In many parts of the world the five elements of environment Sky, Water, Earth, Air and Fire are worshipped. This in itself is an explanation of the complex phenomena called planet Earth. Till such time the mankind nurtures the environment at micro level the world will exist. The understanding of these five elements of nature will help understand the laws of nature which will help mankind to achieve greater health and happiness of the living things on the earth.

GDP measures the monetary value of final goods and services that are bought by the consumers and government produced in a country in a given period of time. A serious question which many environmentalists think of is that why GDP does not account of environmental health. Why the GDP is not reduced by soil erosion, air and water pollution and even though natural resources are depleted, their economic value or costs are excluded in the GDP calculation.

In India the natural capital is poorly categorized in GDP; natural resources are not adequately considered as economic assets; the environmental costs of depletion and degradation of natural resources are not factored in while arriving at economic growth figures. Environmental pollution, water contamination and resource depletion are omitted.  Today, we have taken the mother nature for granted because the environmental wealth does not involve transactions. In fact, letting harmful waste of chemicals into water bodies, cigarette smoking, using chemicals and fertilizers for growing soil quality, selling arms for crime, selling party drugs to the rich and celebrities, are calculated in GDP because they generate spending and they show ‘growth’ of GDP.

The business minds are not bothered about the habitat degradation and biodiversity loss which are accelerating fast. Climate disruption is getting worse; we are witnessing more frequent and damaging forest fires, floods, droughts, cyclones and tsunamis. Oceans are heating because greenhouse gases trap more energy from the sun and the oceans are absorbing more heat, resulting in an increase in sea surface temperatures and rising sea level harming the coral reefs and sea life.

Due to water and air pollutions infant health is getting disrupted. Isolating a causal relationship between pollution and health is challenging for many reasons. First, measurement error in pollution levels reduces coefficients and makes a relationship difficult to detect. There are numerous pollutants, many of which are measured infrequently or not at all. A number of baffling elements cannot be ruled out in order to interpret a relationship between environmental quality and health as causal.

Economists term mother nature as a nonexcludable or ‘public good’, thus, the benefits of environmental quality accrue to all citizens. the costs of degradation are borne by entire society other than the polluters.  The atmosphere and open oceans are common property and nobody can be excluded from using them. Think of a smoking factory chimney pouring black soot onto surrounding houses, schools, hospitals etc. Here, the polluter has an economic incentive but what about the others who suffer?

In June 2022 a portion of Deepak Nitrite’s chemical manufacturing facility in Nandesari industrial area on the outskirts of Vadodara city in Gujarat was engulfed by a major fire. Seven workers had been hospitalised after inhaling smoke, while some 700 people living in the vicinity of the factory had to be shifted to safer places.  We never think about the negative effect borne by the whole neighbourhood.

In May 2016, a blast at Probace Enterprises, a chemicals factory in Dombivli MIDC, had claimed 12 lives and left over 100 injured. The impact was so strong that window panes of Abhinav Vidyalaya, a primary and secondary school nearly 100 metres away from the site of the explosion, were scattered.

Simple prudent fact: to care for humanity, we must care for nature. During the Corona pandemic when the world was locked in house, the mother nature bloomed. The world became a quieter place in the pandemic. Cars, two wheelers and trucks were off the streets, factories closed, offices closed, silent road the air and water pollution reduced drastically. Lots of birds and animals set out from deep woods. Mother nature bloomed.

The presidents of Colombia, Costa Rica and Switzerland, joined by ministers from a dozen other countries recently launched a “High Ambition Coalition for Nature and People”, aimed at persuading governments to agree on a global goal to preserve at least 30% of the planet’s lands and oceans by 2030.

Bhutan is the world’s first carbon negative country. Mainly because of its extensive forests, covering 70% of the land, the Kingdom is able to absorb more carbon dioxide than it produces.

