Faculty Flash Survey: Climate Change Is an Urgent Business Priority, Experts Say

Introduction

Business schools must make climate change an urgent part of the curriculum, according to a survey of 169 faculty experts in the Global Network for Advanced Management, a coalition of 30 top business schools in 28 countries around the world. The experts agree that climate change poses a material risk to businesses, which, respondents say, must take action on climate risks regardless of government policy. Nevertheless, most estimated that global carbon regulation is achievable by 2030. 

Commenting on the survey results, David Bach, deputy dean at the Yale School of Management, said, “Top business school professors from around the world send two messages loud and clear: First, the climate crisis is here, and both businesses and business schools must adapt now; and second, there is no single policy solution, business approach, or MBA course that will do the trick. What we need instead is broad-based, real-time experimentation, and rapid learning about what works and what doesn’t. Cross-pollination is key, and the Global Network was designed precisely to support such efforts, connecting business leaders, scholars, and students worldwide.”

Survey Results

Cimate Change Example

A decisive 93 percent of Global Network faculty members think climate change poses a material risk to business across sectors.

“Climate change, possibly with air pollution, will be one of the most serious business issues, at least in Korea and China, within the next few years.”    
—Namgyoo Kenny Park, Associate Dean, Seoul National University Graduate School of Business, South Korea

“Climate change was once the concern of climate scientists, activists, and lobbyists. Now, it's integrated into every field of work. Climate and health, agriculture, energy, urban planning, policy making—it's cross-cutting. To lead a successful business, you have to be aware of global shifts and risks—and you have to be a leader in shaping rather than surviving hot trends (pun intended!).”
—Teresa Chahine, Sheila and Ron '92 BA Marcelo Lecturer in Social Entrepreneurship, Yale School of Management, United States

Graph showing percent of respondents who selected aspects of business for which climate change is an important consideration

The faculty experts expressed strong positive support for companies incorporating climate risk when making decisions about investments, innovation, relationships, and talent acquisition. More than 70 percent of the experts say that companies should incorporate climate change into business decisions; there is significant concern about the sustainability of physical operations and supply chains.

“We need green human resource management practices.”
—Lynda Jiwen Song, Associate Professor and Department Head, Renmin University School of Business, China

“Change will be through greener supply chains, redesigned products that fetch incremental revenues, and services that backstop carbon emissions.”
—A. Damodaran, Professor, Indian Institute of Management Bangalore, India

Cimate Change Example

Sixty-nine percent of the respondents consider a global carbon tax the most effective tool to influence business decision-making on climate risk, though only 19% said they "strongly agree." When combined with the other survey results, these numbers suggest that regulation is not the complete picture when it comes to climate-change mitigation as it affects global business. 

“A carbon tax is one of the instruments that can be used, but other instruments such as tradable permits should be analyzed in courses. Also command-and-control instruments, with their advantages and disadvantages.”
—José Miguel Sánchez, Dean, Pontificia Universidad Católica de Chile School of Business, Chile 

Cimate Change Example

Still, experts are optimistic that a worldwide carbon tax is indeed achievable, with most respondents estimating such a tax is likely by 2030. Close to zero respondents think that a carbon tax will never happen.

“A carbon tax would be the best approach, but won't be implemented on a global basis. A more immediate issue is whether China, the United States, and others will ‘leave their country's coal in the ground.’”
—Edward A. Snyder, Indra K. Nooyi Dean and William S. Beinecke Professor of Economics and Management, Yale School of Management, United States

Cimate Change Example

The majority of Global Network faculty believe a carbon-neutral economy is achievable by 2050. Close to zero respondents think that a carbon-neutral economy will never happen.

“Underdeveloped and developing countries should receive compensations for carbon reduction from developed countries who took advantage of growth without consideration of climate impact.”
—Andrés Ibáñez, Professor of Marketing, Pontificia Universidad Católica de Chile School of Business, Chile 

A chart showing the percentage of respondents who believe that business should act on climate regardless of government policy

86 percent of the experts surveyed agree that businesses cannot depend on governmental action to slow climate change.

“In an ideal world, our governments, under an organized global umbrella such as the U.N., will come up with practical systems to control and curb greenhouse gas emissions. While we wait for that desired date, when all governments act together, it is up to individuals and businesses to come up with a solution and avoid the point of no return. Schools around the world have a fiduciary responsibility to help with raising awareness and teaching future managers to care and take more action than our and previous generations did.”
—Majid Ghorbani, Renmin University School of Business, China

“Climate change represents such an incredible opportunity to leverage the power of business to create a sustainable future. To achieve this, we must collectively reframe the narrative of business about purpose first and where profits are a byproduct.”    
—Robert Strand, Executive Director, Center for Responsible Business at Haas School of Business, University of California Berkeley, United States

Cimate Change Example

Overwhelmingly, professors at top business schools agree that climate change and its impact on business and society should be incorporated into the core MBA curriculum. Interestingly, the survey responses on how to achieve this span a wide spectrum—from emphasizing the risks of climate change to discussing its opportunities, indicating that business students should learn a balance of climate-driven risks and rewards for businesses.

“It is imperative that business schools seriously assess the business impact of climate change, and develop solutions. The topic must be a core consideration and not relegated to an elective.”            
—Audrey Chia, Associate Professor, National University of Singapore Business School, Singapore

“Cases about climate risks and opportunities (innovations) should become part of the core curriculum in every kind of course.”
—William Rosenzweig, Director, Sustainable Food Initiative, Center for Responsible Business, Haas School of Business, University of California Berkeley, United States

“A related topic to study is catastrophic risk.”
—Raicho Bojilov, Assistant Professor, Pontificia Universidad Católica de Chile School of Business Chile, Chile

Methodology

The survey was conducted from December 12 through 23, 2018, and included all 30 Global Network schools.

Member Schools