Andy Hoffman, Holcim professor of sustainable enterprise at the University of Michigan, moderated a panel that discussed efforts to include climate change in the education of business school students. He was joined by Anant Sundaram, professor of business administration at the Tuck School of Business; Eric Orts, director of the Initiative for Global Environmental Leadership at Wharton; Jacob Park, associate professor of business strategy and sustainability at Green Mountain College; Dan Reicher, executive director of the Steyer-Taylor Center for Energy Policy and Finance at Stanford University; and Melissa Paschall, director of the Business & Environment Initiative at Harvard Business School.
CURRENT CLIMATE EDUCATION EFFORTS AT TOP BUSINESS SCHOOLS
To answer the question about how top business schools are addressing climate-related issues, Sundaram, working with staff from the National Research Council, examined publicly available information from the websites of a convenience sample of 13 business schools (see Table 4-1):
- Every school addresses the topic in some fashion, either directly or under the banner of sustainability or energy.
- A vast majority of schools cover it in a course on environmental sustainability or energy economics (which address a broader set of topics than just climate).
TABLE 4-1 Climate Change Education-Related Activities at 13 Selective U.S. Business Schools
|Climate-Focused Classes||Academic Centers Focused on Climate, Energy, or Sustainability||Climate, Energy, or Sustainability Specializations or Dual-Degree Opportunities|
|Harvard Business School||—||Yes||—|
|Yale School of Management||—||Yes||Dual degree|
|Stanford Graduate School of Business||—||Yes||Dual degree|
|Columbia Business School||Yes||—||—|
|Haas School of Business, University of California Berkeley||—||Yes||Yes|
|University of Chicago, Booth School of Business||—||—||—|
|Tuck School of Business at Dartmouth College||Yes||Yes||Dual degree|
|MIT Sloan School of Management||—||Yes||Yes|
|Kellogg School of Management, Northwestern University||—||—||—|
|Ross School of Business, University of Michigan||—||Yes||Dual degree|
|Wharton School, University of Pennsylvania||—||Yes||Yes|
|Darden School of Business, University of Virginia||—||Yes||Yes|
|UCLA Anderson School of Management||—||—||Yes|
aNone is exclusively climate-focused—all address broader issues of environmental sustainability, with climate as a portion.
SOURCE: Sundaram et al. (2013).
- Two schools (Columbia, Dartmouth) offer (half-semester) courses devoted exclusively to climate change, and both of these courses were taught within the context of finance.
- Topics are typically covered in the field of corporate strategy, finance, economics, or public policy.
- Every school offers a myriad of extracurricular activities and/or student organizations focused on climate, energy, or sustainability.
Many schools provide opportunities for students to specialize in fields related to climate change. For instance, the Wharton School offers majors in Environment & Risk Management, Sustainable Business, and Renewable Energy Management; MIT and University of Virginia offer a Sustainability Certificate; and University of California, Berkeley, provides emphases in Corporate Sustainability, and Energy & Clean Technology. Another mechanism for infusing climate change into the curriculum is dual-degree opportunities (e.g., Columbia, Dartmouth, Michigan, and Stanford). Extracurricular activities for students, research coordination between faculty, and instructional material development (mostly cases) are aided by centers and institutes (e.g., Harvard)that provide an institutional home and visibility to the inclusion of climate change, sustainability, and energy as cross-disciplinary topics at business schools. None of the 13 business schools, however, infuses climate change as a specific topic into the core curriculum.
The findings of this limited landscape study were consistent with Genevieve Patenaude’s(2011) conclusions that climate change does not feature in top MBA programs overall, or even in programs that focus on stewardship. Patenaude (2010) remarked earlier that “thousands of courses that focus on social and environmental stewardship, offered by MBA programs around the world, are listed in the Beyond Grey Pinstripes survey […] Even among these, only 14 have ‘climate change,’ ‘global warming,’ or ‘carbon’ in their titles, and these are mainly electives that reach only a small fraction of students.”
Sundaram provided a closer analysis of the two courses that explicitly address climate change: his own course at the Tuck School of Business at Dartmouth College entitled “Business and Climate Change” and a course at the Columbia Graduate School of Business titled “Carbon Finance.” The goals for the Business and Climate Change course include
- developing awareness of climate change and the opportunities/challenges it presents for leaders of shareholder value-maximizing businesses;
- understanding the emerging “climate economy” and what it means to a company, its industry, and the global economy; and
- developing frameworks to assess the market value consequences of firms’ exposure to climate change, their fossil fuel use, carbon footprints and greenhouse gas emissions; and economic analysis tools to assess impacts of likely regulatory responses to climate change.
