A new report finds dramatic growth in "business and society" programs in many business schools—driven by student demand
Sustainability is not a vague pie in the sky concept for students at the Stanford Graduate School of Business. Last year, students worked to make the business-school cafeteria a nearly entirely sustainable operation with biodegradable forks and an extensive composting system. Their schedules are filled with classes such as Environmental Entrepreneurship and Frontiers of Social Innovation, while winter and spring break service trips to countries including Guatemala and Thailand have become so popular they are routinely overbooked.
The efforts undertaken by the school have not gone unnoticed by the Aspen Institute, a leadership think tank, which ranked Stanford as the top school in its "Beyond Grey Pinstripes" biannual alternative rankings of business schools released Oct. 10. This is the second time that Stanford topped the list: In 2005 it also was rated first.
Indeed, the outlook is bright this year for business-school students with an environmental leaning, says Rich Leimsider, director of New York's Aspen Institute Center for Business Education. According to the ranking, the percentage of business schools that require students to take a course focused on "business and society" issues has increased dramatically over the past five years, jumping from 34% in 2001 to 63% in 2007. Of the 111 surveyed schools, 35 offer a special concentration in social and environmental issues. There has been an "absolute explosion" of interest in this subject area over the past decade, Leimsider notes. "Considering the [typical] rate of change in higher education, this is lightning fast."
Top 10 for Teaching Green
Unlike general business-school rankings conducted by BusinessWeek and others, which evaluate schools on everything from career services to job placement, the Aspen Institute's "alternative" ranking solely examines how MBA programs are integrating social and environmental topics into their core classes, electives, and academic research. The institute surveyed 111 institutions, 71 in the U.S. and 40 international schools, representing a total of 18 countries.
The other business schools in the top ten are the University of Michigan, York University, University of California, Berkeley, University of Notre Dame, Columbia University, Cornell University, Duquesne University, Yale University, and Instituto de Empresa.
For the ranking, the institute reviews the schools in these four ways: a count of the number of courses with content in this area; students' overall exposure to these issues while in school; how the concepts are woven into other required classes; and faculty research published in journals. "Our goal is to provide a useful tool to prospective students that really focuses on some issues that we think are missing from a lot of other surveys and rankings," says Leimsider. The data is taken from the 2005-06 and 2006-07 academic years.
Research Not Keeping Up
The growing interest on campus in sustainability is reflected in the number of electives that look at the social and environmental challenges associated with conducting business. Schools now offer on average six electives dedicated to social and environmental issues, an increase of 20% since the last survey, the study found. Despite this, the number of core finance courses that focus on social and environmental topics remains low. For example, in accounting classes, only 5% of the schools said professors discuss how mainstream business can address social and environmental issues, compared to 2% in 2005. In core finance classes just 1% of classes tackle these topics.
The study's authors say that research on social and environmental issues also isn't keeping pace with the general growth of interest at business schools. Only 5% of business schools surveyed published research related to social and environmental issues, just a 1% jump from the previous survey. A number of theories exist as to why research in this area lags. It may be a lack of acceptance by peer academic journals, or the research that has been done may not yet be ready for publication, Leimsider says. "I don't know if we've figured that out yet, it's not as bright a spot on the survey."
Still, some schools are bucking that trend, including Stanford, which publishes the Stanford Social Innovation Review, a quarterly publication that looks at business through an innovation lens. The school's leading researchers are focusing their research on these issues, publishing papers on sustainable supply chains or how businesses can look at environmental issues from a strategy perspective.
Efforts Are Paying Off
Stanford created the Center for Social Innovation back in 2000. The center is now a hub for students and faculty on campus, driving the dialogue on how to equip students to deal with today's social and environmental issues in business, says Kriss Deiglmeier, executive director of the center.
Other schools have established similar initiatives. Cornell, the seventh-ranked school in the survey, created the Center for Sustainable Global Enterprise (BusinessWeek.com, 8/1/07) in 2003. The University of Michigan, the second-ranked school, houses the William Davidson Institute, an independent research institute founded in 1992 and specializing in emerging market economies.
Stanford's efforts in this area appear to be paying off. Recent graduates have started companies such as d.light design, which develops and commercializes sustainable lighting and power solutions for people in rural areas without access to electricity. Last summer, three students took internships with the sustainability division of Wal-Mart Stores (WMT) and more graduates are expected to pursue similar opportunities at other mainstream businesses, Deiglmeier says.
"The student demand is moving, academics and business are now starting to move," she says. "That is where you are getting the momentum to keep this going."