The corporate world’s triple bottom line enthusiasts sweep the campus of IE Business School each year before Christmas for one of sustainability's big annual bashes. Now in its tenth year, the Social Responsibility Forum has come on leaps and bounds.
International institutions like Deloitte, EY, McKinsey and Telefonica were there in force. These businesses are trying to create economic value and contribute to society at the same time.
The pursuit of profits, people and planet reflects the broader quest for impact among business schools and big business this past year.
Once a niche practice, sustainability is poised to become mainstream among those in the “millennial” generation who place more value on fulfilment than salary.
Ilian Mihov, dean of leading global business school INSEAD, says that his ambition is to develop business as a force for good.
He notes the positive correlation between business development, job creation and economic growth – and the increased living standards and peace and stability that they promote.
“This subject has the potential to fundamentally transform economies for the better and change the course of history,” he says.
INSEAD set-up the Emerging Markets Institute, a think tank on issues related to economic development and management. It aims to contribute to the growth and development of economies, says Paddy Padmanabhan, the institute’s academic director.
This is just one example of how sustainability is making its way into the world’s leading business schools. Another is the new MBA concentration launched this month by Boston University School of Management in environmental sustainability.
The program seeks to examine the changing relationship between businesses and the natural environment. “Business leaders will increasingly be faced with the realities of a changed business landscape,” says Kira Fabrizio, Boston assistant professor.
Georgia Tech’s Scheller College of Business last month launched a new MBA track in strategic sustainability.
Georgia says the concentration will help students gain an understanding of sustainability trends and innovation, and opportunities related to government policy and environmental concerns.
Firms that are sustainable have been shown to be more innovative and adaptive to their environments, and experience less financial and reputational risk.
Innovation is a theme business schools are keen to explore. The Institute for Social Innovation at ESADE Business School seeks to develop skills within the business community to strengthen their contributions to a more sustainable world.
In December it held the Social Investment Forum, organized by ESADEBAN, ESADE’s alumni investor network, with five sustainability projects raising €900,000 in funding.
Fernando Zallo, director of ESADEBAN, says investors are displaying a growing interest in ventures that have a social impact, with measurable economic benefits.
“What seemed like a utopian dream just a few years ago is now becoming a reality,” he says. “Companies in the category of ‘social businesses’ are now being analysed as investment opportunities.”
Entrepreneurship with a social edge is also now a focus area for MBA students and their schools.
IESE Business School last year launched a new MBA elective that focuses on social entrepreneurship, to help students develop strategic business models that combine both financial and social value.
Professor Antonino Vaccaro, who teaches the program, says that social impact has to go beyond corporate social responsibility and companies are beginning to realize this.
“They’re also discovering that a social focus makes them more competitive,” he adds.
Impact investing has been an area of growth for companies and business schools are training students to be able to lead in this space.
The Global Alliance for Clean Cookstoves (GACC) is an initiative led by the UN Foundation that provides grant funding and technical support to social enterprises.
It has partnered with five business schools to form investment committees – which include MBA students – that advise on its $6 million-plus investment fund. One of those schools is the Middlebury Institute of International Studies.
Yuwei Shi, dean of the business school, says that this is a valuable opportunity for students to gain both impact investing experience and knowledge of the adoption of technological innovations in developing markets.
Companies that promote sustainability are often able to attract and retain employees more easily. For those hoping to hire MBAs this may now be more important.
INSEAD’s Emerging Markets Institute recently surveyed 16,000 people who are of MBA student age and found that the majority value work-life balance and personal development over money and status.
According to a recent global survey of business executives by Saïd Business School and EY, the consultancy, 87% of the executives say companies perform better if their purpose goes beyond profit – including generating positive social impact.
“Purpose and meaning have an important role as a strategic, transformational element in business today,” says Cheryl Grise, EY global advisory strategy leader.