The goals for the Carbon Finance class at Columbia include
- understanding the scientific issues underlying climate change;
- analyzing which financial tools have been used to date, and their relative effectiveness in combating climate change; and
- evaluating financial tools and strategies that might be used in the future, in the context of a carbon-constrained global economy and national and international policy developments.
Sundaram remarked that the courses resemble traditional finance classes, but cover core concepts in finance within the context of climate change. They provide students with concrete tools in finance, with the driving question of how to increase shareholder value. He then provided a brief analysis of two other courses, one at Harvard and one at the University of Michigan, that include climate change within the larger context of environmental concern, resources, or sustainability. The goal for Harvard Business School’s “Environmentally Sustainable Strategy and Operations” course overall is to help students judge company effectiveness by
- understanding or navigating strategic and operational challenges posed by problems like climate change and water shortages, as well as emerging regulatory threats and activist pressures;
- identifying how these issues provide opportunities for competitive advantage by increasing revenues, reducing costs, mitigating risks, and raising rivals’ costs; and
- learning how to respond to growing demands from buyers, investors, and activists for greater transparency and accountability for the environmental impacts of their companies’ operations and supply chains.
The goal for the University of Michigan Business School and Erb Institute’s course “Strategies for Sustainable Development” is to discuss key aspects of business within the context of climate science, and includes
- framing sustainability in the language of business;
- identifying the roles that consumer demand, regulatory compli-
ance, cost of capital, and operational efficiency play in corporate sustainability;
- describing how sustainability has impacted corporate strategies and structures;
- applying mainstream business concepts to sustainability issues as they relate to the corporation; and
- explaining how “being green” fits in with the profit maximization objectives of the business organization.
Sundaram noted these courses all frame climate change or sustainability as a business, rather than a corporate responsibility, issue. Various panelists affirmed the perspective that climate change provides an important context within which concrete management skills and tools can be taught.
Sundaram discussed the relationship between course design and student experience (see Figure 4-1). Individual courses that offer bundled or focused content on one end of the spectrum contrast with infused content across the curriculum. The former provides opportunities for understanding the role of climate change in considerable depth, but invariably focuses on a limited range of business issues (such as finance). The latter
FIGURE 4-1 Relationship between course design and student experience in addressing climate change at business schools.
SOURCE: Sundaram et al. (2013).
allows students to see the implications of climate change across business issues (finance, strategy, operations, etc.), but breadth occurs at the expense of depth and specific capacity development. Expertise in climate science and climate change might be limiting the ability and willingness of faculty to tackle the topic in the classroom. Developing this expertise might be time-consuming or otherwise prohibitive, although it allows focused and highly controlled coverage of climate change within the context of the course. Relevant expertise can be brought in from the outside (e.g., via co-teaching), though content might then be less specific or targeted, and business school instructors might have less control over the content. These two dimensions (infuse across the curriculum versus cover in a separate course, and in-house vs. external expertise) create four quadrants. Which (combination) of those quadrants might best address the needs and specific goals of a particular business school, he explained, will vary by local conditions.
Sundaram closed by reflecting on what seems a common trajectory for addressing cross-cutting concepts in business schools, such as globalization, the digital economy, or business ethics, and he predicted that climate change would go through a similar transition. First, the issue is introduced via elective courses, then becomes infused into the core, where it gets recognized as a stand-alone class, only to get embedded more broadly again across the curriculum (and not offered as a separate core course), perhaps ending up as an expanded set of electives. Sundaram predicted that the idea itself, if salient enough for future business leaders, would ultimately persist in the overall education of business school students if supported by a strong conceptual framework, rapid development of high-quality classroom resources (including cases), and original research. At the moment, he said, too much data around the intersection of climate change and business strategies are missing or inaccessible (proprietary), slowing down current research and therefore the stream of scholarship needed to support the teaching of climate change-related issues in many business schools.
Sundaram noted in this context that business schools are about wealth creation, and they can address two levers of climate change: the energy content of the economy and the carbon content of energy. Business schools cannot (and therefore should not attempt to) tackle other important components of the greenhouse gas emission issue, such as population growth. He said that three key strategies form a conceptual framework around climate change and business: (1) burn fossil fuels more efficiently or more carbon productively, (2) shift to nonfossil fuel sources, or (3) capture carbon dioxide before it is emitted and “put it away for good.” He mentioned that this framework requires a functioning global market of carbon dioxide emissions.
Melissa Paschall described the 2.5-year-old Business and Environment Initiative at the Harvard Business School (HBS) as a relatively new player in the arena of climate change and sustainability research and education of a general business school. Organized in a similar way as the established Global Initiative, Entrepreneurship Initiative, and Leadership Initiative, it received instant recognition within HBS.
