6.1 Ethical & Environmental Considerations Practice Questions

Text 2 – Oakhaven Furniture Ltd

Oakhaven Furniture Ltd makes handmade beds and wardrobes in a workshop in Carlisle. Its furniture is sold through 40 independent furniture shops across the north of England. The business is owned by Priya Nandra and employs 26 people.

Oakhaven Furniture Ltd buys its timber from 12 small sawmills. It agrees prices with each sawmill a year in advance, so that the sawmill owners know what income to expect, and it pays every invoice within 14 days.

In 2024 the business began buying only timber from forests certified as sustainably managed, where every tree that is felled is replaced. This raised the price Oakhaven Furniture Ltd pays per cubic metre of timber. Offcuts from the workshop are now turned into firewood and sold locally instead of being sent to landfill. Several of the shops Oakhaven Furniture Ltd supplies now ask for proof of where its timber comes from.

Table 1 – Financial information for Oakhaven Furniture Ltd

	2023	2024
Revenue	£1 450 000	£1 620 000
Cost of sales	£870 000	£1 020 000

Text 2 – Fellgate Furniture Ltd

Fellgate Furniture Ltd manufactures flat-pack bedroom furniture in batches at its factory in Durham. It employs 70 staff and sells through independent furniture shops and through its own website.

The owner, Colette Fairbairn, has set the business two sustainability objectives. First, all timber must come from certified sustainably managed forests by 2027. To achieve this, Fellgate Furniture Ltd has ended its contracts with two cheaper overseas timber suppliers and is still searching for approved replacements. Second, no factory waste should be sent to landfill. In 2023 the business replaced the polystyrene used to protect its furniture in transit with moulded recycled cardboard, which costs more but can be recycled by customers at home.

Some of the independent shops have complained that their deliveries have been late while new timber suppliers were being found.

Table 1

	2022	2023	2024
Packaging costs (£)	84 000	90 000	96 600
Factory waste sent to landfill (tonnes)	120	95	61

Mossfold Soaps Ltd

Farah Qureshi owns Mossfold Soaps Ltd, a private limited company in Shropshire. The business makes handmade soap and employs 14 people. Each bar is sold to independent gift shops for £4.50. Mossfold 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. 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.

Farah must decide whether to switch to the fair trade co-operative or keep her current UK wholesaler.

Table 1: Ingredient cost of one bar of Mossfold soap

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

Ashlowe Furniture Ltd

Philippa Rudd is the managing director of Ashlowe Furniture Ltd, which employs 24 people and makes 1200 solid wooden kitchen tables a year. It sells online and through six independent furniture shops. Ashlowe buys hardwood timber from a timber merchant and does not know which forests it comes from. Offcuts and sawdust go to landfill, every table is finished with a chemical varnish and furniture is delivered in three diesel vans.

Online customers have begun to ask where the wood comes from. Two of the six shops say they will only stock furniture made from timber from forests where new trees are planted to replace those cut down.

Philippa wants Ashlowe to become more sustainable and is considering two options.

Table 1: Ashlowe's two options

	Option 1: certified timber	Option 2: solar panels
What it involves	Buy hardwood from forests where every tree cut down is replaced; add a 'timber from replanted forests' label	Install solar panels on the workshop roof, generating about 60% of the workshop's electricity
Cost	£38 extra per table	£36 000 to install
Saving in year 1	none	£8400 off the electricity bill

Plumtide Drinks plc

Plumtide 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 Plumtide made a net profit of £6.8 million.

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

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

Plumtide is considering two options:

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