Ethical Performance
inside intelligence for responsible business


Business awaits the sustainable generation

February 2012

Today’s generation of budding business leaders are much more likely to see sustainability as a cornerstone of their management agenda. Their real challenge will be promoting it in the corporate environment

They call themselves the first ‘sustainable generation’, but few would envy today’s crop of emerging business school talent.

Not only do they emerge from their MBAs and graduate placements facing a market struggling to keep its head above the murky waters of financial debt and uncertainty, but they must also confront the ecological debt amassed by the West, which has hungrily sought industrialisation these past 100 years.

And time isn’t on their side. By the time these twenty-somethings reach the height of their powers, both socially and economically ­– perhaps 20 years from now ­­– the world as we know it will be a very different place. The general consensus suggests that failing to adopt sustainable principles, practices and processes is not an option for businesses or individuals in the new paradigm.

So, what does this sustainable generation look like? And is it ready to take on the challenge of guiding the business world through this huge transition?

Niall O’Hea is unsure. As chairman of the Graduate Business Forum, a global network of present and former student leaders from the world’s top graduate business programmes, he questions whether tomorrow’s corporate leaders possess the urgency required.

“To move off oil will take 20 years. Change starts today, not in 20 years’ time,” he says. “There will be huge catastrophic shutdowns if we’re not ready for the change.”

Results of a recent study conducted by the satellite broadcaster BSkyB draws a more positive picture. Respondents – pooled from a cross-section of the UK’s graduate trainees, present and recently-graduated MBA students and high-potential middle managers earmarked for future leadership positions – certainly recognise corporate sustainability as a desirable concept.

Around 70% of them believe sustainability can create new opportunities for business. Two-thirds say adopting green principles can help to differentiate start-ups, and 66% argue that difficult economic conditions should not be an excuse for inaction on sustainability.

There also appears to be a growing aspiration among this new breed to place a higher value on a business’s green credentials when choosing where to work. Almost 80% say it is an important factor.

Michael Pruchniewski certainly falls into that category. Pruchniewski is a graduate of Rochester University’s William E Simon Graduate School Business Administration and now heads business development for the US paper manufacturer Sugarmade. He says: “A company’s direction as well as its value system is definitely important. I want to be in an environment where my company is creating some positive value.”

However, aspirations are one thing. Turning an acknowledgment of the challenge into action is a tougher nut to crack.

“The latest generation of potential leaders will have sustainability as one of the key cornerstones of their management principles,” says Mark Stoddard, editor of Business Leadership Review, the magazine of the Association of MBAs in the UK.

“But the real test will be to see whether sustainability remains a viable part of the agenda once faced with the real challenges of organisational leadership.”

BskyB’s research suggests formal training could be improved. Just 35% of the respondents said their employer or business school had provided adequate training on corporate sustainability issues.

The growing number of schools offering specific courses on sustainability themes – from the Sustainable MBA option at the Aarhus School of Business in Denmark, to Exeter University’s WWF-backed One Planet MBA – will help. And their popularity is growing.

For Stoddard, however, the challenge for business schools is in articulating, and then integrating, sustainability issues across the curriculum. “There is a real understanding of the need to ensure that sustainability is fully covered. But often it is not made explicit,” he says.

“The only way these issues can really be understood from a management education perspective is to ensure that it permeates all the traditional functions of management – from finance to HR.

“There is complete agreement that sustainability is essential, but a mixed view with regard to the training students receive. Some do it very well, some not so much.”

Internships are increasingly concentrating on this need to encourage a multi-function approach to the management of sustainability issues.

“University coursework can help equip MBAs with the foundational business skills they need for a successful sustainability career,” says Neil Hawkins, vice-president of sustainability at the Dow Chemical Group. “But it’s even more critical that these future leaders gain useful real-world experience.”

His company’s 12-week MBA Sustainability Leadership Internship Programme allows MBAs to learn about the company’s sustainability journey from a corporate, business unit function and geographic level – all the while exposing MBAs to various real-world situations and supporting a range of projects to find sustainability-related opportunities.

O’Hea believes that what is being taught in business schools, or internally, matters little because of the limited influence new recruits can have on entering a business on the first rung of the ladder.

“An MBA student will come out and usually go into a traditional large organisation which will have its own ideas of what sustainability means,” he suggests. “So you’re putting these individuals with new ideas into existing organisations and it’s a classic change theory. Can one new person change an organisation? It’s very difficult to be the rebel every single day.”

The positive impact of business school teaching can legitimately be questioned, especially in light of corporate scandals such as Enron in 2001, the instigators of which no doubt attended some of the world’s best business schools.

O’Hea compares traditional business schooling to the common chicken farm: “You get in, you get pumped full of information to pass exams, and then they say, ‘We need you to get a job to make our rankings look good – we don’t necessarily need you to think’.

“Is it the best environment for people to be prepared in the right way? For the one-year programmes, forget it.”

Peter McManners, a visiting fellow of Henley Business School, agrees, believing that most students “do not have the time or patience” to fundamentally rethink corporate models.

Getting sustainability centre stage at Henley has been “a fight”, says McManners. Too often it is seen as a reputation management concept and it has “been shoved off into a corner because it has failed to grab the attention”.

It is time to stop putting financial performance front and centre of business school education, he says, calling for a move away from shareholder value analysis to something focusing on value for all stakeholders.

He emphasises: “It’s as if the ethics of good management have been sidelined. Business schools need to accept greater responsibility.

“Post-Enron, people are gunning for business schools and the deans want to do something about it. They just don’t yet have a handle on what to do.”

For Pruchniewski, it is not up to business schools to create the change, but individuals. “It is up to the individual to put the pieces together,” he says. “There is no step-by-step guide to connecting business skills and sustainable corporate strategies.

“The role of business schools and MBA programmes may not necessarily be to transform corporate attitudes to environmental issues, but rather to raise awareness of sustainability’s place within corporations.”

As one particular respondent to the BSkyB research said, “the initial work on establishing sustainability as something worth tackling has already been done – my role will be to expand what my company does”.

As today’s business leaders continue to increase their focus on growing operations more responsibly, it will take a strong pipeline of next-generation leaders to advance this investment throughout this century.

Whether or not they are up to the challenge, only time will tell.

Global | Education

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