Business schools must do more to tackle the climate crisis

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Business schools have a lot to contribute to the fight against climate change. They are experts in organizational transformation, performance measurement, operations, marketing, leadership and governance. A group of eight business schools have come together to find ways in which business schools can work together to forge a community of responsible and educated business leaders.

In addition to government leaders and NGOs, businesses and academia were well represented at COP26. There were plenty of scientists and CEOs in evidence. Yet one group was particularly absent from conversations about climate action: business schools.

Although evidence of climate change has been emerging for more than four decades, business schools have been slow to recognize and respond to this pressing and existential problem. For some, there are political concerns – many top schools are based in the United States, where climate change has been politicized, making it harder to tackle the issues head-on. Management scholars may also feel underqualified: climate change is not a typical area of ​​academic expertise for business schools. And there are deep competitive challenges that demand the attention of business professors and students, including digital transformation and AI, which represent more comfortable territory for management academics.

But these are not excuses. As organizations with a mission to improve the practice of management, business schools need to do much more to educate the business community about climate change and show how business and management can meet the challenges that change presents. climatic. We can contribute a lot:

We are experts in business transformation

Climate change is causing unprecedented changes, forcing companies not only to launch new products and services, but also to evaluate and adopt new practices. How will companies be able to sufficiently and quickly transform their economic models, their mental models and their cultures? These topics are central to much of our teaching and research, as well as the work we do in the area of ​​executive education. And while we are not experts in climate science, many of us sit in universities where that expertise resides and have access to cutting-edge and relevant knowledge, technology and innovation. We have the potential to marry the expertise of our management faculties with the content expertise of scientists and engineers, and the practical expertise of the companies we interact with on a daily basis.

We are experts in measuring performance and return

Businesses need to understand how their inputs and outputs, as well as their product and financing markets, are affected by climate change. What set of measures – both for external and internal reporting – will ensure that companies, investors, consumers and others have solid and reliable information on which to base their decisions? How will financial markets factor emissions and other climate factors into asset prices? How will we tell the difference between firm and meaningful action and green-washing or, less cynically, green-wishing? The announcement of the International Sustainability Standards Board at the COP means that we must not only advance our thinking on the materiality and reliability of climate accounting, but also train a generation of auditors who can attest to the reliability of the data. that we produce. How will we restructure capital offerings and risk management processes to reflect climate forces?

We are experts in operations management

The climate footprint of many companies in many sectors extends beyond their borders and is distributed across their entire value chains. It is difficult, if not impossible, to exert direct influence on distant suppliers, customers or partners. Yet we have a vast knowledge of how incentives, contracts and collaboration work within value chains, as well as the technical aspects of managing and optimizing operations. How can companies work across their value chains to create collective, effective and efficient reductions in climate impacts? In what ways could they reorganize their process flows and supply chains to both decarbonize and be better positioned to adapt to extreme weather fluctuations? How do companies realize the benefits of circular approaches to resource consumption and simultaneous climate mitigation?

We are marketing experts

The consumption patterns of the past decades in developed and developing economies contribute directly to the climate emergency. How can companies (and governments) develop marketing strategies to wean consumers and businesses off carbon-intensive lifestyles, for example by encouraging them to use zero- or low-emission mobility solutions? With their in-depth understanding of consumer behavior and marketing strategies, academics can show companies how to motivate consumers to adopt more planet-friendly desires and habits.

We are experts in organizational leadership

Leadership is central to all business schools, along with fundamental ideas about organizational change, organizational design, meaning-making, and more. How will these leadership models need to be adapted as we reflect on the challenges of massive long-term climate impacts? Can we think differently about our patterns of organizational adaptation, many of which emerged under completely different conditions and are no longer suitable? Systems change and collaboration will require systems leaders who work across boundaries.

We are experts in incentives and governance

Along with our law school colleagues, business scholars are actively exploring issues of governance and oversight. Over the past few decades, we have focused on how to create powerful governance mechanisms and incentives to improve shareholder value. How can we use our knowledge – for example by changing executive compensation or board structures – to improve governance around companies moving to accelerate decarbonization? Beyond a single company, how can we help design business collaboration models and mechanisms that are effective and do not violate anti-trust rules or lead to more rent-seeking behavior? significant? How do we measure the effectiveness of these collaborations? In terms of even bigger incentives, how can tax systems be used to change business activity in relation to climate change?

The business school sector has a lot to build on. Pioneering researchers have long focused on environmental and sustainability issues. There has been a dramatic increase over the past decade in the attention paid to climate change by business academics, encouraged by editorial statements and special issues in leading journals in each of our disciplines. In the classroom, these issues are increasingly discussed in core and specialty courses, representing significant changes to the curriculum and supported by our accrediting bodies. Rankings and awards for business schools tackling these issues are also on the move.

But we have a duty to do more. If businesses are to take the lead on climate, so must we, however uncomfortable that may be.

Hailing from eight traditionally competitive business schools in Europe, we and our deans have united to accelerate action towards the goals of the Paris Agreement and the United Nations Framework Convention on Climate Change across the world. Business Schools for Climate Leadership initiative. We believe that a collaborative impact will exceed the sum of our individual school’s contributions to forge a growing community of responsible and educated business leaders. Implementing system change typically requires cross-sector collaboration; the urgency of the climate crisis requires business schools to experiment with new ways to collaborate quickly and effectively.

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