solution finder

19 June 2018

Environmental Factors

Author/Compiled by
Andrea Pain (seecon international gmbh)

Adapted from GILLESPIE (2011)

Environmental factors include the weather and climate change. Changes in temperature can impact on many industries including farming, tourism and insurance. With major climate changes occurring due to global warming and with greater environmental awareness this external factor is becoming a significant issue for firms to consider. The growing desire to protect the environment is having an impact on many industries such as the travel and transportation industries (for example, more taxes being placed on air travel and the success of hybrid cars) and the general move towards more environmentally friendly products and processes is affecting demand patterns and creating business opportunities.

For businesses in water and sanitation, environmental conditions in your area can have a large influence on your external environment:

  • Water availability and sources: The global water cycle influences precipitation patterns, the water availability in your area, as well as what water sources are predominant. For instance, in areas with high amounts of rainfall, precipitation may be a major water source (read about rainwater harvesting), while dryer areas may rely on invalid link or groundwater sources to fulfil their needs. Seasonal changes in the water cycle may be important, for instance if there is a significant dry season where water scarcity may be an issue. Human water use also has a large impact on the water cycle, affecting the quantity and quality of water with heavy withdrawals and water pollution.
  • Water demand and use: The climate also influences water demand and use for agricultural activities, as well as for household consumption and industrial activities. In areas that face water scarcity due to climate, there may be increased economic and political incentive to use water more efficiently. For instance, in arid areas such as Jordan and Israel, there are opportunities for wide scale wastewater reuse for irrigation purposes (FARDOUS, 2006). Other countries, like Australia, have dealt with water scarcity by investing in large awareness raising campaigns to decrease household water use by promoting water saving appliances, reducing household water use, and reusing greywater at home (read more in reuse of wastewater at home).
  • Nutrient availability and use: Apart from water and climatic conditions, environmental conditions influence nutrient dynamics (see the nutrient cycle). For example, regional soil types can have a large impact on water needs in agriculture as well as nutrient additions required (read about soil water conservation and reuse of nutrients in agriculture). Soil conditions can influence agricultural practices, intensity, and agricultural productivity. While there are many practices to conserve soil (e.g. conservation tillage or soil cover and reforestation) soil degradation is a major concern for long-term food security. Efficient use and reuse of nutrients in agriculture is also a growing concern, as the environmental and economic effects of water pollution due to nutrient runoff and limited phosphorus resources (see peak phosphorus) become more apparent.

Looking toward the future, as the effects of climate change become more pronounced, the associated impacts of water and food scarcity will also intensify. You should keep an eye on changes in public perception and political interest in issues like climate change, peak phosphorous, and soil degradation to take advantage of the growing opportunities for your start-up to make a positive impact on your community.

Library References

Foundations of Economics

This document provides information on PESTEL analysis, directing readers to the key factors for each step scanning the external environment.

GILLESPIE, A. (2011): Foundations of Economics. Additional chapter on Business Strategy. Oxford: Oxford University Press URL [Accessed: 06.01.2013]
Further Readings

Doing Environmental Scanning

This guide provides you with an overview of doing environmental scanning in your organisation. The aim is to allow you to build an understanding of the environmental scanning process and what is involved.

CONWAY, M. (2009): Doing Environmental Scanning. An Overview Guide. Hotham Hill, Australia: Thinking Futures URL [Accessed: 22.08.2012]

Environmental scanning

This web article contains a thorough list of references regarding environmental scanning, as well as concepts and theories developed in the last decades. It also contains an interesting analysis of the external environment of Higher Education, which could be used for those planning starting up a business in the training sector of water and sanitation.

MORRISON, J.L. (1992): Environmental scanning. In: WHITELY, M.A. ; PORTER, J.D. ; FENSKE, R.H. (1992): A primer for new institutional researchers. Tallahassee, Florida: 86-99. URL [Accessed: 22.08.2012]

Sick Water? The central role of wastewater management in sustainable development

This book not only identifies the threats to human and ecological health that water pollution has and highlights the consequences of inaction, but also presents opportunities, where appropriate policy and management responses over the short and longer term can trigger employment, support livelihoods, boost public and ecosystem health and contribute to more intelligent water management.

CORCORAN, E. ; NELLEMANN, C. ; BAKER, E. ; BOS, R. ; OSBORN, D. ; SAVELLI, H. (2010): Sick Water? The central role of wastewater management in sustainable development. A Rapid Response Assessment. United Nations Environment Programme (UNEP), UN-HABITAT, GRID-Arendal URL [Accessed: 05.05.2010] PDF

Climate Change, Water and Food Security

This publication first summarises the challenges facing agriculture and water without climate change. It then considers the broad and more specific impacts of climate change in different regions of the world, and looks at the options for adaptation and mitigation in some detail. It attempts to reach a practical focus without excessive generalisation.

TURRAL, H. BURKE, J. FAURE, J.M. (2011): Climate Change, Water and Food Security . (= FAO Water Reports , 36 ). Rome: Food and Agriculture Organization of the United Nations (FAO)

The Earth’s Natural Water Cycles

This chapter of the third world water development report is dedicated entirely to the water cycle, containing detailed information on water availability, water distributions, and the impact of climate change.

VOROSMARTY, C. J. (2009): The Earth’s Natural Water Cycles. In: World Water Assessment Programme WWAP The United Nations World Water Development Report 3: Water in a Changing World: , 166-180. URL [Accessed: 17.04.2012]

Summary and policy implications Vision 2030: the resilience of water supply and sanitation in the face of climate change

The Vision 2030 study aims to increase our understanding of how anticipated climate change may affect drinking water and sanitation systems and what can be done to optimize resilience of infrastructure and services.

WHO (2009): Summary and policy implications Vision 2030: the resilience of water supply and sanitation in the face of climate change. Geneva: World Health Organisation (WHO) URL [Accessed: 21.04.2012]

Alternative Versions to