Keywords

Introduction

The business of business is changing radically, and so the skills required by the people who lead corporations are also changing. As business increasingly sees itself as a positive agent for social, environmental, and economic change, so the skills and experiences needed by business leaders need to reflect the new reality. Business schools create business leaders. How should they react to this new need?

Each generation of business leaders lives through a period of change, and it is by capitalising on that change that businesses thrive (Matai 2011). The growth of corporate success is, to a large extent, the story of meeting the challenges of change. For example, the successful companies of the industrial revolution were those that responded to the new opportunities that technological and social change gave. Indeed, they were often those that led the change. A similar experience has been more recently seen with the Internet and social media revolution, where successful businesses have led the change to new business models (Serrat 2017).

Today, the world is challenged by unprecedented global societal, economic, and environmental challenges. This means that corporations are looking beyond traditional business models, including models of corporate responsibility. Traditional corporate action to “to do good” has evolved from many different complementary angles. The first case stems from a sense of social responsibility, and possibly dates from the beginning of the corporation (see, e.g., Pierson 1959, 323ff). The root of the argument is, in the words of Paul Polman, ex-CEO of Unilever, “The purpose of business is first and foremost to serve society” (Ignatius 2017). This concern drives activities like philanthropy and demonstrations of moral leadership that have increasingly been seen in the world stage (cf. Anderson 1986). Such activities are frequently driven by the CEO of an organisation or strategic, marketing, or Corporate Social Responsibility (CSR) departments.

In contrast, for many organisations, the main drive for sustainable action does not come from a sense of moral obligation but from other business drivers. For example, many companies see a wider business case for sustainability. There are multiple cases of new opportunities that open with sustainability, greater supply chain resilience, reduced risk, lower operational costs, and improved staff morale (e.g., Graham 2013; Grubnic et al. 2015; Ignatius 2017). The author’s own experience is that businesses that understand and gain from sustainability are those that combine a wide sense of morale obligation and understanding of the huge business opportunity with a desire to demonstrate leadership not just in their industry but beyond.

The societal role of universities and educators in society is something that dates back hundreds if not thousands of years. However, the business school, a more recent creation, is in many ways unique, located on the tectonic fault line between the academic and business community. (Gardiner and Lacy 2005, 179)

Business education has also claimed to be at the forefront of promoting social responsibility for many decades (Rive et al. 2017). There has been a sharp rise in the number of courses at business schools that look at Corporate Social Responsibility (CSR), ethics, and sustainability, many claiming to cover all three subjects seriously as part of their programme (see, e.g., Christensen et al. 2007). At the same time, researchers have increasingly found sustainable business a rich mine of information for a range of research areas. For example, fields like operational and risk management are ripe for sustainability, and there are many studies around supply chains and other complex operational scenarios that can be used to demonstrate the business case for sustainable activity (e.g., Crates 2016; Gold and Schleper 2017).

Given all this development, how successful have business schools been at encouraging sustainable business practice and empowering the next generation of sustainable business leaders?

The iconic course for many business schools is the MBA and so it seems sensible to start here. The degree is widespread and used frequently as a benchmark for business leadership and there is evidence that MBA-qualified business leaders run corporations that are more sustainable than their competitors (Slater and Dixon-Fowler 2010). As the same time, it has been under attack as being too focused on profit over ethics (Rasche et al. 2013). To understand the issue more deeply, the author undertook a small study of sustainability professionals who had engaged with MBA programmes. Many were graduates themselves of MBA programmes or had recruited those with MBA qualifications to work under them in their companies. They included both practitioners and consultants who worked for companies of all sizes from very large multinationals to microbusinesses, and included people who worked in the USA, Europe, and Asia.

Based on this research and hundreds of years of cumulative experience, it is clear that there are some things that business schools need to do to really become the place that fosters the sustainable leadership that business needs in the coming decades. These needs can be divided into five areas, which are not listed in order of priority. They can be defined as the six Cs of Curriculum, Context, Communication, Collaboration, Connection, and Challenge.

