Business schools are placing a greater focus on Environmental, Social, and Governance (ESG) issues in their MBA programs.

Courses in climate finance, impact investing, and social entrepreneurship are now some of the most popular choices for students in MBA programs. The New York Times recently looked at how and why ESG has blown up in business schools across the nation.

“There’s been an explosion of interest from students,” said Todd Cort, a lecturer on sustainability at the Yale School of Management and the co-director of the school’s environment and business center, tells NY Times.

A CHANGE THAT’S HERE TO STAY

Experts say the rise of ESG in recent years signals a paradigm shift in the world of business—one that places a greater emphasis on deciding who businesses truly serve.

“While the business school remains a bastion of free markets, it has also started to teach its students about environmental, social and governance issues — including the importance of serving ‘stakeholders’ such as customers, employees, and communities rather than just shareholders,” Gillian Tett, of Financial Times, writes.

In response to the rise of ESG, business schools are also shifting how they teach business in MBA programs. At Harvard Business School, Vikram Gandhi, a Wall Street veteran, helped develop the B-school’s first impact investing course in the MBA program.

“We have written more than two dozen new case studies [for the course],” he tells Financial Times. “We, like others, recognize that ESG isn’t a fad — it’s part of a long-term trend.”

A LONG ROAD AHEAD

While interest in ESG has grown in recent years, talent recruitment is still relatively small—especially when it comes to more mid-and senior-level roles. That’s in large part due to the novelty of the field.

In June, PwC announced that it would create 100,000 new positions over the next five years, with many jobs focusing on topics such as climate change and sustainability. But recruitment is challenging.

“There are not enough people today that know about E.S.G. challenges to meet the demand that exists,” Richard Oldfield, PwC’s global markets leader, tells NY Times.

Sources: The New York Times, Financial Times

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