The Conversation - Nancy E. Landrum
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When the environment and businesses meet, who will make sure one doesn’t suffer at the hands of the other?
Lukas / Pexels, FAL
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Coca-Cola and
Nestlé have recently 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 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.
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Coca-Cola has had to close several plants due to water shortages and rising energy costs.
Reuters/Beawiharta |
Sustainability in business
The world’s
climate scientists
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 gases 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
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 one
trillion metric tons, a reduction of
49 to 72 percent
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 both 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 their emissions by
one billion tons between 2015 and 2030. This is more than a 4,000 percent increase over their 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 in business schools.
Although sustainability is a
growing theme in business school curricula, it’s still relatively new – and relatively uncommon. Business schools have been
slow to change and adapt.
For
our research,
we studied 51 of the hundreds of business programs in the U.S. We 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 the
majority of 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 different readings. Since
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 should actually 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 (i.e.,
increased innovation, competitiveness and
profitability) or the need to do what is required by law (i.e., meeting labor,
emissions or
pollution regulations).
Only 29 percent of the readings assigned in our study acknowledged the scientific need for adopting sustainability practices.
Preparing future US business leaders in sustainability
Even if we stop or reduce greenhouse gas emissions, global temperatures will continue to rise for
100 or
more
years due to carbon dioxide emissions already in the atmosphere.
Today’s business students who will be tomorrow’s business leaders are
guaranteed to face sustainability challenges.
Future business leaders must be equipped with the scientific
understanding of how climate change is currently impacting business, how
it will impact business in the future and the profound change that is
required of business and industry.
Professors of these courses should assign readings that communicate
the scientific need for businesses to operate in a
more sustainable way to address climate change. Such readings should note that “
substantial changes” 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.
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