6.1 External Influences – Environmental
Why Environmental Audits Matter
Imagine a business as a garden 🌱. Just like a garden needs good soil, water, and sunlight, a business needs a healthy environment to thrive. An environmental audit is the gardener’s checklist that checks soil quality, water usage, and pest control to keep the garden healthy.
Key Components of an Environmental Audit
- Energy consumption – How much electricity, gas, or fuel does the business use?
- Water usage – How much water is consumed and how is it treated?
- Waste management – What types of waste are produced and how are they disposed of?
- Emissions – CO₂, NOₓ, and other pollutants released into the air.
- Compliance – Are local and international environmental laws being met?
Steps to Conduct an Environmental Audit
- Define the scope – Decide which parts of the business (e.g., manufacturing, logistics) will be audited.
- Collect data – Gather energy bills, water meters, waste logs, and emission reports.
- Analyse performance – Compare data against benchmarks or standards.
- Identify improvement opportunities – Pinpoint where changes can reduce impact.
- Report findings – Create a clear, visual report for stakeholders.
- Implement action plans – Set targets and timelines.
- Monitor progress – Re‑audit regularly to track improvements.
Example: Carbon Footprint Calculation
Suppose a factory uses 10,000 kWh of electricity in a year. If the emission factor for electricity is 0.5 kg CO₂ per kWh, the annual CO₂ emissions are:
\$CO_2 = 10,000 \, \text{kWh} \times 0.5 \, \frac{\text{kg}}{\text{kWh}} = 5,000 \, \text{kg}\$
Stakeholder Benefits
- Customers – Gain trust by showing commitment to sustainability.
- Investors – Lower risk and potential tax incentives.
- Employees – Pride in working for an eco‑friendly company.
- Regulators – Easier compliance and fewer penalties.
Exam Tip Box
Exam Tip: When answering “How can a business use an environmental audit?” – structure your answer with definition, steps, benefits, and an example. Use bullet points or numbered lists to show clarity.
Audit Checklist Table
| Area | Key Questions | Data Sources |
|---|
| Energy | How much electricity is used? | Electricity bills, sub‑meter readings |
| Water | What volume of water is consumed? | Water meter logs, invoices |
| Waste | What types of waste are produced? | Waste disposal receipts, segregation logs |
| Emissions | What pollutants are emitted? | Emission monitoring reports, supplier data |
| Compliance | Are all regulations met? | Legal documents, audit certificates |
Quick Recap – Flashcards
- Definition: A systematic review of a business’s environmental performance.
- Purpose: Identify risks, improve efficiency, and satisfy stakeholders.
- Key Steps: Scope → Data → Analyse → Improve → Report → Implement → Monitor.
- Stakeholder Impact: Customers, investors, employees, regulators.
Final Exam Tip
Remember: Use the STAR method – Situation (audit scope), Task (data collection), Action (analysis & improvement), Result (benefits & compliance). This shows a logical flow and helps you hit all exam criteria.