Curriculum: Ensure Sustainability Is Central

We are faced with a paradox: Is education the problem or the solution in working toward a sustainable future? At current levels of unsustainable practice and over consumption it could be concluded that education is part of the problem. If education is the solution then it requires a deeper critique and a broader vision for the future. (UNESCO 2005, 59)

For many of the MBA graduates, one of the major aspects of the course to them was that sustainability was felt to be peripheral to the main point of the degree; as one graduate said, “a bit of shoehorning in sustainability and CSR with intangible value of the firm.” Many spoke of their courses treating sustainability as an add-on and not treated as seriously as subjects such as marketing or strategy. While it was noted that the flexibility that electives offered meant that there was an opportunity for more depth, it was generally agreed that, “it was quite elementary,” with one graduate saying, “there was nothing I learnt that you or I did not learn within a few months on the job.” For many, when asked what they would change most about their experience it was that sustainability needed to be more integrated into the course.

This challenge has been identified globally (Jamali and Abdallah 2015). In an overview of studies of business schools worldwide, Setó-Pamies and Papaoikonomou (2016) found that overall coverage of CSR and sustainability was very poor. In Spain, only 25% of business schools offered CSR and ethics as stand-alone courses while in Belgium, only 12% of schools included CSR at undergraduate level. Many of the courses themselves are driven by staff with an interest in the subject rather than an overall business school strategy (Stubbs and Schaper 2011). At the same time, studies have found that top-performing schools more frequently include ethics, CSR, and sustainability (Christensen et al. 2007), but frequently the subject is elective rather than core (Rasche et al. 2013). While the situation is improving, there is evidence that it is still only the leading business schools in each nation that are engaging with sustainability (for a Portuguese example, see Branco and Delgado 2016). Those which do, demonstrate the “potential of postgraduate MBA courses to promote sustainability within the private sector, especially if sustainable development is embedded across the curriculum” (Annan-Diab and Molinari 2017, 79).

Business schools should consider sustainable business core to their curriculum and not rely on elective modules to teach CSR.

Curriculum: The Centrality of Sustainability to Business

It becomes more central everywhere. Imagine doing a ten year discussion of the future strategy of whatever organisation it is and ignoring issues of sustainability. Are you mad? (A member of UK business school faculty quoted in Brammer et al. (2012))

Not only were concerns raised about the position of sustainability in the curriculum, but also by the presentation of sustainability in business. The idea that embedding sustainability in business strategy brings business success has been current for decades (e.g., Elkington 1994) and there is increasingly large evidence that businesses of all sizes and across a wide range of industries are embracing sustainability as a core strategy (Graham 2013).

Business schools frequently focus on business strategy (Brammer et al. 2012) and so have a huge opportunity to demonstrate the strategic value of sustainability. However, there is evidence that the majority of schools do not encourage this way of thinking (Matten and Moon 2004). As one graduate said, “There was no clarity on [the] strategic importance [of sustainability].” One graduate noted that while their strategic module covered a wide range of issues, including marketing and pricing, it did not touch once on larger social, economic, or environmental issues. In fact, as one graduate mentioned, even when the term “environment” was used, it was restricted to phrases like “competitive environment” with no connection to issues like biodiversity or climate change.

One MBA graduate particularly mentioned a module that was offered as part of their course that was promoted as covering sustainable business. However, they felt that in this case, sustainability was included, was treated as a means to an end rather than a subject of interest in itself: “The focus was on how to run a business that sells sustainable stuff rather than how to run a business sustainably.”

By putting the strategic nature of sustainable business central to the course, this also means that the student experience is enhanced. In fact, as Michael Page, Dean of Rotterdam School of Management at Erasmus University said, “If you only place ethics, CSR, and sustainability into functional courses, the faculty may only pay lip service to the topics” (quoted in Christensen et al. 2007, 356).

Business schools need to understand the fact that responsible business is of interest in itself and not treat sustainability as a means to an end. The curriculum needs to demonstrate that sustainability is now core to business strategy for many successful firms and to teach students the reasoning that leads to successful sustainable business strategy.

