Businesses are coming under ever more scrutiny for the impact their operations, products and services have in the world, both from a social and environmental perspective. As the training grounds for the world’s future leaders of those businesses, MBA programs have an important role to play in developing responsible leaders.
And many such programs are taking that role ever more seriously, adapting their teaching to move beyond a traditional focus on profit maximization, to emphasize a broader array of the stakeholders that businesses serve. The MBA students themselves are demanding more of this “green” content in the curriculum.
So, what should they be learning to ensure companies respond to the need to look beyond profit and consider their role in wider society?
“All students need a basic fundamental understanding of climate change and other sustainability issues to lead successfully in business,” says Michele de Nevers, executive director of Sustainability Programs at Berkeley Haas School of Business in California.
“Climate and sustainability issues touch so many different areas of business, depending on corporate roles,” she adds. There are many areas to consider, including disclosure of climate risk in financial statements, environmental externalities, managing resource scarcity, life cycle assessment and green buildings, sustainable operations and decarbonizing supply chains, among others.
To date, 40 percent of the Haas MBA core curriculum courses now include sustainability content. In addition, students can take the Michaels Graduate Certificate in Sustainable Business to further develop the necessary frameworks and practical skills to imagine and implement more sustainable business models and management practices.
Beyond maximizing shareholder value
“Today we recognize that the role of businesses, management, and corporate leadership must go beyond maximizing shareholder value to consider the wider group of stakeholders that are integral to a company’s success,” says de Nevers.
Stela Ivanova, the academic director of the MBA in International Management at ESCP Business School’s London campus, agrees. “The leaders of today have a much greater task on their hands. They have increased responsibility to multiple stakeholders, beyond their customers, employees, shareholders and business partners. They also need to make sure their companies create value beyond profit,” she says.
The best asset of any MBA program is the students. So ensuring that the school has a diverse set of people taking part in the conversation enables them to address the important questions around sustainability and social value creation from multiple angles.
“Putting together people from engineering, marketing, entrepreneurship, operations and science backgrounds enables them to hit all the relevant areas of a business and to create solutions that have sustainable supply chains, inclusive marketing messages, [and] innovative products and services addressing the problems of today,” says Ivanova.
High student demand for sustainability content
On a more practical note, ESCP includes a sustainability component in every subject taught in the MBA, from human resources to entrepreneurship and finance. The level of demand for such content coming from MBA students is exceptionally high. “They expect it as a default,” Ivanova says.
What they are starting to demand more and more is that schools do their part in addressing the climate crisis. “More and more candidates ask during the interview process what initiatives we have in place to reduce our carbon emissions,” adds Ivanova.
Antoine Decouvelaere, executive director of innovation and executive development at IÉSEG School of Management in France, also points to rising interest in sustainability and responsible business on the part of MBA students.
“It is an increasingly accepted request from our participants, who need to align their personal values with their professional career. We have a responsibility towards them, to provide them with the keys to understand and act in our world, which must become more sustainable,” he says.
Sustainability has always been important for the IÉSEG school since its creation. But sustainability can no longer be taught by itself, insists Decouvelaere, as business leaders must now make decisions by taking into account not just the financial but the societal impacts of those decisions. “That’s why sustainability and responsibility are more and more taught in interdisciplinarity courses,” he explains.
Looking ahead, such changes to the curriculum seem likely to expand and stick. “As the world, business and society become ever more interconnected and complex, we believe leaders should have a systemic vision of organizations,” Decouvelaere says. “This inevitably requires a better understanding of societal, social, and environmental issues, [and] needing to integrate them into leaders’ training.”