The initiative focuses on developing and making available free online resources, such as environment-oriented cases, or entire course modules for 4-6 weeks of course material. The initiative has embedded around 15 cases across the required curriculum, some specific to climate, but others with a broader environmental focus. Paschall noted that getting environment-oriented cases into required courses was only part of the challenge: keeping them there is equally difficult, due to overall changes in the mix of cases and the need for interested and capable instructors. In addition to inserting relevant cases into required and elective courses, the initiative works toward embedding climate or environmental aspects into field-based experiences. A student advisory group provides helpful intelligence on current teaching practice for environmental cases and suggests new opportunities for inserting relevant cases or modules into the curriculum. Aside from influencing the curriculum, the initiative is engaged in extracurricular activities and provides the institutional hub for a community of practice around teaching and research on environment-related topics.
Eric Orts described the Wharton School’s Initiative for Global Environmental Leadership, which originated with an internal competitive grant from the provost. The initiative now sustains itself with funding from private sources, in part from a corporate community that understands the relevance of sustainability to their businesses. Orts underscored a previous comment that the private sector and students might be more attuned to sustainability questions than academe. The initiative focuses on curriculum change, research, and outreach. Through outreach, business representatives and academics come together to identify “big issues” in the intersection of business and environment. He argued that success for such initiatives depends on partnerships within the university and support from the university’s leadership, but that an engaged student body is equally important.
Dan Reicher described the Center for Energy Policy and Finance—a collaboration between Stanford’s business and law schools. It tries to emulate the creativity in technology development by developing new policy and finance tools for funding energy projects, tools that bridge the “valley of death” between early development and commercialization. Aside from overseeing research, Reicher also co-teaches a course on finance with climate change as a significant element. The center works
across the entire university on extracurricular issues (e.g., a presentation by the two pilots who first flew a solar-powered plane across the United States). Reicher argued that initiatives like his need to fit in with the predominant culture of their host universities.
Jacob Park corroborated Reichert’s comment about institutional fit. He said the comparative advantage of teaching climate change at a small liberal arts college lies in the “high touch” (small student/teacher ratio) and the ease of collaborating with colleagues. Park explained that community-based service learning, where students solve problems at local businesses, government agencies, or nonprofits, allows for field-based work that is innovative, relevant, and not too expensive, and, while not unique to his school, is far easier to implement at a small liberal arts college than within the context of a major business school. Aside from cost, he identified sufficient numbers of appropriate faculty as one of the main barriers, but also reflected on the tension or trade-off between academic rigor and societal relevance. Park questioned whether, in pursuit of rigorous peer-reviewed journal articles, academics are creating relevant work that serves students.
Andy Hoffman explained that the University of Michigan’s Erb Institute offers a dual-degree program where students could earn an MBA and a Masters in Natural Resources within three years. The institute itself provides a sound institutional support structure through its considerable endowment and a faculty champion. Hoffman stated that it would be “deadly” to frame the relationship between climate change and business as corporate social responsibility. Instead, climate change and sustainability are taught at his university as shifting markets, consumer demand, operational efficiency, compliance, etc., in other words, core concepts that are at the heart of a business school education. Hoffman agreed with previous panelists that students are a force for change. He said the possibilities for cross-disciplinarity are enormous. As an example, his course in green construction was listed in three different schools within the university. He also stressed the benefit of working with external science partners to ensure that data on the “materiality” of doing business can be used effectively in making business decisions. Hoffman also reiterated the need to challenge students while providing a balanced perspective, in part by bringing in outside speakers who represent the spectrum from conservative to liberal on climate change, and he wondered whether the question of core versus electives should be amended by also asking where innovation might most likely be coming from.
WHAT WORKS, AND WHAT DOES NOT?
Hoffman summarized four options for addressing climate change in the business school curriculum: (1) offer a course in the core curriculum, (2) provide elective courses, (3) infuse climate-relevant ideas throughout the curriculum (e.g., via cases), and/or (4) provide a range of extracurricular activities. He then challenged the panel to advise a faculty member on key concepts to provide business students with climate change-relevant skills and knowledge. The panel generated the following ideas:
- Find other allies on the faculty, whether in law and ethics, economics (externalities, discount rates), operations, supply-side management, or finance.
- Find solid financial support, whether through the dean, outside funding, or donors and benefactors.
- Ensure sustained student interest and focus any course on providing students with tools and frameworks for better managerial decisions.
- Think about a sideways approach if appropriate, for instance, in a “clean technology course” where climate change is not addressed directly, but as part of a broader question on “how to make money addressing this by approaching it in a politically viable way.”
- Include “real world” people who work on these issues and have them interact with students.