Context: Clearly Show the Value of Sustainable Business

Sustainability has to be strategic and incorporated into all the operations, decisions and programmes across the whole business. Therefore the role of academics is to educate students of all levels to understand that there is more to creating a sustainable business than recycling, turning off a light switch or donating money to an ecological charity. (Williams 2012)

Part of this stems from a fundamental understanding of the role of business in society. For many business schools, sustainability is considered part of corporate responsibility, responsible business, and CSR which are themselves considered part of ethics (Rasche et al. 2013). Thus, they focus on why businesses should be sustainable rather than how this can be facilitated (Cullen 2017). As one graduate said, “the course will need to show them how sustainability can give them and their business the edge over the competition, instead of a compliance millstone this is now a business opportunity that could differentiate their business into new untapped markets and generate extensive goodwill in the market.”

To do this requires a real engagement with sustainable business beyond ethics and CSR. As one graduate said, there is a huge opportunity for schools to demonstrate the importance of “mainstreaming by embedding sustainability in day-to-day business processes.” This is not to say that business schools need to teach modules on environmental risk management or legal compliance, although there may, as graduate put it, “exist a requirement for many business executives to first understand the very basics of how the planet functions.” Rather schools need to give their students the skills to understand good sustainable practices and the importance of these in a business context (Elkington 1994). As one graduate said, “I wish my MBA prepared me for thinking in an analytical way about sustainability.”

Business schools should be places where students learn how to be successful sustainable business leaders and provided the wide range of tools that they will need in the complex business environment that they go to after graduation.

Context: Champion Best Practice

It has been long recognised that involving businesses in business schools enhances the student experience (Haski-Leventhal and Concato 2016). Case studies are a useful teaching tool that enables students to better understand how the theories they learn are realised in the business world (McCarthy and McCarthy 2006). Many schools use case studies, either presented in class, through multimedia, by visiting speaker, or through site visits. This meant that the course could provide, as one graduate said, “something a bit more real life focused as opposed to academic.” Case studies are often those of well-known companies like Exxon Mobile and Rio Tinto, and can be used to highlight the challenges that businesses face in sustainability as well as good practice.

There are many great examples of sustainable businesses, many of which are not well-known brands (e.g., Grubnic et al. 2015). Providing the students with a wider range of case studies also broadens them to see potential employment and business opportunities. Business schools are also well known for bringing in external speakers, taking students on trips to see businesses, and encouraging students to undertake placements and internships. By building relationships with sustainable businesses, students will therefore see how sustainable leaders build their companies.

There is a particularly strong need to dig deeper into companies. Companies are prone to either underplaying or overplaying sustainable achievements. The former, aptly named “greenhushing” by Font et al. (2017), is likely to be increasingly common as more organisations engage in the right actions but feel that their customers prefer not be told about sustainability benefits. The latter is exemplified by what is termed “eco-bling” by Liddell (2008), where environmental projects focus on the visible rather than the material. A wider and more derogatory term, “greenwash,” has been used for decades to describe examples where companies seem to talk about sustainable actions as an alternative to effective action. Cutting through the greenwash, eco-bling, and greenhush to find the companies that are truly engaged in sustainable business is something that requires the proven academic skills of systematic research and critical analysis. It also means that academics need to spend time speaking with the pioneers of sustainable business.

Once formed, the relationships need to be ones of high levels of trust between the companies, universities, and students. As Rive et al. (2017) rightly say, “Socially responsible cooperation between business schools and companies is considered a win-win game when the game rules have been clearly defined” (p. 240). For one thing, the companies need to feel able to speak openly about times where they have found the journey difficult. Becoming a leader in business is not easy, and that is true as much for sustainable leadership as any other field. And students gain more when businesses feel able to explain the less photogenic sides of their journey as well as the successes. Sometimes, this experience is best served by connecting with business leaders who are no longer employed by the companies that they transformed as this can sometimes enable them to have a more balanced perspective, but schools should balance this with a need to keep the student experience relevant and timely in the fast moving world of sustainable business.

Business schools need to create solid partnerships with sustainable leaders with corporate experience to help their students to see the practical implications in business.

