Social costs and benefits

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Firms are now adopting objectives other than those based on profits, growth and shareholder value for a number of reasons:

- Laws on environmental protection have become stricter. To break such laws would lead to heavy fines and bad publicity for a comapny. This has led to many firms having environmental objectives.

- There is growing and widespread public support for action against dumping waste and climate change - one of the social costs of business activity. Businesses with clear environmental objectives often gain good publicity and consumer loyalty.

- Consumers are putting pressure on firms to be increasingly ethical. They are demanding more organic foods and low-polluting cars, and…


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