Business Schools Must Do More In Fight Against Climate Change, Experts Say

Professors and leaders from eight leading business schools in Europe, including IE Business School, HEC, and INSEAD, are calling on all business schools to play a bigger role in addressing the climate crisis.

“As organizations with missions to improve the practice of management, business schools must do much more to raise awareness of climate change in the business community and to show how business and management can address the challenges climate change presents,” the authors write in a letter published by the Harvard Business Review.

EXPERTS IN BUSINESS TRANSFORMATION

In the letter, the authors highlight that B-schools can greatly aid companies in transforming their business models to be more sustainable in the fight against climate change.

“These topics sit at the core of most of our teaching and much of our research, as well as the work we do in executive education,” the authors write. “And while we are not experts on climate science, many of us sit within universities where this expertise resides and have access to cutting edge, relevant knowledge, technology, and innovation. We have the potential to marry the expertise of our business faculties with the content expertise of scientists and engineers, and the practical expertise of the businesses with whom we interact daily.”

CHANGING BEHAVIOR THROUGH MARKETING 

A big part of change is through consumer behavior. Business schools, the authors argue, can utilize their marketing expertise to do their part in encouraging climate-friendly consumer lifestyles.

“With their deep understanding of consumer behavior and marketing strategies, business scholars can show businesses how to motivate consumers into adopting more planet-friendly desires and habits,” the authors write.

INCENTIVES AND GOVERNANCE

For decades, B-schools have focused on strategies to improve shareholder value. But what if, instead, they focused on their efforts on changing how corporations approach climate change?

“How can we use our insights — for example changing executive compensation or board structures — to improve the governance around moving companies to accelerate decarbonization?” the authors write. “Going beyond a single firm, how might we help design models and mechanisms for business collaboration that are effective and do not run afoul of anti-trust rules or lead to greater rent seeking behavior? How do we measure the effectiveness of these collaborations? In terms of even larger incentives, how can tax systems be used to change corporate activity with respect to climate change?”

Sources: Harvard Business Review, United Nations Climate Change