Communication: Demonstrate Integrity Through Sustainable Practice

The issues of greenwashing and greenhushing are issues of credibility and business schools are confronted with similar challenges. In addition to the challenge that they promote unsustainable business models, many schools have also been challenged on the integrity between their teaching and their practice. In the area of sustainable business, this is most usually directed at the university rather than the business school, and often around specific issues like the Living Wage or Fossil-Fuel Divestment. There is evidence that business schools that have more success embedding sustainability and CSR into curricula are aligned with institution which have research into sustainable issues (e.g., Christensen et al. 2007) but it is, to some extent, just as important that the institution “walks the walk.” Similarly, there are some good examples of programmes run by business schools using community and social engagement as part of their student offering like Burgundy School of Business’s Pédalogie par l’Action Citoyenne, winner of a 2016 Trophée des Campus Responsable.

However, there is less evidence of schools are leading the charge in sustainable operations. Two global respected global standards for building energy efficiency, for example, are BREEAM (Building Research Establishment Environmental Assessment Method) and LEED (Leadership in Energy and Environmental Design) and buildings that hold high rating in these schemes are often held up as exemplars for sustainable construction and operation (Cole and Valdebenito 2013). However, a search of the US Green Business Council website found that only four business schools in the USA have LEED Platinum buildings, including Harvard Business School’s McCulloch Hall, with the Peking University HSBC Business School in China standing alone in the rest of the world. As of the end of 2017, no business school in the world was housed in a building ranked BREEAM Outstanding.

For students, this is becoming critical. Increasing access to information and a desire for accountability is driving a generation of students to ask more questions of institutions, particularly about how they are run. They often consider sustainability as important as finance in their decision making (Graham 2015). It is therefore critical that business schools engage with sustainable activity in their operations as well as their teaching and research if they are to become leaders themselves in sustainability and to show credibility to their students. This will then ensure the students receive the integrated and inspirational education that will foster them as leaders in sustainable business.

Communication: Cover the Complexity

Along with this greater access to and demand for data comes an acknowledgement of the complexity of life. This is particularly important in business and sustainability where simplistic answers can often lead to misunderstandings. In the words of one respondent the purpose of an MBA is to “understand the motivations, constraints and opportunities those businesses face on the path to sustainability.” Business schools are increasingly engaging with the complexity of sustainability and are using this to teach the soft skills that are required by the corporate life as much, or more, than skills in marketing and finance (Wright and Bennett 2011). “Graduates increasingly need to have the ability to question assumptions; to understand that the way things have always been done is not necessarily the best way for business or for society to continue, and to explore alternatives. Students should be open minded, culturally aware, willing to listen and learn. They should be able to ask the right questions [and] deal with complexity” (Weybrecht 2017, 89).

To engage with complex issues like this requires an understanding of the depth of sustainability as well as its breadth. This means that, as well as helping students to see how sustainability empowers business strategy, business schools need to show how it helps to answer the complex questions where business interacts with society, the economy, and the environment. There is evidence that students engage well with this type of activity (e.g., Deer and Zarestky 2017), and that business schools can enhance the student experience by including sustainable leadership as a key part of their learning objectives.

To do this will require pedological transformation. Business schools will need to look at sustainability anew and see how it can inform how they teach business and its complexity.

Collaboration: Break Down Barriers Between Disciplines

What if we had courses that brought together examples from not just the business world, from political sciences, law, from environmental studies, so students get a richer appreciation of the challenges they will confront when they graduate? Indra Nooyi, ex-CEO PepsiCo (quoted in Annan-Diab and Molinari 2017, 73)

At the same time, there has been a steady growth in collaboration across subjects to improve students’ understanding of the challenges of sustainable business. Much of this has taken place outside business schools, for example, between engineers and sociologists (Byrne and Mullally 2016), but there are many opportunities for business schools to also engage in the multidisciplinary work that underpins sustainable business. Many of the leading schools are also showing leadership in this field. For example, Christensen et al. (2007) found that the University of Michigan aimed to “develop a deeper understanding of sustainability issues by exploring areas such as engineering, health, law, ethics, anthropology in addition to the traditional MBA and MS disciplines” (p. 363).

For sustainability professionals, this multidisciplinary approach is critical. “The greatest soft skill that I have learnt in this job is the ability to talk to people across the company in all departments.” “Sustainability crosses all the barriers in the business, and so I need to be able to talk to everyone in language they understand.” It is therefore essential that business schools encourage their emerging leaders to manage multidisciplinary projects and understand the implications of working with people across business, in operations and manufacturing, design and procurement, marketing, and government affairs.