We live in a globalized world where countries are increasingly integrated across a variety of dimension of PESTLE—political, economic, social, technological, legal and environmental. While globalization is often credited with increase in economic growth and GDP per capita, it is not without its discontents. Among these, we blindly ignore environmental issues like water and air pollution which sometimes extend beyond national borders to affect neighbouring countries. For example, few years back China’s very serious air pollution has hampered the neighbouring countries India, Pakistan, Nepal etc.  Middle East and North Africa’s (MENA) degraded sea and polluted air has bothered the neighbouring countries a lot. Its natural capital is degraded.

I conclude my thought-on GDP calculation: It does not include the environmental sustainability, the standard of health, happiness, security, and mental wellbeing of an individual, a group of people, or a nation.  Any outcome from economic activity that creates negative value for society, such as air and water pollution that harms human health and other living things health. The unsustainable economic growth is diminishing the quality of life.

A measure of a nation’s quality of life includes the income and output measured by gross domestic product. This measure subtracts out the costs of negative effects related to economic growth such as crime, environmental degradation, natural resource depletion, and the costs of climate change. Genuine Progress Indicator nets the positives and negatives of economic activity to provide a more accurate measure of a nation’s quality of life than GDP alone.

A PESTLE analysis (formerly known as PEST analysis) is a frame or a managerial tool in strategic management used to analyze and monitor the macro-environmental factors that may have a profound impact on an organization’s performance. This tool is especially useful when starting a new business or entering a foreign market. In PESTLE P stands for politics, E stands for Economics, S stands for Social, T stands for Technology, L stands for legal and the last E stands for Environment factors.

Politics

Spanish oil giant Repsol had to face a downsizing due to political intervention in Argentina.  It started an above average profitability operations in Argentina. But the business was later impounded by the Left Wing government. So the decade long profits didn’t materialize in the end. Certain factors create Inter-linkages in many ways. US-based Google had to deal with the Chinese government’s restrictions on the freedom of speech in order to do business in China. China’s different set of political and legal guidelines made Google choose to cease its mainland Chinese version of its site and direct mainland Chinese users to a Hong Kong version.

Political system is basically the system of politics and government in a country. It governs a complete set of rules, regulations, institutions, and attitudes. A main differentiator of political systems is each system’s philosophy on the rights of the individual and the group as well as the role of government. Each political system’s philosophy impacts the policies that govern the local economy and business environment. There are more than thirteen major types of government, each of which consists of multiple variations.

Political decisions affect the economic environment for example the taxation system in the country, political decisions influence the country’s socio-cultural environment for example the LGBT; few countries are gay friendly, while most are not. Politicians can influence the rate of emergence of new technologies, politicians can influence acceptance of new technologies. Political factors relate to how the government in a country mediates in the economy. Political factors are government regulations that influence business operation positively and negatively. Managers must keep a bird’s eye view over political factors. These factors can be current; they can be impending legislation, political stability and changes, freedom of speech, protection and discrimination laws etc. Political factors are inclusive of tax policies, labor law, environmental law, trade restrictions, tariffs and the most important of all political stability.

Economics

Nike has invested largely on their women’s footwear, clothes and equipments for women in Pakistan since the women are getting more liberal in Pakistan. Pakistan is already one of the primary suppliers for the Nike’s sports items. The rich Pakistanis are brand conscious and spend conspicuously on themselves.  Another good example of economic factor is of Coca-Cola operations in countries because of wages. Wages influence the company’s production costs; in countries like the UK they are quite high, whereas in Asian countries the salaries are low. Therefore, Coca Cola manufacturing is on higher side in Asian countries.

There are two great economic factors affecting business models they are demand and supply. Demand is how willing and able a consumer is to purchasing what a business offers and supply is how able the business is to make available what the consumer needs. Economic factors include economic growth, interest rates, exchange rates and inflation rates. These factors greatly affect how businesses operate and make decisions. For example, interest rates affect a firm’s cost of capital and therefore to what extent a business grows and expands. Exchange rates can affect the costs of exporting goods and the supply and price of imported goods in an economy.

