How U.S. business schools are failing on climate change
Coca-Cola and Nestlé recently have closed facilities and Starbucks is bracing for a global shortage of coffee — all due to effects from climate change. Climate change impacts every resource used by businesses: from agriculture, water, land and energy to workers and the economy. No business will be untouched.
As a researcher and a professor of business management, I have found that sustainable business courses across the U.S. do not align with the scientific consensus that we need radical change to avert disastrous consequences of climate change.
These future business leaders are not being prepared for the climate change challenges their companies are certain to face.
Sustainability in business
The world’s climate scientists (PDF) have determined that our best chance to avoid the most dangerous effects of climate change is to keep rising global temperatures to no more than 2 degrees Celsius. They also determined that the world needs dramatic reductions in greenhouse gasses to hit that goal.
California, for instance, has imposed stringent laws on clean air, vehicle emissions and energy efficiency standards. The state also mandated a 40 percent reduction in greenhouse gas emissions by 2050. California has proven that reductions are possible — while maintaining a healthy economy.
In the U.S. and worldwide, business and industry are the primary sources of greenhouse gas emissions, contributing anywhere from 6 percent for buildings to 25 percent for electricity production globally.
Reducing carbon emissions is the most common sustainability goal for companies. Many companies do this by becoming more energy efficient and reducing waste. But, as a whole, corporate sustainability efforts are best described as business as usual, with only small gradual improvements being made. Businesses are simply failing to grasp the deep change that is needed.
There is a huge gap between the path we are on and where the science shows we need to be. The 2015 Paris Agreement (PDF) outlined an international agreement to keep the average global temperature increase within 2 degrees Celsius. To achieve this, science tells us that we need to restrict total emissions to no more than 1 trillion metric tons, a reduction of 49 to 72 percent (PDF) globally from 2010 levels. The U.S. agreed to a 26 to 28 percent national reduction of emissions by 2025. By some estimates, the U.S. must double its current efforts to reach that target.
Companies need to work within this scientific "carbon budget." There is, indeed, a small group of businesses setting ambitious targets that are consistent with the science.
For instance, Coca-Cola and Dell have agreed to a 50 percent reduction within their companies by 2020, and NRG Energy has committed to a 90 percent reduction by 2050. By contrast, 90 percent of Wal-Mart’s environmental impact exists in its supply chain. So, one of Wal-Mart’s goals is to use its expertise to work with suppliers to reduce its emissions by 1 billion tons between 2015 and 2030. This is more than a 4,000 percent increase over its prior target of 22 million tons between 2010 and 2015.
These bold reduction goals have not yet been adopted by the vast majority of businesses.
Sustainability education in U.S. business schools
The lukewarm corporate commitment to sustainability is, perhaps, unsurprising. One contributing factor may be the way in which corporate leaders are trained (PDF) in business schools.
A study of 51 of the hundreds of business programs in the U.S. found that when an introductory sustainable business course is offered, it often remains an elective in the business school curriculum. Only a few business schools offer minors, majors, certificates or graduate degrees in sustainability management or sustainable business.
The 51 schools in our study are actually at the forefront of training students in environmental sustainability — that is, compared to most business schools, which do not offer sustainability coursework at all. What we found is that even these schools are doing a poor job of preparing their students for the future.
We analyzed the reading lists of 81 introductory sustainable business courses, which resulted in a final list of 88 readings. Because sustainability is still an emerging discipline in business education, we found limited overlap in the readings or authors assigned to students. Across the syllabi, there was only 20 percent overlap in readings — very little consensus as to what actually should be taught.
We also found that the majority, or 55 percent, of sustainability readings assigned to business students took a weak sustainability position. The readings take a business-as-usual approach that makes small gradual improvements, pointing to examples such as the printing ink industry’s move to soy- and water-based inks. This supports a "do less bad" approach to sustainability, a far cry from what science tells us is needed.
The readings communicated two reasons for adopting sustainability practices: either the business benefits of sustainability (increased innovation, competitiveness and profitability) or the need to do what is required by law (meeting labor, emissions or pollution regulations).
Only 29 percent of the readings assigned in our study acknowledged the scientific need for adopting sustainability practices.
Future business leaders must be equipped with the scientific understanding of how climate change is affecting business, how it will affect business in the future and the profound change required of business and industry.
Professors of these courses should assign readings that communicate the scientific need (PDF) for businesses to operate in a more sustainable way to address climate change. Such readings should note that "substantial changes (PDF)" in policies, institutions and practices are required.
Such education can help shift the focus and motivation for corporate sustainability away from legal compliance and corporate profit toward a need to repair the environment and live in balance with the natural world.