Five Business Schools for Environmentalists
Exploding Ford Pintos across America throughout the 1970s should have taught auto executives worldwide an unforgettable lesson: how swiftly social disapproval could destroy sales and stock prices. However, that’s a lesson the current generation of executives at Volkswagen never learned.
What triggered the collapses in Volkswagen’s sales and market capitalization in 2015 didn’t resemble all the injuries and lives lost due to fuel tanks mounted behind rear bumpers, as with the Pinto and the similar Mercury Bobcat. Nor was it anything like Ford’s shocking cost-benefit analysis arguing against the automaker’s recalling and repairing hundreds of thousands of fuel tanks. Detailed in the infamous “Pinto memo,” that study ruthlessly concluded the $11 per-car repair cost would far exceed the $49.5 million borne by the automaker to pay for the estimated 360 wrongful death and personal injury verdicts and settlements each year.
Instead, Volkswagen’s scandal blew up primarily because of an environmental sustainability issue. VW had intentionally programmed diesel engines with software that would only activate emission control systems during lab tests, but never during driving. Volkswagen deployed this software in about 11 million cars worldwide. Each car had been emitting roughly forty times the pollutants detected during lab testing.
The consequences suffered by Volkswagen were indeed staggering. The stock price fell by about a third immediately following news that regulators around the globe had launched investigations. Sales plummeted by 25 percent in the United States. And as of January 2018, VW had already paid $30 billion in fines, criminal penalties, and costs. One executive received a seven-year prison sentence in the United States.
The devastating effects of climate change on the environment have been well-documented. Besides warmer temperatures, they include melting glaciers, rising coastal sea levels, droughts, and changes in ecosystems that can diminish agricultural supplies. At a time when many policymakers around the world are so alarmed about these effects, many suggested that Volkswagen got off easy compared to the consequences they argue that the firm and its leadership should have suffered, especially from European regulators and courts.
The Corporate Knights Better World MBA Ranking
With increased international attention on climate change, it’s no wonder that business schools have started to train their students in environmental sustainability. Probably the most credible and unbiased monitor of this new trend is the self-styled “magazine for clean capitalism,” the Toronto-based Corporate Knights Magazine.
CK claims to reach “435,000 of the world’s most influential business and political decision-makers” as the largest circulating magazine focusing on sustainability and responsible business. Most Washington politicos should be familiar with Corporate Knights because Sunday editions of the Washington Post include the magazine four times annually.
For the past 16 years, the publication has ranked the sustainability performance of business schools. It lists the top results dating back to 2010 on their website. CK automatically evaluates all of the schools listed by the Financial Times 100 ranking, and invites participation from schools accredited by the AACSB as well as other international accreditation boards. The current 2018 ranking includes 141 schools around the world.
Corporate Knights Methodology
CK overwhelmingly bases their rankings’ methodology on research and teaching; these two factors account for 80 percent of a school’s score. Using public data, the publication weighs published peer-reviewed faculty research on sustainable development topics. This is 50 percent of a school’s ranking.
Next, based on website course descriptions, CK also assesses the percentage of a school’s required core MBA courses that “integrate relevant sustainable development themes.” This is 30 percent of the ranking.
CK also devotes 10 percent of the ranking’s weight to the number of research institutes affiliated with the business school with a sustainable development focus.
And in 2018, CK added new factors to their methodology. Two additional ratings more completely account for the “triple bottom line” business sustainability concept: social well-being, environmental protection, and economic performance. Some refer to this triad as the “three P’s,” or “people, planet, and profit.” CK’s new social factors assess diversity among the faculty; these two ratings of faculty gender and racial diversity account for 5 percent each.
One way to improve CK’s future rankings would be to account for a school’s online MBA curricula. After all, the new breed of online programs tends to be inherently more “green” because these programs don’t require energy for relocation or weekday commutes to campus. However, CK currently evaluates only the curricula within full-time on-campus programs, without considering the online curricula a given school offers.
For that reason, below we emphasize online programs by profiling four schools that Corporate Knights ranks highly, which also offer online MBA programs along with their full-time residential curricula. But first, we spotlight one university’s business school that deserves recognition as a worldwide model because it demonstrates such a superb emphasis on environmental sustainability.
The Premier Green Business School Program
Massachusetts Institute of Technology, MIT Sloan School of Management
MIT’s Sloan School of Management finished #1 in the Corporate Knights rankings of United States schools for two consecutive years, in 2016 and 2017. During the past four years the school has consistently ranked in the global list’s top ten, placing #8 in 2015, #2 in 2016, #7 in 2017, and #10 in the most recent chart.
In this Poets & Quants article, admission consultant Betsy Massar interviews Professor Jason Jay, the director of Sloan’s Sustainability Initiative, who explains some of the reasons why Corporate Knights and other authorities such as Net Impact have ranked Sloan’s program so highly.
To summarize, the primary curriculum for Sloan students interested in environmental and social impact is MIT’s sustainability certificate. This curriculum is a campus-wide program offered by the business school to all master’s degree candidates at MIT.
The sustainability certificate first requires a course in system dynamics, a foundation subject within the discipline. The program also requires the Sustainable Business Laboratory, a 13-year-old class where students work in teams on problems faced by real firms attempting to advance sustainability strategies. Coursework also includes a sustainability capstone class during students’ final term, along with a broad selection of sustainability electives.
Currently, one hot research topic within the Sustainability Initiative involves climate gentrification. First identified by Harvard researchers, this effect relates property values to climate change.
