Should a business do the right thing even when it costs money?
The meaning of business ethics and environmental responsibility, examples of ethical and unethical behaviour, the effect of environmental and ethical considerations on costs, sales and reputation, and the trade-off with profit.
A focused answer to AQA GCSE Business 3.2.2, covering business ethics, environmental responsibility, examples of ethical and unethical behaviour, and the trade-off between doing the right thing and profit.
Reviewed by: AI editorial process; not yet individually human-reviewed
Have a quick question? Jump to the Q&A page
Jump to a section
What this dot point is asking
AQA wants you to explain what business ethics and environmental responsibility mean, give examples of ethical and unethical behaviour, and explain how acting responsibly affects costs, sales, reputation and the trade-off with profit.
Business ethics
Examples of ethical behaviour include paying suppliers fairly, using Fairtrade ingredients, treating staff well and being honest in advertising. Unethical behaviour includes using child labour, misleading customers or paying very low wages to cut costs. The crucial distinction AQA tests is that ethics goes beyond the law: an action can be perfectly legal but still widely seen as wrong, such as paying overseas workers a legal but very low wage in poor conditions. Businesses face ethical choices constantly, because the cheapest option (a low-cost supplier, a misleading advert, dumping waste) is often the least ethical, so acting ethically usually means accepting a higher cost or a lower short-term profit in exchange for protecting reputation and trust.
Environmental responsibility
Effects on the business
Acting ethically and protecting the environment has both costs and benefits.
The key idea is the trade-off: doing the right thing often costs more now but can pay off through higher sales and a stronger brand later. The balance has shifted over time, because customers, employees and pressure groups now scrutinise businesses far more closely, and social media spreads news of bad behaviour instantly. As a result, the reputational reward for acting ethically (and the reputational punishment for being caught behaving badly) has grown, so the long-term commercial case for ethics and sustainability is stronger than it once was. A strong evaluation answer weighs the immediate cost against this longer-term reputational and sales effect.
Try this
Q1. State one example of unethical business behaviour. [1 mark]
- Cue. For example, using child labour or misleading advertising.
Q2. Explain one benefit to a business of acting in an environmentally responsible way. [2 marks]
- Cue. A better reputation that attracts more customers and increases sales.
Exam-style practice questions
Practice questions written in the style of AQA exam questions on this dot point, with worked answer explainers. The year tag is the paper they imitate, not the source.
AQA 20183 marksExplain one way that acting in an environmentally responsible way could increase a coffee chain's costs. (Paper 2, Section B)Show worked answer →
A 3-mark explain question: one cost developed through a chain.
Switching to environmentally responsible practices, such as compostable cups and ethically sourced beans, usually means paying more for materials than cheaper, less sustainable alternatives. The consequence is higher production costs per drink, which squeezes the profit margin unless the chain raises its prices.
Markers reward one clear cost (greener materials, recycling systems, sustainable sourcing) linked to higher costs and the effect on profit. A bare statement that it costs more caps at one mark.
AQA 20219 marksA clothing manufacturer can cut its costs by using a cheaper overseas supplier known for poor working conditions. Evaluate whether the manufacturer should use this supplier. (Paper 2, Section C)Show worked answer →
A 9-mark evaluate question: argue both sides, apply, and judge.
Case for using the supplier: lower costs widen the profit margin or allow lower prices, helping the manufacturer compete, which matters in a price-sensitive clothing market.
Case against: using a supplier with poor working conditions is unethical and risks serious reputational damage if exposed, as customers and pressure groups increasingly boycott brands linked to exploitation, which could lose far more sales than the cost saving gains. A developed judgement weighs the short-term cost saving against the long-term reputational and ethical risk, and concludes that the manufacturer should avoid the supplier (or insist on improved conditions) because the reputational downside outweighs the saving, especially as consumers grow more ethically aware. Markers reward a two-sided argument with a justified conclusion applied to the manufacturer.
Related dot points
- The main types of technology used in business (e-commerce, digital communication, social media and automation), and the benefits and drawbacks of technology for sales, costs, marketing and the way a business is run.
A focused answer to AQA GCSE Business 3.2.1, covering e-commerce, digital communication, social media and automation, and the benefits and drawbacks of technology for sales, costs and marketing.
- The effect of the economic climate on business, including unemployment, changing levels of consumer income, inflation, changes in interest rates, government taxation, changes in exchange rates and the impact on costs, sales and profit.
A focused answer to AQA GCSE Business 3.2.3, covering how unemployment, consumer income, inflation, interest rates, taxation and exchange rates affect a business's costs, sales and profit.
- The meaning of globalisation, the reasons it has grown, the opportunities it offers (new markets, cheaper resources, multinationals) and the threats it brings (more competition), and the role of tariffs and trade barriers.
A focused answer to AQA GCSE Business 3.2.4, covering the meaning of globalisation, why it has grown, the opportunities and threats it brings to UK businesses, and the role of tariffs and trade barriers.
- The purpose of legislation affecting business, the main areas of consumer law and employment law, the impact of complying with legislation on costs and decisions, and the consequences of breaking the law.
A focused answer to AQA GCSE Business 3.2.5, covering the purpose of business legislation, the main areas of consumer and employment law, the cost of compliance, and the consequences of breaking the law.
- The main internal and external stakeholders of a business, the different objectives and interests each group has, and how and why stakeholder interests can conflict.
A focused answer to AQA GCSE Business 3.1.4, covering the main internal and external stakeholders, the objectives each group has, and how and why stakeholder interests can conflict.
Sources & how we know this
- AQA GCSE Business (8132) specification — AQA (2017)