Two MBA students from the Judge Business School in Cambridge made an unusual public pledge last spring: to take reducing carbon emissions to heart and integrate sustainability into their future careers as business leaders. Their Climate Legacy Commitment has since been signed by over 450 of their peers at 15 leading business schools, with support from employers including Kearney and Novartis.
This initiative is one of a growing number of indicators of pressure for change in management education — in recruitment, research, and teaching alike — to more fully embrace responsible business practices and to tackle the pressing challenges facing the planet.
Green values and “green jobs” are an increasing priority for the younger generation. Their interest is reflected in student activities at individual universities and coordinating networks such as oikos International and Net Impact — organisations with a focus on societal purpose.
Gishan Dissanaike, the newly appointed dean at Judge, says: “Our students are hoping to make a positive impact on the world. Two or three decades ago, they wanted an MBA to make as much money as they could. Today, it’s the same, but they don’t want to damage the planet or hurt fellow human beings.”
Business schools themselves have been slower to respond, in part because they have been sustained by students with more traditional corporate aspirations, as well as inertia from academia and employers. In the US, the re-election of Donald Trump as president will put fresh pressures on some schools to maintain a low profile or back away from environmental, social and governance themes.
Nonetheless, there is clear momentum reflected in the initiatives considered for the latest FT Responsible Business Education awards, now in their fourth year. The winners and highly commended projects demonstrate a rich range of student projects, academic research and innovative teaching focused on impact and sustainability.
More broadly, educational content is evolving to embrace these themes. Harvard, Ivey, The Case Centre and other distributors of teaching cases, which are widely used in classrooms around the world, are increasingly publishing and assembling collections of materials aligned with the UN’s sustainable development goals.
A survey of 99 primarily North American schools in 2023 by the Graduate Business Curriculum Roundtable network showed that four-fifths offered sustainability and two-thirds social entrepreneurship at least as an elective in their courses — while a handful made either topic a requirement. That reflects the realisation that sustainability is increasingly an essential business issue.
Business Schools for Climate Leadership, a consortium representing some of the leading European business schools, has shared free learning materials on the topic. The US-led Open Climate Curriculum, and similar initiatives by networks of schools in Africa and in the Middle East, have followed.
The Network for Business Sustainability is among other business school groups that offer climate change webinars. And measurement tools such as the Sulitest questionnaire, which assesses knowledge of climate change by students, are expanding their reach.
Equally, in academic research, scholars are publishing more work around sustainability and social impact, with the emergence of new specialised journals in the field and a rise in the number of such papers accepted in the more established top journals.
Harvard has overseen the creation of a free financial economics of climate and sustainability course, which is accessible to doctoral students and taught by leading academics at multiple institutions. The aim is to foster shared insights and help build the next generation of finance professionals with deep intellectual expertise.
On their own campuses, a growing number of business schools — often in partnership with the wider universities to which they are affiliated — are now examining the environmental impact of their own operations. They are tracking carbon emissions and setting targets to move towards net zero: through vegetarian meals, water fountains to replace plastic bottles, and cutting long distance travel for students and faculty, for example.
School leaderships are shifting, too. The UN’s Principles for Responsible Management Education (PRME) have more than 850 signatories from nearly 100 countries. The Responsible Research in Business and Management (RRBM) network, now entering its 10th year, counts more than 100 institutional partners, and, last year, launched an inaugural Asia-Pacific summit to add to its annual meetings that have rotated between North America and western Europe.
International accreditation frameworks including Equis, AACSB and AMBA have increasingly incorporated societal impact into their assessments of business schools. And organisations that rank business schools — including the FT — are seeking to integrate measures around climate and sustainability.
The UN’s Higher Education Sustainability Initiative tracks and engages with those involved in ranking universities, including business schools. Its aim is to establish common standards and inject measures around sustainability more broadly into evaluations.
Andrew Karolyi, dean of Cornell SC Johnson College of Business, chair of RRBM and vice-chair of UN PRME, says: “I feel like there’s a lot more discussion about the broader impact of research.” He will seek a commitment at UN PRME’s annual meeting this summer “for an even stronger level of engagement of all these business school insiders with corporations around the world”.
Andy Hoffman, a professor at Michigan’s Ross School of Business, says: “I am seeing signs of positive change in certain settings. Young faculty and PhD students seem more interested in having real-world impact with their scholarship . . . and this topic emerges in more and more discussion in academic seminars and meetings.”
But, as he writes in his forthcoming book Business School and the Noble Purpose of the Market, “the pendulum has swung too far, with the teaching mission being overtaken by the research agenda and, more important, research focused primarily on questions of theoretical, not empirical, relevance”.
Hoffman argues that the MBA qualification, in particular, remains “fixated on 50-year-old notions of shareholder primacy and a variant of the ‘greed is good’ mentality”. He feels that its focus on climate change is “on ways to make ‘the business case’ and gain market advantage when addressing climate change, while giving very limited attention to the pragmatic reality that we are talking about an existential threat to life on Earth.”
Hoffman blames institutional factors including the structure of academic recruitment, tenure and promotion, which is normally determined by faculty committees in established fields and linked to their record of peer-reviewed publications.
Except in smaller business schools, or a handful with a very different management structure, that results in a bias towards academic theory and research, with little scope for promotion based on other factors — such as policy impact, outreach efforts by faculty, or strong teaching ability.
Alex Edmans, a professor at the London Business School, argues that writing papers for a tiny academic audience remains a top priority for junior staff — far more than conducting research that influences policy or focusing on teaching. The latter “has zero weight in tenure even though students are the clients who pay our salary”, he says.
“It has not changed over my 17 years in this profession — and will never change,” he adds. “For policy-relevant research, most academics won’t do it, because you get zero academic credit”.
Meanwhile, employers sustain the status quo by continuing to actively recruit in well-established ways from the usual business schools they have used in the past, minimising incentives for reform. Even as they may rebrand many roles as “green jobs” or provide “purpose” to attract a new generation of applicants, few show much evidence of articulating new values or skillsets.
However, other pressures may accelerate reform. New research institutes are being created beyond business schools, backed by donations such as John Doerr’s grant of $1.1bn for a climate change school at Stanford University. Current and future business leaders are also turning elsewhere for training courses in the field, such as at the Smith School of Enterprise and the Environment at Oxford university and Cambridge university’s Institute for Sustainability Leadership.
Mette Morsing, director of the Smith School, says: “The business school has arrived very very late to address the world’s most urgent global crisis, leaving the climate and nature crisis largely to the natural sciences. I strongly believe that business schools need to collaborate with climate scientists, engineers, geographers, chemists, anthropologists, and others to tackle these challenges.”
Similarly, non-academic institutions are also increasingly offering more practically oriented sustainability training. Examples include the Axa Climate School and the DO Academy, which, this June, will receive its first full cohort of 1,000 young entrepreneurs, to be given free training and mentorship, thanks to a large grant from Mercedes-Benz.
Katherin Kirschenmann, co-founder of DO, says: “I started with a bachelor’s in philosophy and economics, in Germany, because that was the only way to do anything related to ethical business, 20 years ago. It’s been a slow adaptation since, although demand has changed rapidly.” She says the training on entrepreneurship with sustainability is “not really something you can teach in a classroom, listening to a professor”.
If business schools do not evolve more rapidly, a significant subset of their student customers risk shifting to alternative providers.
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