Unlike many areas of the nation, in southeastern Florida, low-income residents tend to live in higher elevation areas, while higher income residents live in luxurious waterfront properties. But before long, rising tides brought about by global warming will compromise many of those beachfront homes. Some forecasts warn that as much as half of Metropolitan Miami-Dade County will be underwater by the year 2100.
Soon, forgotten parts of the area could become hot commodities as developers bid up prices in newly desirable areas. However, that trend will displace longtime inhabitants. As portrayed in this video on the business school’s website, the Sustainability Initiative’s leaders traveled to Miami-Dade County In February 2019 to study climate-driven inequality first-hand.
Exceptional Green Business Schools with Online MBA Programs
George Washington University, School of Business
Corporate Knights ranked GWU #8 in 2016, #9 in 2017 and #13 in 2018 among U.S. schools. The school offers MBA students a wide range of course options that empower them to align their “personalized curriculum” with their professional objectives. That kind of customization provides a compelling advantage within a university with such rich instructional resources on sustainability.
The university’s emphasis on sustainability is vast and campus-wide, with approximately 470 courses addressing sustainability topics. We counted 20 such courses and three certificate programs in the business school related to sustainability that would be appropriate for MBA students, although it’s not clear from this list which classes GWU currently delivers online.
Nevertheless, GWU’s MBA program has an excellent track record at awarding credits for electives taken outside the business school. It would seem reasonable to expect that in a university with such a robust online division, enough graduate courses with a sustainability emphasis would be available online to fill up the 28.5 credits of electives—or roughly half of the instructional time—that’s required for graduation.
GW offers another competitive advantage relevant to students comparing MBA programs that can lead to sustainability careers. Located not far from Capitol Hill, the school may have institutional and professional relationships in the Washington, D.C. area that might benefit students seeking sustainability internships and jobs upon graduation.
University of Michigan, Ross School of Business
CK ranked Michigan’s Ross School of Business #5 in 2015, #12 in 2016, and #11 in 2017 among United States schools. And in the fall of 2019, the Ross School will make history as the first top-ten ranked business school to introduce an online MBA program, for which it is now accepting its first applications. Although the school initially announced plans to offer this new program in a blended hybrid configuration, it now appears from more recent reports that except for three required in-person residencies in Ann Arbor, this will be a fully online program with an average of four live synchronous events on video per course.
Michigan’s unique sustainability offering is the Erb Institute, a research and education center managed by a collaboration between U-M’s School For Environment & Sustainability (SEAS) and Ross. Students at Ross can earn a business sustainability dual degree, which confers both an MBA and an MS degree with only one additional semester of study.
In one of the more hands-on initiatives in graduate management education, Ross requires an immersive seven-week Multidisciplinary Action Project (MAP). In projects that can focus on sustainability challenges, students working in teams tackle complex business problems for a firm or nonprofit. “Students expand their skills and develop their leadership abilities; sponsors get usable recommendations from top minds,” says the school’s website.
It now appears that MAP will be just as much of a signature feature of the online curriculum as any other U-M MBA program. Dean Scott DeRue told Poets & Quants: “We have a deep commitment to action-based learning and MAP is one example of that in the online program. Students will work in small teams with faculty in organizations from around the globe just like professionals have to do today virtually. That is the world of work today.”
Duke University, Fuqua School of Business
Among United States schools, Duke finished #5 in 2017, #7 in 2016, and #10 in the current CK rankings. And yet one more reason why Duke’s global executive MBA may amount to the finest hybrid EMBA program available involves the school’s emphasis on sustainability.
The Fuqua Client Consulting Practicum (FCCP)—an experiential learning program similar to the University of Michigan’s MAP program—can provide opportunities for teams of students to work on sustainability issues for client companies and nonprofits. Also, the Fuqua School annually sponsors the Sustainable Business and Social Impact Conference (SBSI), the largest conference of its kind in the Southeast.
Moreover, Fuqua’s faculty leadership stems from the school’s award-winning research and education center, the Center for the Advancement of Social Entrepreneurship (CASE). The center prepares leaders and organizations with business skills they need to promote and achieve social change. CASE sponsors i3, a professional online training program for direct impact investing. The center also funds fellowships which allow students to explore social impact careers through internships without suffering financial hardship.
And according to Net Impact, CASE underwrites student loan forgiveness for students who accept jobs upon graduation at nonprofits, and has financed almost $2 million of student loan debt.
Pennsylvania State University, Smeal College of Business
CK ranked Penn State #15 in 2018 among American business schools. And much like MIT, Smeal has also devoted an entire website to showcasing its sustainability initiative, including their faculty’s current research projects.
Recently Smeal packaged their business sustainability strategy concentration, introduced late in 2013, for delivery within the school’s newly revitalized online MBA program. This specialization includes three courses: sustainability strategy development, strategy implementation and organizational change, and sustainable supply chain management. Starting in May 2019, Smeal will also make these same three courses available for graduate credit outside of the MBA program, branded as the online graduate certificate in business sustainability strategy.
The annual Smeal MBA Sustainability Case Competition, now in its sixth year, comprises a unique teaching event for students at other top business schools along with those at Smeal. During the competition, teams develop and submit analyses that demonstrate their skill at arguing a compelling business case for the integration of sustainability into a firm’s products, operations, or leadership. Semi-finalists then present their analysis to a panel of judges. Past competitors have included teams from Carnegie Mellon, Cornell, Purdue, the University of Texas and the University of Washington.