Gordon Gekko, the fictitious financier from Hollywood films, embodied Wall Street when he said, infamously: “Greed is good.” Current cohorts of MBA students seem to disagree with Gekko’s mandate, as they are increasingly interested in sustainability and responsible business practices — which might fuel future profits.
In any case, the mantra at business school today might very well be: green is good.
“We’ve absolutely seen increased student interest in pursuing social impact — whether that’s learning how to scale a socially conscious venture, mastering the ins and outs of responsible investment, or preparing to sit on a nonprofit board,” says Megan Kashner, director of social impact at Kellogg School of Management at Northwestern University in Illinois.
Last year, 34 percent of her MBA students took three or more social impact electives, and more than 80 percent were involved in a related student club.
Many MBAs “want to be part of the solution”
This is a broad trend among business schools in the US and elsewhere, including Stern School of Business at New York University. Tensie Whelan, director of the Center for Sustainable Business, says: “Students are concerned about the state of the world — from climate change to racism and inequity — and want to be part of the solution. They see business as an important player in both creating the problems and the solutions.”
The change in the interests of students also reflects demand from employers, which are coming around to the realization that responsible business is fundamental to good business. “All industries are beginning to incorporate sustainability into their business strategies, which makes it a growing career path,” Whelan says.
Business schools seem to agree that sustainability should be embedded into the core modules of an MBA, making the responsible business practices mandatory. However, approaches to teaching these important subjects vary between schools. The divergence centers on whether the topics should be offered as standalone courses, or integrated alongside traditional skills such as finance and accounting.
Batia Wiesenfeld is director of Stern’s Business and Society Program, an interdisciplinary initiative to develop responsible business leaders with the skills to address economic, social and environmental challenges.
She says the choice to integrate depends on the subject. In an evolving field such as environmental, social and governance investing, she says students will benefit from learning novel tools and skills in standalone elective courses, giving them more time to home in on dynamic practices.
“[But] responsible business education is the only kind of business education students should receive,” Wiesenfeld adds.
At the Rotterdam School of Management in the Netherlands, sustainability is woven into several of the core MBA courses and students have to complete a consultancy project focused on social impact. They can also take additional electives in sustainability to deepen their expertise, if they wish.
Does learning sustainability mean not learning something else?
Brandon Kirby, director of marketing, sales and admissions, says that a focus on responsible business helps to attract prospective students to RSM. “For these students, work is more than just a paycheck; it’s also a reflection of their values, so it makes sense,” he says. They’ve grown up with the notion of companies giving back and having CSR initiatives.”
However, he highlights a potential drawback in making sustainability mandatory: a trade-off with more traditional skills. “There is a finite amount of time within a program, so there would be a need to trim some other content,” Kirby says, but what to trim remains an open question.
Stern’s Wiesenfeld suspects these trades-off are more apparent than real. “The conventional wisdom is that a business school curriculum is already packed full of core concepts that students can’t function without, like linear regression or decision models,” she says. “However, the intuition behind these concepts is taught quickly, and then much class time is wasted on review in the form of implementation.”
In the UK, Saïd Business School at the University of Oxford believes responsible business is important enough to be compulsory and has made this a core course on its MBA program.
Matthew Conisbee, MBA program director, points to wider pressures for change: “In recent years, as some of the challenges which we face globally have gathered pace, whether that be economically, environmentally or socially, the sustainability agenda has become increasingly integrated into business practices.”
Charmian Love, a social entrepreneur in residence at Oxford’s Skoll Centre for Social Entrepreneurship, who teaches MBA students, adds: “We know the challenges facing the world today require the best and brightest — which is why it is important for every single student to understand these systemic emergencies and the solutions.”
As well as this, Oxford seeks to make a positive impact itself through its research, which highlights areas where business and society can improve upon. An example is a forthcoming paper by Oxford professors Richard Barker and Robert Eccles, which explores whether mandatory reporting standards are a prerequisite for effective nonfinancial corporate reporting — an open question.
More MBA students opting for careers in sustainability
But for most business schools, the impact is most keenly felt through their teaching. In 2015, Kellogg launched its Social Impact Pathway – a series of more than 34 courses that help students define social value and learn how to influence social change. The school added an Energy and Sustainability pathway in 2019.
Kashner says that MBA students are choosing careers to further the sustainability agenda. This past summer, 44 Kellogg students worked social impact internships for major philanthropies like the Gates Foundation, clean energy firms like BlueWave Solar, and impact venture capital firms like Quona Capital.
Kashner says impact is now placed on a par with financial gain: “Today, sustainability, values, impact and financial strength are inseparable considerations, which can’t be understood in isolation from one another.”
RSM’s Kirby disagrees, however. “At the end of the day, I believe that for most graduates financial gain is still above everything else.” That said, he says more graduates are asking: do this company’s values align with mine?