October 30th, 2016 by Carolyn Fortuna
A Master of Business Administration (MBA) degree confers a high degree of intellectual capacity, specific knowledge, and practical skills to colleagues, employers, and financial institutions. How is a green MBA different than a traditional MBA? The sustainability-centric MBA, often called a “green MBA,” focuses heavily on teaching environmentally and socially responsible green business practices. Studies within a green MBA allow students to concentrate not only on traditional courses such as accounting and finance but also to learn how to use their business acumen to bring about meaningful environmental and social change.
Sustainability was once frequently defined as processes that allow biological systems to endure and remain diverse and productive. Today’s 21st-century definition of sustainability goes far beyond that original narrow explanation and now refers to the need to develop the models necessary for both the human race and planet Earth to survive.
Economic growth and energy expansion have produced environmental degradation. This presents a challenge to today’s students who want to examine ways in which we can slow or prevent pollution, conserve natural resources, and protect remaining environments, all within a thriving market-based economy.
What Factors Make a Student Turn to a Green MBA?
The surge in student interest in green MBAs emerges from many, often interrelated factors. Sometimes it’s as simple as looking ahead to a position in management opportunities in the growing clean energy sector. Others see a reduction in the traditional world of banking. Some students have grown disillusioned with a conventional profit-first M.B.A. path. Primarily, however, the increasing popularity of a green MBA springs from an innate desire to contribute to a sustainable society founded on equal access to health care, nutrition, clean water, shelter, education, energy, economic opportunities, and employment.
Granted, this is an ideal society in which humans live in harmony with their natural environment. They conserve resources for their own generation and for those who will come afterward. But for that ideal future to have any chance, it will take a generation of visionaries. Students who seek out green MBAs recognize that each citizen of the world should have the opportunity to enjoy a high quality of life in which social justice for all prevails and the environment is nurtured.
And business education programs are listening. Companies are ready for comprehensive change.
With this backdrop of a common shifting focus toward sustainability, businesses are facing many challenges. They must reroute what has been the norm of improving oneself toward entirely new long-term practices that respect the environment and assure the health and well-being of employees and the future generations. Meanwhile, these same businesses are also expected to improve profitability, fund innovation, and increase market share for current stakeholders.
How a Green MBA Emphasizes the Triple Bottom Line
A green MBA is a specific, high level study of how environmental and social sustainability can be achieved at a profit. Within this dilemma are three specific focus areas, often termed the “Triple Bottom Line.”
- Social: What influences does business have on the earth’s population in relation to the earth’s carrying capacity? What are the consequences of eliminating poverty within current economic model?
- Environmental: What responsibility does business have to ecological maintenance of natural habitat, survival of species, protection of whole ecologies, and global warming through carbon reduction?
- Economic: How can reliance on fossil fuels be reduced and eventually eliminated without risking lack of adequate, scaled replacement alternatives? What common financial practices must be reconsidered due to their negative impacts on ecosystems?
In business terms, the Triple Bottom Line is encapsulated as people (responsibility to others), planet (business practices that reduce the business environmental footprint), and profit (positive results from business transactions). The Triple Bottom Line is a way for the marketplace to move beyond a focus on the balance sheet and, instead, to be measured by an environmental footprint, fair treatment of people, and business as an integral part of communities.
In this way of thinking, an organization’s commitment to overall sustainability determines its success. How an organization interacts with people and the planet as well as how it earns profits determines its overall outcomes and builds stronger relationships among consumers, stakeholders, and the community at large.
A green MBA can help you to develop, implement, and monitor the Triple Bottom Line strategy. It will guide you to create a mission statement that aligns your organization to your social commitments. It will provide the ability to execute internal, inter-business policies and strategies. And it will offer plans for overarching social responsibility and employee enrichment practices.
Connecting the Triple Bottom Line with Environmental and Social Justice
Environmental and social justice movements are the sources for many of the issues, arguments, and research on sustainability that inform inquiry around this Triple Bottom Line. Environmental justice is an important part of the struggle to improve and maintain a clean and healthful environment, especially for those who have traditionally lived, worked, and played closest to the sources of pollution. Social justice promotes a fair and equitable society by challenging injustice and valuing diversity. It seeks to have all people have the right to comparable treatment, support for their human rights, and a fair allocation of community resources.
Justice movements provide essential guidance to green MBA studies. Net Impact‘s research found that making an environmental and social impact through business has gone from “nice to have” to “must have” for prospective graduate business students. A full 91 percent of 3,300 graduate students reported that social and environmental issues are very important or essential to business’ long-term success, and 85 percent said they wanted to tackle these issues while in graduate school.
The Influence of Classical Economics on a Green MBA
To understand and apply justice within a capitalist society, a green MBA shares a common foundation with a traditional MBA: it looks to classical economics but investigates an interplay of externalities, natural resources, and value to understand the effect of business on ecosystems.
Externalities: These are the economically significant effects of manufacturing and trade on those who are not part of the industry or market in question. Externalities reduce the costs of business for corporations and increase their profits. All too frequently, taxpayers or future generations pay to mitigate negative externalities.
A green MBA student would study negative externalities to determine the environmental effects of pollution, the overharvesting of fish, fossil fuels, and global warming.
Natural Resources: Traditional accounting practices treat extraction of finite natural resources as income that nature provides for free. Depletion of nonrenewable natural capital isn’t taken into account as a cost to be factored into traditional business practices.
A green MBA student would study how and where natural resource non-renewables, which are important for preserving and sustaining life, have a place in the market. Think clean air, drinking water, soil, or green spaces.
Value: An individual purchaser in a free market will only buy something worth more to that individual than the assigned price. Conversely, a seller values the goods less than the price listed.
A green MBA student would study the degree to which corporate social responsibility, including ways that the planet and people may not fall within traditional cost-accounting measures, may enhance the value of an overall business through positive individual, company, or community acceptance.
A Green MBA Begins Your Path to Becoming a Change Agent
A change agent is someone who works from either inside or outside an organization toward transformation. In the case of a green MBA, a student would study such matters as organizational effectiveness, improvement, and development that aligns with environmental goals. A green MBA student would focus on efforts that embraces changing technologies, institutional structures, and tasks that impact interpersonal and group relationships in the organization. The concentration is on the people in the organization and their interactions as part of a larger web of economic and environmental action.
A green MBA can lead to organizational change within green economies. It connects the dots between timeless leadership practices and shifting an organization to a sustainability culture. By the conclusion of a green MBA, you would be able to:
- lead the integration of sustainability into an organization, using a methodical and sequential change process;
- design a persuasive, efficacious business plan that would coalesce with a company’s mission toward becoming a green, stable, and robust enterprise;
- adapt leadership practices during the sustainability change process, recognize change contradictions, and detour around barriers to sustainable practices; and,
- inspire others to rise up to champion sustainability across multiple domains.
A Green MBA Brings the Future Closer to Today
Green business integrates the worlds of commerce with the environmental, social and cultural aspects of sustainability. In 2013, the Association to Advance Collegiate Schools of Business determined that “social responsibility, including sustainability and ethical behavior and approaches to management” will be a standard in the curriculum content for all programs within AACSB accreditation, which encompasses a school network with more than 150,000 students.
Now it’s up to you to decide if you are the optimist who can create sustainable new technologies and urban infrastructures, build with environmentally sound practices, and support a sustainable, healthy, and happy population through green business practices. If so, a green MBA is the way to go.
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