Environmental Issues That Affect Business

Companies commonly address CSR initiatives in corporate governance guidelines.

Jupiterimages/Pixland/Getty Images

Companies in the industrial or manufacturing industry often work with different kinds of equipment, machinery and chemical-producing agents. In effect, a business' day-to-day operations can pose an ongoing threat to the natural environment. To reduce the likelihood of damage to the environment, federal and state regulations require businesses consider certain natural environmental factors in their overall operations plans.

Environmental Regulations

Regulating business activities is one way government agencies protect the environment. Businesses must meet certain standards that help to reduce any adverse effects a company's activities have on the environment. As a result, natural environmental factors, such as clean water and clean air, dictate how companies conduct their day-to-day operations.

Permit Requirements

Companies involved in activities that impact their surrounding environment typically have to file for operating permits through a local, state or federal government agency. Business permit requirements enable government agencies to regulate and keep track of business activities. These permits serve different purposes, some of which include setting minimal standards for any air emissions, dictating certain procedures for handling waste and hazardous materials and regulating how a company's day-to-day operations interact with nearby water supplies. In effect, natural environmental factors determine the types of operations a company can engage in within a particular locale or region.

Compliance Requirements

Natural environmental factors affect a business' operations as well as its ability to expand or take on new operations. In effect, companies must comply with environmental regulations in all stages of a business' development. Companies considering purchasing a building should ensure the building conforms to environmental regulations or risk paying penalties for noncompliance. Building expansions must also meet regulatory requirements. Companies that have a record of noncompliance may risk having their operations shut down on a permanent basis. Ultimately, natural environmental factors affect a company's overall costs in terms of ensuring equipment and procedures meet regulatory requirements.

Environmental Contaminants

Businesses that work with hazardous materials on a regular basis have certain responsibilities when it comes to ensuring contaminants don't reach or affect the natural environment. The Comprehensive Environmental Response, Compensation and Liability Act holds business owners liable for activities that contaminate surrounding air, soil or water supplies. This law even applies for new business owners who unknowingly purchase a contaminated site or purchase an operation that fails to meet compliance standards. Ultimately, owners, both old and new, must cover clean up costs as well as the costs of restoring a property to required environmental standards.