Social

Because Pepsi is no-alcoholic drink, it has to maintain the strict differences in cultures around the world. It is essential for Pepsi to communicate its image as a global brand to change people’s perception. Pepsi values all the festivals in order to relate to their market.  Reacting to the social factor has helped Pepsi cash upon the opportunity of increasing sales during festive seasons around the world. Since June 1, 2011 a smoking ban in all of Argentina prohibits smoking in workplaces, all public indoor areas, schools, hospitals, museums and libraries, theatres, and all public transport. However, smoking is still allowed in balconies, terraces and patios. The law also included the prohibiting of advertising and sponsoring of tobacco. The fine for breaking the law is equivalent to 250 to 1,000,000 packets of the most expensive cigarettes in the market. Imagine, how cigarette companies could advertise in Argentina?

This measurement of the general environment represents the demographic characteristics, norms, customs and values of the population within which the organization operates. This includes population trends such as the population growth rate, age distribution, income distribution, career attitudes, safety emphasis, health consciousness, lifestyle attitudes and cultural barriers. These factors are especially important for marketers when targeting certain segments. It also includes the local workforce and its willingness to work under certain conditions.

Technology

Apple, Google, Blackberry and Microsoft have changed the information technology scene completely. Google is the most widely used search engine on the internet today. It receives over 3 billion online searches on a daily basis. It was created in 1997 by American computer scientists Larry Page and Sergey Brin.

Technological factors pertain to innovations in technology that may affect the operations of the industry and the market favorably or unfavorably. The progress in technology refers to technology incentives, the level of innovation, automation, research and development (R&D) activity, technological change and the amount of technological awareness that a market possesses. These factors may influence decisions to enter or not enter certain industries, to launch or not launch certain products or to outsource production activities abroad. By knowing what is going on technology-wise, the management of organizations may be able to prevent its company from spending a lot of money on developing a technology that would become obsolete very soon due to disruptive technological changes elsewhere. Technological Factors are linked to innovation in the industry, as well as innovation of the overall economy. Not being up to date to the latest trends of a particular industry can be extremely harmful to operations.

Legal

The foremost criteria include ease of starting a business, ease of obtaining construction permits, access to electrical utilities, ease of registering property, availability of credit, protection for minority investors, tax rates and collection methods, capacity for trade to occur across borders, and ease of enforcing contracts and declaring insolvency. Labor market regulation is also considered in compiling these rankings. It takes few hours to start a business in New Zealand. Thanks to a simple online procedure! High standards of living combined with one of the world’s most skilled labor forces are among the many factors that make Sweden an excellent country within which to carry out business and trade. Its strong infrastructure and well-developed social programs are strong incentives as well.

Although these factors may have some overlap with the political factors, they include more specific laws such as discrimination laws, antitrust laws, employment laws, consumer protection laws, copyright and patent laws, and health and safety laws. It is clear that companies need to know what is and what is not legal in order to trade successfully and ethically in a country.

Environment

Through 2011, Bhutan experienced accelerated economic activities pressured natural resources such as land, air, and water. Development activities increased urbanization, industrialization, mining and quarrying, agriculture, and solid waste management projects. Land degeneration, biodiversity and habitat loss, high fuel-wood consumption, and human-wildlife conflicts are some of Bhutan’s environmental challenges. Notwithstanding these problems, Bhutan remains overall carbon-neutral.

Environmental factors have come to the forefront recently. They have become important due to the increasing scarcity of raw materials, increased pollution and carbon footprint. Environmental factors include ecological and environmental aspects such as weather, climate, environmental offsets and climate change which may especially affect industries such as tourism, farming, agriculture and insurance. Furthermore, growing awareness of the potential impacts of climate change is affecting how companies operate and the products they offer. This has led to many companies getting more and more involved in Corporate Social Responsibilities (CSR) practices and sustainability.