At business schools worldwide, topics on sustainability, climate risk and income inequality are popping up in MBA programs, with new content, certificates and research.
Laudable, say youth activists, sustainable business leaders and those tracking school performance, but still not good enough to equip tomorrow’s corporate leaders for purpose beyond profit.
“The pace of change is definitely not as fast as it should be given the climate crisis and the social crisis we are in, and the ambition is not high enough,” says Maxime Lakat, executive director of Re_Generation, a youth-led campaign for business schools and companies to incorporate human and ecological wellbeing in decision-making.
No less impatient is Mette Morsing, head of the United Nations Principles for Responsible Management Education, the largest global initiative on transforming leadership to address the UN’s 17 Sustainable Development Goals (SDGs). “We know what to do, but progress is slow,” says Morsing, whose organization was founded in 2007 and now has 880 business school signatories. “If you look at business school curriculum, it is still very much driven by an agenda set in another time.”
Including purpose, not just profit, means business schools must prepare a different kind of future corporate leader.
“We want [MBA students] to think not just about profit maximization, shareholder supremacy and short-termism,” says Morsing. “We want them to think long-term, because that is what business needs – to think stakeholder orientation and to think about society at the centre of the stakeholder model, not the corporation.”
As schools reimagine themselves, the corporate-sector response is sometimes paradoxical: eager for a new generation of sustainability leaders but not always translating that aspiration in job postings.
“There is a gap between what is being taught and a company’s human resources and talent acquisition department knowing what is being taught,” observes Bernt Blankholm, founder and chief executive officer of Highered, the career arm of the European Foundation for Management Development, a global business school network. “I wish the recruitment industry would pay better attention to what is being taught,” he says. Too often, he adds, chief executive commitments on sustainability fail to trickle down to job descriptions for operational positions at the firm.
That said, businesses are clearly keen for school curricula that embed sustainability in core courses.
“There is no CEO of a company tomorrow that cannot understand sustainability,” predicts Tim Moerman, sustainability and ESG director for global brewer Anheuser-Busch InBev in Europe. He argues that MBA students, no matter their focus (finance, marketing or supply chain), must be well-versed in carbon emissions, packaging and water, for example, and their social and environmental impact. “If business schools don’t provide these kinds of competencies, students will not have jobs,” he warns.
The pace of change is definitely not as fast as it should be given the climate crisis and the social crisis we are in, and the ambition is not high enough.
-Maxime Lakat, executive director of Re_Generation
Among schools reimagining their MBA programs (see 2022 Better World MBA Top 40 ranking), common patterns emerge: increasing integration of sustainability in core courses, research relevant to the SDGs, and expanded opportunities for students to work with underserved communities.
At the Berlin-based European School of Management and Technology (ESMT), a private non-profit business school, 26% of fulltime MBA content links to ethical, social and environmental issues, including relevant case studies, according to the school. Students can work on social-impact projects at the school’s FUTURE Institute for Sustainable Transformation. In a boon for research, ESMT this year announced industry-funded professorships in sustainable finance, accounting impact measurement, circular business, and energy markets and transition.
“Sustainability is something that is at the core of the survival of the competitiveness of the company,” says ESMT president Jôrg Rocholl. “[Sustainability] now is a fundamental part of the strategic development of a company relating to all markets, from capital to labour, where new employees only want to work for companies that are truly sustainable.”
But are all schools doing enough?
“The answer is clearly no,” says Peter Bakker, president and chief executive of the Switzerland-based World Business Council for Sustainable Development. “I know business schools are moving, and many have added sustainability elements to their curriculum,” says the former global company CEO. “But in the core of the current business curriculum, it is still shareholder value that beats the drum.”
If you look at business school curriculum, it is still very much driven by an agenda set in another time.
–Mette Morsing, head of the United Nations Principles for Responsible Management Education
Reinforcing the profit focus, he observes, are rankings that reward a business school for MBA salaries two years after graduation. “Where you can get the best incomes is at Goldman Sachs and other firms on Wall Street,” says Bakker. “It is not going to be at some sustainability job somewhere.” He calls for a “system-wide conversation on ‘How do we actually measure how much impact a particular MBA has?’”
One alternative is a new global, student-driven assessment that rates, not ranks, a school’s commitment to tackling society’s big problems. In five categories, the Swiss-based Positive Impact Rating (PIR) system groups schools by their level of progress in demonstrating social impact.
Students, positioned as key stakeholders in a school’s mission, rate its curriculum, ped-agogy, student support, culture and societal engagement. They also assess whether schools are living up to their aspirations, identifying what they should do less, or more, of to deliver impact. “Students are right there [at school], and you can involve them,” says Katrin Muff, president of PIR and director of the Institute for Business Sustainability. “Students are amazing change-agents for schools.”
I know business schools are moving, and many have added sustainability elements to their curriculum, but in the core of the current business curriculum, it is still shareholder value that beats the drum.
-Peter Bakker, president of the World Business Council for Sustainable Development
Muff, who hopes to expand PIR to 100 schools next year from 46 currently, concedes that progress takes patience. “There are significant barriers to change, much more in the business school and university setting than business.”
One of those barriers is the academic reward system that credits discipline-focused faculty for the number of peer-reviewed citations.
“When we evaluate faculty for hiring or promotion and tenure and salary increases, how often are the criteria being looked at even asking for faculty contributions in terms of social purpose?” asks Wharton School business professor David Reibstein, a board member of the Responsible Research in Business and Management network, which promotes academic work that contributes to social good. “We really need to change that [citation] impact measurement.”
Amid calls for purpose-driven business education is a growing recognition of the role of systems thinking to effect change.
“Business schools are the embodiment of our inability to think in systems; there are many silos,” says Jury Gualandris, a professor of operations management and sustainability at Ivey Business School, whose purpose statement now reads “inspiring leaders for a sustainable and prosperous world.”
As leader of Ivey’s Centre for Building Sustainable Value and its sister organization, the Network for Business Sustainability, Gualandris sees the potential to harness the centre’s interdisciplinary research focus and the network’s problem-solving agenda to tackle complex problems from multiple perspectives. “How do we transition from a silo approach to knowledge to a more integrated approach?” he asks.
Gualandris reflects on how “impact” is not a buzzword in the school’s current material, “but it should be. It communicates well the intention behind what we do.”
In fact, intention, communication and system-wide collaboration will all need to align if business schools are to remain relevant in training tomorrow’s sustainability-savvy leaders.