Business schools need to work across disciplines to help students to engage with sustainable business and teach them the skills that they will need in their later working life.

Collaboration: Create Community

Few companies can afford large sustainability teams and in consequence the role of sustainability practitioner can often be very lonely. Practitioners often work alone or, if they are part of a team, it is rare to work alongside another person with knowledge and experience in the field (Graham 2014). Staff who work in isolation often have lower productivity than those working in teams, and this can be the case even when the individual is theoretically part of a team but completes their tasks alone (cf. van Dick et al. 2009). This means that sustainability staff may be disproportionately dependent on support from outside their organisations. While such excellent networks exist for knowledge sharing these are frequently limited in geographic scope. Therefore, business schools have a large opportunity to be community builders.

However, currently, the opportunity to create such a network for each school is limited. Traditionally, the number of sustainability executives in most MBA programmes is small. As one graduate commented, “I was very much an exception as a sustainability professional on my MBA programme.” However, the interest and awareness of sustainability amongst students in business schools is increasing dramatically (Haski-Leventhal and Concato 2016). As this interest grows, it can be nurtured by alumni and cohort connections, but also through networks that transcend the schools. This is one area that the UN Global Compact and its Principles for Responsible Management Education (PRME) initiative mentioned earlier in this book can help. The PRME community includes over 650 institutions representing over 85 countries and is organised across 14 regional chapters (Haertle et al. 2017). Its principles include an objective to “facilitate and support dialog and debate among educators, students, business, government, consumers, media, civil society organisations and other interested groups and stakeholders on critical issues related to global social responsibility and sustainability.” And part of this could be to support the creation of a network of business school graduates who are actively working in sustainable business.

Business schools need to work together to foster connections between sustainable business professionals across sectors to continue to share knowledge and experience even after they graduate.

Connection: Cultivate Passion in the Cohort

The course must be able to generate a real and personal connection with the candidate relating to the environment and sustainability based on their own personal motivations be that for the environment, for their career, their family or their company. (Tertius Beneke)

Business schools have been challenged by the need to engage emotionally with students and provide them with a values education that goes beyond profit (Rasche et al. 2013). Sustainable business provides exactly this opportunity. Many programmes base their offering on providing a vehicle for students to combine their passion for social justice with an understanding of business (Christensen et al. 2007). Indeed, students of sustainable business frequently start from a position where they are driven by purpose like a passion to solve a particular social problem (Deer and Zarestky 2017). Being a sustainable business leader brings a new level of meaning and purpose. As one graduate put it, “Who [else] in their day job can say that they contribute to sustaining their life support system?” This passion has the knock-on effect of also enabling sustainability leadership to be more embedded in the school (Brammer et al. 2012).

Business schools can go beyond this, however, and inspire a generation that as yet does not understand the part that they can play in transforming business. A new generation of potential students is rising that sees business as a sustainable leader and is prepared to take their place in this if given the right tools (Graham 2015). These students are often not excited by traditional business graduate school courses and so are new and untapped markets.

To inspire a new generation means looking afresh at the focus of business schools. In the words of one graduate, it means “combining facts with emotional and behavioural awareness.” The school needs to take a strategic approach to recruiting, retaining, and inspiring passionate people. It also means exploring the full breadth of sustainable practice to find points where students can connect.

Critically, it also means engaging students with an understanding of how sustainable business leadership will enable them to achieve their own personal goals. As one graduate said, “they are doing an MBA, they want to excel, they want to be the best they want to achieve and if this is their driver and goal they cannot achieve this without understanding sustainability.” Sustainability is increasingly a key to business success for many companies and, as one graduate said, “If they want to excel and be the best they will need to know how sustainability works.”

Business schools need to engage with the emotions and imagination as much as the intellect to inspire students.

