Ethical & Environmental Considerations Practice Questions

Item A: Clearwater Soaps Ltd

Farah Qureshi is the owner of Clearwater Soaps Ltd, a private limited company based in Shropshire. The business makes handmade soap and employs 14 people. Each bar is sold to independent gift shops for £4.50. Clearwater Soaps Ltd has always used plastic-free cardboard packaging and tells customers on every box that it cares about the environment.

Farah has been offered a supply of fair trade shea butter from a co-operative of farmers in Ghana. The farmers are guaranteed a fair price for their crop. Farah's current supplier is a large UK wholesaler she has used for six years, and it will not tell her where its shea butter comes from. Two of the gift shops have recently asked Farah whether her soap is fair trade. Supermarkets sell similar looking bars of soap for £1.80.

Table 1: Ingredient cost of one bar of Clearwater soap

	Current ingredients	Fair trade ingredients
Ingredient cost per bar	£1.20	£1.56

Answer all parts of this question. There is no requirement to apply your knowledge to a particular business.

Item C: Westvale Furniture Ltd

Martin Ashby is the managing director of Westvale Furniture Ltd, a private limited company that makes wooden garden furniture. It employs 60 people at its factory in Devon and sells almost all of its furniture to garden centres. Martin pays every supplier within 14 days, which is faster than most of his competitors pay. Westvale delivers its furniture to garden centres in six diesel vans.

Westvale buys its hardwood from an overseas timber merchant. The merchant cannot prove that the forests it cuts down are replanted. Garden centres have started to ask Westvale where its wood comes from, and one large garden centre chain has announced it will only buy from businesses that use certified sustainable timber. Westvale sells 9 000 garden benches each year at a price of £75 each.

Item D: Westvale Furniture Ltd

Westvale wants to sell more furniture to garden centres. Martin is considering two options.

Option 1 – Buy all timber from certified sustainable forests
Every forest used would be replanted and each bench would carry a certification label. Table 2 shows the timber cost of one bench.

Table 2: Timber cost of one garden bench

	Current timber	Certified timber
Timber cost per bench	£48.00	£55.20

Option 2 – Replace the six diesel vans with electric vans
The six electric vans would cost £228 000 in total and would save Westvale £9 000 a year in fuel. Each van would be painted with the words 'Delivered by electric van'. The vans can travel 150 miles before they need recharging. Some of Westvale's garden centre customers are over 200 miles from the factory.

Item A: Oakdon Furniture Ltd

Helen Marsh is the managing director of Oakdon Furniture Ltd, a private limited company based in Shropshire. The business employs 24 people and makes solid wooden kitchen tables and chairs. It sells online and through six independent furniture shops. Each table is made from hardwood timber bought from a timber merchant, and Oakdon does not know which forests the timber comes from. Offcuts and sawdust are collected by a waste company and taken to landfill. The workshop is heated and lit using electricity from the national grid, and every table is finished with a chemical varnish. Finished furniture is delivered in three diesel vans, which together cover about 60 000 miles a year.

Customers buying online have begun to ask Helen where the wood comes from. Two of the six shops have told her they will only stock furniture made from timber that comes from forests where new trees are planted to replace those cut down.

Item B: Oakdon Furniture Ltd

Oakdon makes 1 200 tables a year. Helen wants the business to become more sustainable and is considering two options.

Option 1 – Buy timber from certified sustainable forests
A supplier in Scotland sells hardwood from forests where every tree cut down is replaced. The timber would cost £38 more per table. Oakdon could add a 'timber from replanted forests' label to every table and to its website. The chemical varnish and the landfill waste would not change.

Option 2 – Install solar panels on the workshop roof
Solar panels would cost £36 000 to install. They would generate about 60% of the electricity the workshop uses and cut its electricity bill by £8 400 a year. They generate least in winter, when the workshop needs the most heating and lighting, so Oakdon would still buy some electricity from the national grid.

Table 2: Year 1 figures for each option

	Option 1: certified timber	Option 2: solar panels
Extra cost in year 1	£45 600	£36 000
Saving in year 1	£0	£8 400
Change seen by customers	Label on every table	Panels on the workshop roof only

Item A: Verda Drinks plc

Verda Drinks plc makes fruit smoothies and sells 1.2 million bottles a week to supermarkets across Europe. It became a public limited company in 2021 and its shareholders expect a dividend every year. Last year Verda made a net profit of £6.8 million.

Every smoothie is sold in a plastic bottle that costs Verda 4p. A pressure group, Clear Shores Action, has organised protests outside Verda's head office in Reading, claiming that fewer than half of the bottles are recycled. Two national newspapers reported the protest.

Verda's largest supermarket customer has told all of its suppliers that it wants plastic packaging reduced within three years.

Verda is considering two options:

• Option 1: replace the plastic bottles with bottles made from recycled glass, costing 11p each
• Option 2: pay for a national bottle return scheme, giving customers 10p back for every empty Verda bottle returned to a supermarket.