How ‘Green MBAs’ Are Transforming Business Education

The face of the corporate world is changing. And as business philosophies on social awareness undergo an evolution, educators are responding to better prepare their graduate students.

Leading business schools in the U.S. and abroad are adopting what are being referred to as “Green MBAs” or “Sustainable MBAs.” These programs address what’s known as the “triple bottom line,” or TBL, which includes profits, people and planet. These MBAs incorporate the concepts of sustainability, environmental stewardship and welfare of the consumer society as integral components of a modern business education.

Traditionally, an MBA degree entailed studying business primarily from a financial standpoint, with some course material dedicated to management, conventional economic theory, and business ethics. Historically, the singular aim of business has been to make money, to generate profit for shareholders and build financial stability. It is clear that no business can thrive without doing that. But the current change is not primarily about fiscal responsibility; it is about an emerging social responsibility.

For Sustainable MBA students, environmental and social considerations are essential aspects of the coursework, and no longer merely useful educational adjuncts. American University in Washington, D.C., for example, offers a master’s degree in sustainable management.

Research suggests that this kind of approach to an MBA education creates a foundation for success in the more diverse business environment to come. In 2017, 85% of five Fortune 500 companies published a corporate sustainability report, in up from 20% in 2011, according to the Governance and Accountability Research Institute. And in a 2014 survey by the nonprofit Net Impact of 3,300 graduate students, 93 percent of students who responded listed social and environmental issues as “very important” or essential to a business’ long-term success.

As reports published in Sierra magazine and Bloomberg BusinessWeek suggest, companies that lead the way to new kinds of success in the future will be those that incorporate ethical and environmental issues into their business plans. The executives who will run those companies are the MBA candidates of today who study sustainability as an integral aspect of their business education.

The influence of business on society is more pronounced today that it has ever been, according to Karen Fleming, author of the Sierra magazine article who is also a business professor and former business executive. The budgets of some global corporations are larger than those of many countries. Because they can wield more power and influence over the lives of average people than some governments do, public awareness, and therefore scrutiny, is unavoidable.

Consumers want to know more about the companies they patronize than they used to, and not just about the products they buy. People are demanding transparency regarding the methods used to produce those products. The social impact and ethical standards driving the corporate philosophy, as well as the sustainability of its business plan, are all subjects of interest. Because of this, as Karen Fleming observes, corporations are held increasingly accountable by all stakeholders, not only investors. Companies like Adidas, Nokia, and Johnson & Johnson that adhere to this platform, are in sync with the public sensibility and are outperforming companies that do not.

Michael Lenox, senior associate dean and chief strategy officer at the University of Virginia’s Darden School of Business, believes sustainability is ingrained into business and that MBA programs must evolve to become more integrated and inclusive, and to address issues like climate change and social responsibility. Whereas MBA programs in past years were preparing students for management or entrepreneurship, Sustainability MBA programs now incorporate environmentally and socially friendly efficiency to mirror the desires of a new kind of student, one for whom TBL is as important as the bottom line. They emphasize minimizing negative environmental impact while maximizing positive social consequences.

A common criticism of sustainable MBA programs is that they rely heavily on academic data and not enough on the practical, hands-on lessons of experience that are essential for success in business world. The best programs offer both. Among the critics of these new programs are the entrenched economic traditionalists who maintain the only purpose of a business is to create revenue for the benefit of stakeholders.

Students can choose from a variety of Sustainable MBA programs available from business schools worldwide. These programs vary from school to school. Some focus more on management while others stress entrepreneurship or the “greener” aspects of the discipline.

Generally, Fleming observes, there are two types of programs: those that integrate sustainability into the core of the program, and those that offer an independent concentration on the subject. The Sustainable MBA programs considered to be the most effective include what is known as “systems theory,” which is the study of the interdependence between economics, societies and ecology. The idea is that people who seek MBA degrees today are as concerned with the welfare of the planet and its inhabitants as they are with maximizing profits.

 

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