Why should a multinational financial services company like Wells Fargo think about environmental sustainability? Because if he was looking for growth opportunities in, say, the dairy sector, a huge operational expense mitigates the environmental impacts.
According to Vishal Agrawal, p.Rovost Distinguished Associate Professor and Henry J. Blommer Family Chair in Sustainable Enterprise at the McDonough School of Business at Georgetown University.
This is not just a hypothetical case study for students at Georgetown McDonough. As part of the emphasis on experiential learning – and in response to a growing interest in environmental stewardship by students and consumers – students have recently sought opportunities for sustainable growth in dairy and agricultural sectors for Wells Fargo. They studied climate-related risks in West African supply chains in search of more sustainable cocoa farming. And they worked with a financial services company to measure the carbon footprint of its remote workforce in the wake of the Covid-19 pandemic.
THE BUSINESS CASE FOR SUSTAINABILITY
“These are examples of really practical and important issues that we’re working on,” Agrawal said. Poets&Quants. “The results are really useful for business, and the students learn a lot of skills that are scalable and applicable to anything they do in the future.”
The McDonough School offers a growing list of courses and degree programs focusing on environmental sustainability in the context of business, from the Sustainable Business Fellows program for undergraduates to a new MS in environmental and sustainability management. sustainability which will welcome its first students next August. Georgetown also offers an MBA in Sustainable Business.
Agrawal is also the academic director of McDonough’s newest initiative to prepare new and future leaders to make the business case for sustainability. the Sustainable Business Initiative launched about two weeks ago and now serves as an umbrella for its enduring courses. Its mission is to “focus on sustainability in the context of business” through student learning, thought leadership and research, and to bring together stakeholders of business, policy and academic expertise.
Agrawal sat down with Poets&Quants to discuss why it’s good for business to embrace sustainability and why today’s business students need these skills.
How did you start thinking about the intersection of business and environmental sustainability?
My initial training was in engineering and operations research, which consists of solving difficult problems in mathematics and economics. When I started my PhD program 15 or 16 years ago, I wanted to solve interesting and impactful problems, and I was drawn to sustainability which was still an early concept in the business world. Durability issues are difficult. They require you to harness the power of different disciplines to do good. It’s nice that some people improve the algorithms by a few seconds but that’s not what I wanted to do.
One of the things that drew me to the faculty of Georgetown 11 years ago was that Georgetown is a place that naturally lends itself very well to examining sustainability, particularly in linking politics and deals. Georgetown and Washington, DC is a perfect place to be in this regard. Georgetown also emphasizes society. Finally, sustainability challenges are always global in nature, no matter what you’re talking about, and that’s where Georgetown also shines.
Have you noticed an increase in business student interest in sustainability over the past decade?
Yes. Student interest is through the roof. All the program offers that we have developed on this subject are packed. The students are really interested and passionate about it. Not just from the business school, but also from other schools on campus who want to understand how business thinks about sustainability.
What is interesting is that there has also been an evolution on the business side. When I started, a lot of my conversations with companies tended to be, “Why should we think about sustainability? What is the business case? These days, the conversation is slightly different. Companies know they want to do something, but they want to know how to do it.
There is also an interesting development in terms of what our students should know when working in jobs related to sustainability. Fifteen years ago, maybe some companies had a sustainability person who would generally be like environment, health and safety. This is no longer the case. We are now at the stage where most of our MBA or graduate students will be dealing with sustainability in one way or another. We have students now working in supply chain for Amazon or Starbucks, and on the face of it that’s not sustainability work, but they’ll tell you that they spend a lot of their work thinking about sustainability. sustainability, because it is integral. Now some of our students are going to work on Wall Street and want to understand ESG (environmental, social and governance investing) and sustainability because that’s going to be part of their job. Some of them work for Amazon in technology but want to understand how sustainability is going to intersect with them. One of the things I always say now is that whatever industry or functional area a student is going to work in, they need to understand how sustainability intersects with that and how to integrate that into the decision.
What is the business case for sustainability?
It’s a centerpiece of how we approach sustainability at the McDonough School of Business. There are many reasons why companies should focus on sustainability or social responsibility. The most obvious, and some of my colleagues will tell you this as well, is the ethical reason for doing so. That’s what you should do. What I want to focus on, and what we’ve learned is also resonating with business, is what I call “the business approach to sustainability” or “the business case for sustainability” .
That means I’m not just going to tell you to do something that’s good for the environment or for society just because it’s the right thing to do. What I’m going to do is be able to help you identify how it can be good for your business too. It’s usually much easier to get companies to do something about sustainability if it also aligns with their business model and understands the constraints of their business operations.
If I’m putting on my business professor cap, I’m saying help companies make those decisions in the business context and understand that. If you want to influence companies, businesses and organizations to be more sustainable, you need to talk about their incentives. And it could be a variety of things. Generally, we think about efficiency and cost reduction. Or there is something that is expensive in the short term, but will reduce your risk in the long term. Many businesses that rely on natural resources take sustainability very seriously in the face of the threat of climate change. They invest hundreds of millions of dollars in some cases because they are facing this existential crisis, 40 to 50 years later, of not being able to access their supplies.
The reason we chose this type of approach for the initiative is that it gives students the right skills to be able to meet these kinds of challenges for any employer they have in the future. . Whether it’s a publicly traded company, a company that’s highly innovative in sustainability, or just trying to make a name for itself in the sustainability space. This makes our students very well prepared for the business world.
How did this idea turn into the Business Sustainability Initiative at McDonough?
Although the initiative was launched only a few weeks ago, we have been developing this internally for some time.
Many of the activities we did and the classes we offered happened slowly and organically. And many other centers and initiatives that aren’t primarily focused on sustainability at McDonough are also working on related issues. What we noticed was that there was an incredible demand – from employers, businesses, even in terms of population research, as well as students – for all of these different things that we were doing. So we thought it was a very good idea to do it in a more systematic way.
Six or seven years ago I started teaching key sustainability courses – sustainable operations, sustainable business models, supply chains – and those were filling up. At the same time, we started doing these capstone and internship courses where students were actively working on real projects with international companies and NGOs around sustainability. This naturally led us to launch the MBA Certificate in Sustainable Business which allows our students to really specialize in sustainable business and above all to signal to employers that they have the expertise or knowledge of the space. Just a few months ago, we launched a MS in Environmental and Sustainability Management, which will welcome its first class in August. It is an interdisciplinary degree that combines science and business to solve these problems. So, in a way, we started with the courses, then we added certificates, internships and experiential projects, and it slowly turned into an initiative.