Today, most companies consider and measure financial performance and environmental, social, and governance (ESG) indicators as separate domains. However, under increasing public pressure and government mandates to act with greater transparency on ESG issues, forward-thinking executives have begun creating strategies and related values for both shareholders and society. Their aim is to align financial and ESG reporting to the public's diversified interests.
The emerging global interest in these issues is radically reshaping the business landscape, raising fundamental questions about the skills and sensitivity that executives at all levels need to develop, especially during their training in business schools. How can we ensure that the ways that we promote society's well-being today do not compromise the well-being of future generations? How can we inspire and champion responsible management education, research, and leadership globally?
Many acclaimed researchers* report that there is a strong link between management models, strategic thinking, and business performance. In light of these conclusions, the quality of management education represents a fundamental pillar on which to build sustainable business professionals and initiatives.
To streamline the efforts of more than 450 business schools around the world, in 2007 the United Nations Global Compact launched its Principles for Responsible Management Education (PRME) project, aimed at developing global common principles for these teachings. The initiative is based on six principles, with an emphasis on developing students' capabilities to generate sustainable value for both business and society.
The PRME project also aims to establish partnerships with business managers and corporations, in order to better understand obstacles and clearly engage all stakeholders in addressing social and environmental issues. One recent event, the 3rd Global Forum for Responsible Management Education, was held in conjunction with the Rio+20 Corporate Sustainability Forum and produced a final declaration to support future actions. Recommendations included: teach sustainable development concepts; encourage research on sustainable development issues; "green" school campuses; support community-led sustainability efforts; and engage with and share information through the international frameworks of several UN agencies.
Among the other outcomes of the 3rd Global Forum were: comprehensive anti-corruption guidelines for curriculum change, a report on Fighting Poverty through Management Education, and a Gender Equality Global Resource Repository. Moreover, 300 leading business school and university representatives agreed on a roadmap for management education to 2020, based on several concrete commitments to action. Although all of the members are volunteers, they will be held accountable for their commitments, and if they fail to report regularly on progress, their affiliation with the Global Forum will be challenged.
Another high-level academic event is the annual meeting of the Academy of Management, a leading professional association for scholars dedicated to creating and disseminating knowledge about management and organizations. This August in Boston, Massachusetts, thousands of participants will host working groups dedicated to management education in the informal economy and the need to develop guidelines for curriculum change.
Additionally, global companies such as Boeing have supported the initiative for management education and sustainability efforts. Corporate demand for sound management education has played an important role in business schools stressing sustainability and environmental principles. Specifically, companies emphasize three broad themes in their management training: developing skills to advance a company's sustainability strategy, integrating sustainability into the operational management of the company, and implementing principles of sustainability that emerged from the collaboration between companies and MBA programs. To bolster corporate implementation of environmental practices, organizations such as the World Environment Center assess and compare companies' environmental practices. This ensures that companies continue to develop sustainably and share information.
The above-mentioned trends suggest that sustainability is rapidly emerging as a business concept and must play a central role in the educational process of managers and leaders of the future. This transition will certainly take time and will require active collaboration and networking among public and private institutions. However, it will allow for a global exchange of knowledge, skills, and highly qualified international professionals that are trained to develop sustainable strategies for the future well-being of billions of people around the world.
* See, for example, Arieh A. Ullmann, Academy of Management Review, 1985; Samuel B. Graves & Sandra A. Waddock, International Journal of Value-Based Management, 1999.
(First posted on Worldwatch Institute's blog: http://blogs.worldwatch.org/sustainableprosperity/ and Written by Monica Baraldi; Edited by Antonia Sohns; Originally published on CSRwire Talkback as a part of a series on Moving Toward Sustainable Prosperity).