- Connect the issue of climate change with the core identity of the school, such as innovation in Silicon Valley, where Stanford in located.
- Affirm the need to offer something to students. Once affirmed, ask how it can be accomplished and what resources are needed.
- Get a basic education in climate science.
- Do not require faculty to teach potentially controversial issues if they do not want to or feel that they cannot teach such a topic.
- Build excitement about the saliency of the issue and be passionate about the issue: Students get it when teachers are passionate and inspiring.
- Make it seem important and not peripheral. Student interest can decline if a course, program, or school indicates that the issue is not considered important or essential.
CLIMATE CHANGE AS PART OF BROADER SUSTAINABILITY, OR AS A SEPARATE TOPIC?
Hoffman asked the panel about the pros and cons of addressing climate change directly versus under a broader framework, such as sus-
tainability, or a recognized issue, such as energy. The panel offered the following thoughts:
- It depends on what the possible taboo issues might be, where you are, and what you represent. Climate change can be addressed indirectly through a range of topics, from emerging markets to operational efficiency, and can get connected to business opportunities.
- As long as climate change is not perceived as value-neutral (in the United States), it may be problematic to address it directly in many business school contexts. A sustainability frame might be more productive in many contexts, although “sustainability” itself might be considered controversial and difficult to conceptualize.
- The perspective should be focused on finding solutions to problems, rather than discussing the problem itself, and ensuring that the framing resonates with students.
- The difference with the European (or international) perspective, where climate change is seen as part of sustainability and where other environmental topics also receive considerable attention, should be kept in mind. In the spirit of systems thinking, climate change can serve as the gateway into other global issues, like water availability, and vice versa.
Responding to a workshop participant’s question, the panel speculated that interest in climate and sustainability might be highest among undergraduates and lowest in participants who attend executive programs. MBA students may wonder about the payoff in learning about climate change, and PhD students might worry about their professional identity and their chances on the academic job market.
A workshop participant wondered how faculty can help students go from recognizing the problem to empowering them to work towards solutions. Panel members said students could get excited about becoming part of the solution while being successful in business. For younger students, climate change and sustainability will be a far more salient issue over the course of their careers. Already 50-60 percent of Standard & Poor’s-listed businesses employ a chief sustainability officer. However, the issue was raised whether practitioners who are teaching practice-oriented courses at universities that can sometimes be quite exciting to students are tapping sufficiently into the scholarship published in academic journals, and how to bridge the gap between research/theory and the practice entrepreneurs.
Various workshop participants asked how to bridge between academic silos within business schools (or academia in general). Paschall
agreed that it is difficult not to be siloed, but centers and initiatives can serve as conduits and incubators for collaboration and cooperation. Reicher affirmed that this occurs at Stanford, where cross-disciplinary work ensures access to needed expertise. He also offered a different perspective on silos as obstacles for tackling broader issues such as climate change. He said climate change might serve as a means to finally address academic issues around siloing or the debate between rigor and relevance (i.e., the question of well-researched theoretical frameworks versus using ad-hoc solutions to address real problems and challenges).
Another endemic problem in academia that can stand in the way of addressing climate change more broadly in education and research at business schools is the process for promotion and tenure, Reicher added. Orts offered that focusing on controversial issues or trying to change university culture might best be reserved for post-tenure, and that junior faculty has to consider the predominant culture while pursuing what they feel passionate about. He suggested that junior faculty find like-minded faculty members, think about connections to mainstream areas of business, find ways to publish in respected (high-impact) journals, and think about quality scholarship while focusing on salient issues.
A question about basic science literacy led to divergent perspectives from the panel. Some called for basic understanding in order to locate business decisions within the context of climate change, while others pointed out that a more in-depth understanding of climate science might not be necessary, particularly when this expertise and knowledge can be brought in through collaboration and cooperation. For example, Hoffman wondered whether a company that produces electric vehicles needs to understand climate change or would be better off with a deep appreciation of market fundamentals to succeed. If he had to choose, he said he would prefer the latter even as he understood the importance of the former. Hoffman then reflected on the use of the term “climate change” within the business school context and provided an analogy from social change research. He stated that when the gay community was “in the closet,” no social change toward stronger equality and inclusion could occur. He said that while at times unpleasant, retreating from the term would mean postponing the time when the issue will become mainstreamed within U.S. business schools. He suggested combining discussion about the science of climate change with discussion about what the business community and individual businesses could do about it. Sundaram offered that the science behind climate change is important, but uncertainty persists about when to take what action. Yet, finance and economic research deal with issues of risk and uncertainty all the time. Ultimately, he said, climate-related questions fit very well into a business school curriculum that teaches students how to grapple with uncertainty and risk.
This page intentionally left blank.