste is not only good for the environment but also saves businesses from huge landfill charges for getting rid of the waste. For instance, a cleaning services business by the name of carpet cleaning Victoria can follow the zero-waste method to improve their budget allocation by cutting down their landfill tax.
Also, the very process of recycling can be converted to a form of generating income. Recycled goods in the form of paper, cardboard, and various other items can be sold, which is a great way to manage waste in a sustainable way.

The Green Agenda

The rise of environmental pollution over the years has finally led organizations to align their business strategies with environmental-supportive policies. The Green Agenda is a step towards this advancement. Following it, businesses make an effort to run their operations in a way so as to reduce their negative effects on the overall environment. These types of practices can prove to be highly beneficial for the entire ecosystem, and organizations need to work together and stay committed in order to achieve this goal.

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