When Shane McArdle was studying finance and accounting in business school in the 1990s, there was little emphasis in the curriculum on environmental, social and governance (ESG) which have since risen to the top of the corporate agenda.
The chief financial officer of health and beauty retailer Boots Ireland, McArdle wanted to become its financial advocate for sustainability and bridge the gap between sustainability and business parlance. So, to deepen his knowledge and skills, he felt the need to go back to school, especially to enroll in a specialized training course for managers. Earlier this year, he joined Inside ofcorporate sustainability program of.
“Climate change wasn’t a big deal 25 years ago,” recalls McArdle. “The world has completely changed. It’s a wave of movement towards responsible capitalism and sustainability, from an investor perspective.”
During the five-day program, in Fontainebleau, near Paris, he developed the tools to measure, evaluate, report and communicate on sustainability, while also building a network of peers. “I already had a good understanding of ‘what’ needed to change, but the program gave me the ‘why’ and ‘how’,” he explains.
McArdle’s experience underscores that executive education is playing an important role in updating business leaders whose undergraduate programs paid little attention to sustainability. For several decades, the business school curriculum has been shaped by the doctrine of shareholder primacy. That is changing, as issues like climate change, purpose, and values are increasingly featured in MBAs and other business graduate programs.
Shane McArdle, CFO of Boots Ireland, has signed up for Insead’s corporate sustainability program © Patrick Bolger
The shift in emphasis has left “a huge gap in understanding the role companies play in the world” among some alumni, says Tom Lyon, a Dow professor of sustainable science, technology and commerce at the Ross School of Business and School for Environment and Sustainability at the University of Michigan.
“People who graduated high school 20 to 30 years ago didn’t get the same education as people do today,” she says. “There really is a need for a corrective education.”
Where business schools once encountered tacit resistance from executives who saw sustainability as a “softer” discipline, appetite for such content is growing as companies have come under pressure to look beyond profit. Education providers are responding with new programs that can help executives advance their organization’s ESG initiatives.
Michigan: Ross will launch its new program, “Building board expertise on sustainability,” in September. He targets directors of US companies, who are facing competing forces. “On the one hand, they have stakeholders who think companies aren’t doing enough for sustainability. The prime example is Engine No 1,” says Lyon. The hedge fund launched a proxy battle with ExxonMobil in 2021, appointing four directors to the oil company’s board and urging global changes to its climate strategy.
“There are also many Republican politicians who try to punish companies that even think about ESG criteria, labeling them as ‘awakening capitalists’,” he adds. The new course will help boards of directors understand their role in ESG oversight and will feature research linking sustainability with improved financial performance. It will also help filmmakers talk about controversial political and social issues.
Scientists have attributed flooding in western Germany in recent years to climate change © Ina Fassbender/AFP via Getty Images
The profit maximization mantra that once reigned over business school programs is often accused of corporate wrongdoing. But, now, schools are keen to emphasize their role in training senior leaders who can powerfully shape business practice in positive ways.
“Executive education attendees are the target group we want to motivate, because the decisions they make, the example they lead, and the resources they allocate can amplify the degree of change,” says Lawrence Loh, director of the Center for Governance and Sustainability TO NUS Business School in Singapore.
Loh says sustainability is evolving so rapidly that many business leaders are taking executive training to keep up. When NUS launched its short program, Sustainability: the Next Challenge, last year, it planned to run the course once or twice a year. But such is the demand that the course is already on its eighth intake of participants.
In addition to standalone courses, schools are integrating ESG factors into broader management programs in a holistic approach to education.
“It’s very difficult to talk about leadership without talking about sustainability,” says Russell Miller, director of learning solutions and innovation at Imperial College School of Commerce in London. “You can no longer separate it from these core subjects.”
Plus, those modules are no longer looked down upon, adds Frank Brueck, who runs the Leadership Lab at Imperial’s Leonardo Center on Business for Society. “If you have him on a show, he’s not frowned upon anymore. People realize that this is something they need.
Schools say their role now is less to win hearts and minds and more to help leaders formulate and execute a sustainability strategy. “Organizations have realized that it is no longer a tick box – it is of strategic importance,” says Sameer Hasija, dean of executive education at Insead.
Business school academics, he adds, need to update their subject quickly. “These topics are at the forefront of our knowledge frontier,” she says, citing the struggle to create reporting standards for sustainable business.
However, Stuart Robinson, associate dean for business engagement, innovation and career education at the University of Exeter Business Schoolhe wonders whether business schools have the expertise to teach complex subjects such as climate change.
UK school uses climate scientists from the University of Exeter to deliver executive education programmes. “We don’t want to behave like activists, but like scientifically informed institutions,” she underlines.
The bigger question is whether the lessons being taught in the corporate classroom are making a tangible difference in how the corporate sector performs. “We need to start seeing people’s knowledge level change that has an effect on what companies do,” says Robinson. “We are at the beginning of this process, but this is the next stage.”
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