Challenge: Explore Alternatives to the Consensus

This is a vision that challenges business schools to examine their relationship to society, to the business community, and to the higher education landscape. It will mean thinking, organizing, and acting in ways that have thus far been unusual or underdeveloped. It will mean incorporating new models and strategies and devoting renewed attention to economic, environmental, and personal well-being for all populations around the world. (AACSB 2017, 3)

More fundamentally, there is a need for business schools to radically look at business through a new lens. Sustainability gives business schools the opportunity to reassert their legitimacy as positive agents in society (Snelson-Powell et al. 2016). It gives them a positive agenda to encourage their students and funders that they too can be part of the solution to the great social, economic, and environmental challenges of the age. It can be the catalyst for change that is needed in the discipline (Fisher and Bonn 2017).

For the emerging sustainability professional, this is critical. The path to being a sustainable business is not simply to do the same things that have always been done a little bit better. It is to rethink the way that business operates. As one graduate said, “Business schools have not caught up with the fact that we need to do business differently.” As Paul Polman said, “We needed a new economic model; we also needed a different business model. Not one based on being ‘less bad’ or on occasional acts of benevolence, but one where business has a positive impact on society in all it does” (Ignatius 2017). That means a radical rethink of what it means to do business. It means redefining what business means.

For business schools, this means looking beyond traditional business models to new paradigms like circularity and the sharing economy. They need to, as one MBA graduate said, “banish the thought that financial capital is the only capital or resource that an organisation uses” and include raising awareness of critical business issues like natural capital. It means looking beyond short-term shareholder value and business cases to the wider purpose of business as a societal good. It also means, in the words of another MBA graduate, looking at the “many problems we have yet to properly face including income inequality and the rise of the precariat.” For many business schools, it will mean challenging the very models of economic prosperity and corporate success on which they base their curricula.

Particularly, it means starting to challenge business itself about its mission. Business schools have a critical role in empowering the next generation of business leaders to see their role as providing a new vision for business. As the world needs more sustainable businesses, it is incumbent on business schools to give their graduates the tools they need to become these leaders. They move from seeing sustainability as a peripheral activity to one that transforms business and creates a space where they can thrive. They need to see how they can create a community of corporations that can be positive agents for change and to create companies that are actively working for social, economic, and environmental good.

Challenge: Cultivate Transformational Individuals

One of the key roles of business schools is to create responsible business leaders (cf. Williams 2012). The school must therefore foster the skills that will enable their graduates to become the change-makers who are needed to transform business for the better. This means going beyond, in the words of one graduate, an “understanding how business works and how business leaders think.” It means having the tools to understand the challenges that corporations face and the opportunities that sustainability and business afford for each other. Fundamentally, this means perceiving the student not as a business person who needs to understand sustainability but as a student of sustainable business.

The purpose of the company is not to enrich its shareholders, but to enable sustainable value creation for its various stakeholders (including investors) in the short, medium and long term. (Jyoti Banerjee)

The first step in this is to reconcile the different languages of business with sustainability and CSR. As one graduate commented, an MBA offers the opportunity for the student to gain “the tools and vocabulary to speak with decision makers and line staff in ‘traditional’ companies and organisations, and understand the motivations, constraints and opportunities those businesses face on the path to sustainability.” For many graduates, this is essential, as communication is key to so much of their success in business. However, it is also a key skill for entrepreneurs creating new opportunities.

The next step is to empower students to actively engage with others to create solutions. As one graduate put it, “how to be stakeholder-informed, not stakeholder-driven.” Businesses frequently end up being reactively sustainable by responding to stakeholder concerns. True sustainable leadership relies on being informed by the non-consensus of complex stakeholder webs and uses this to create a strategic agenda that exceeds the social, economic, and environmental needs of all.

It also requires that leaders be able to take their own path, and that is the third step. Business schools should challenge their students. As one graduate said, “Sustainability challenges centre on the person and person’s perspective.” By challenging traditional business models and silo-driven ways of working, business schools can demonstrate how business leaders can transform the world. By demonstrating how successful businesses are sustainable, both through their own actions and through the case studies that they show, they can light a path to guide the entrepreneur. And by showing leadership through community collaboration and communication, the school itself can be a beacon for sustainable leadership itself.

To achieve this requires a revisioning of the business school. Business schools are not a crucible for leadership. They are the nursery for the next generation of business leaders. Their corridors are the place that business inspiration can be found. Their halls are where the complex economic, environmental, and social challenges that business face can be understood, and where emerging business leaders can learn the skills to transform the corporate world into sustainable business.