Making the Business Case for ESG
A new initiative at Georgetown University’s McDonough School of Business prepares students to be socially responsible leaders.
This post by Vishal Agrawal, the Henry J. Blommer Family Endowed Chair in Sustainable Business, first appeared on the AACSB Insights blog.
Companies competing in today’s socioeconomic context increasingly face urgent new environmental, societal, and governance (ESG) challenges that materially affect their operations and business models. If companies are going to thrive in this context, executives need to anticipate and respond to environmental and social sustainability concerns. They also must create value by incorporating sustainability approaches into their competitive strategies.
At Georgetown University’s McDonough School of Business in Washington, D.C., one of our goals is to prepare students to become the business leaders who will integrate sustainability into the overall strategy of their organizations. We want our students to consider the answers to a wide range of questions, including these:
- How do organizations make the business and financial case for sustainability?
- What sustainability metrics and processes do consumers care about, and how does this influence their purchasing decisions?
- How can business leaders manage global supply chains and operations, which have environmental and social impact across the world?
- How should a company articulate its environmental strategy? Should it collaborate or cooperate with competitors to work on big sustainability challenges?
- Should the responsibility for sustainability be embedded in every C-level role, or should there be a separate chief sustainability officer?
It is our observation that more companies are embedding sustainability issues into the responsibilities of functional managers, as opposed to creating a dedicated sustainability role. Therefore, it is increasingly important that all managers—no matter what their industries or areas of expertise—be trained in how to handle challenges related to environmental sustainability or social responsibility.
At the McDonough School of Business, we believe that it’s imperative that we impart these skills to all of our students. As a Jesuit institution, we must live up to our mission of training business leaders to have a positive impact on business and society. And, as a business school, we must keep an eye on emerging fields and prepare students across our programs to lead in these areas. Based on these principles, we recently launched a series of interrelated programs that are all part of our new Business of Sustainability Initiative.
Creating Value from Sustainability
The Business of Sustainability Initiative focuses on how managers can create long-term value by embracing opportunities and managing the risks that derive from economic, environmental, and social developments. While there are many reasons why an organization might care about sustainability—including ethical considerations or a personal or institutional desire for stewardship—this initiative focuses on business-related motivations.
These include the potential for reducing costs or long-term risks, developing marketing opportunities, differentiating the company, creating new revenue streams or business models, or ensuring the right to operate. The main aim of the initiative is to help future leaders identify how to adopt sustainability while also doing good.
Because business can play an important role in several areas related to sustainability, the Business of Sustainability Initiative brings together different areas of Georgetown McDonough, including marketing, finance, operations, real estate, and entrepreneurship. We also collaborate on sustainability and ESG topics with other faculty-led centers across McDonough, including Business for Impact, the Steers Center for Global Real Estate, and the Center for Financial Markets and Policy.
In addition, we take advantage of our location in D.C., which puts us at a unique intersection of business, policy, and society. For example, we have done consulting projects with the International Finance Corporation and the World Bank.
A Focus on Learning
The sustainability initiative is driven by the three main activities of any business school: teaching, research, and outreach. While the research and outreach activities are still in the early stages, many of our student learning opportunities are already in place, and they are designed to equip our students with the skills, knowledge, and experience to tackle sustainability-related challenges and opportunities for their organizations.
For instance, both the Certificate in Sustainable Business, which is geared toward MBA students, and the Sustainable Business Fellows program, which is open to undergraduates, require students to complete a series of courses focusing on different facets of sustainable business.
As an example, in the Sustainable Business Practicum elective within the MBA certificate program, students work on a real-world sustainability problem faced by a business, institution, or nongovernmental organization. Some students might analyze the economic or environmental potential of different business strategies related to business models, supply chains, or product development; others might develop marketing and communication plans that highlight a company’s sustainability efforts. Past clients include Mondelez, the World Bank, Framebridge, Abercrombie and Fitch, Sustainability Roundtable Inc., Wells Fargo, and Voya Financial.
In August 2022, we will launch a new offering, an M.S. in Environment and Sustainability Management. This joint degree is an interdisciplinary collaboration among the Georgetown Earth Commons Institute, the Graduate School of Arts & Sciences, and the McDonough School of Business.
The 11-month STEM-designated program recognizes that leaders need to understand both the science and business aspects of sustainability to lead successful companies. We expect it to attract two kinds of students—those who already are working in the sustainability space and would like to develop their business knowledge so they can better advance the business case for sustainability; and those who already work in business and would like to learn about sustainability.
The program will offer students a mix of courses and experiential activities to prepare them to advance sustainable business and environmental practices. Coursework will combine principles of environmental science with foundations in business management to enable students to become ethical leaders. In a capstone project, teams of students will work on real-world consulting projects with companies, NGOs, or institutions to apply their knowledge and gain valuable experience.
Research and Outreach
In addition to integrating sustainability into our coursework, we are making it part of our thought leadership efforts. Faculty across disciplines are conducting research into the challenges and issues of sustainable business.
For example, I hold an endowed chair in sustainable business at McDonough and direct the Sustainable Business Initiative, the MBA Certificate in Sustainable Business, and the Undergraduate Sustainable Business Fellows. With my research, I aim to inform practice on a variety of sustainability challenges related to supply chains, business model innovation, and the circular economy.
Safak Yucel, assistant professor of operations management, researches the economic and environmental implications of new business models in the context of renewable energy and sustainable technology. In marketing, associate professor Neeru Paharia focuses on how and whether consumers value sustainability practices. Amrita Kundu, assistant professor of operations and information management, conducts interdisciplinary empirical research related to environmental and social sustainability, especially in the context of emerging markets.
We also hope to translate and disseminate scholarship into accessible mediums for key audiences. We’ll reach alumni around the world through our magazine, newsletters, and social media, but we’ll also share research through our website, practitioner outlets, and media articles. Moreover, we aim to share knowledge by building community between students, alumni, and professionals whose work focuses on the business of sustainability.
Finally, we plan to disseminate knowledge through convening and outreach. We intend to engage with corporations, policymakers, and other organizations through events such as multi-industry conferences that bring together corporations, policymakers, and NGOs to discuss common themes around business and sustainability.
Through our Business of Sustainability Initiative and related programs, we hope to show how we are adapting to the ever-changing demands of the business world. We want to make sure that students across our academic programs have opportunities to participate in electives, pursue independent research, or engage in co-curricular experiences in the area of sustainability. And we expect to prepare our students to solve the world’s most complex issues through the lens of business.