Businesses are extending their missions to encompass environmental sustainability. Companies that focus on environmental sustainability help ensure that their products and operations contribute to important environmental goals. Sustainable business practices can benefit bottom lines by reducing operating costs, improving brand reputation, and delivering competitive advantages.
These developments are often framed within environment, social, and governance (ESG) factors. KPMG has conducted an annual survey since 1993 on global corporate CSR/ESG activities and reporting. At the time of the 1993 survey, only 12% of the top 100 (“N100”) companies in surveyed countries were reporting on their ESG activities. As of 2020, this reporting had grown to 85%. Moreover, reporting on ESG by the top 250 (“G250”) global corporations (which KPMG started surveying in 1995) has grown to 90% (see figure 1.1).
Companies are clearly seeing the connection between their actions and the surrounding world and the need to track and address environmental factors that could inhibit their success. For example, that same 2020 survey found that top global companies reporting on the threat of global climate change as a financial risk had grown dramatically for both groups, with 43% of top global companies noting the risk and 53% of top national companies noting the risk. Concern over the environment is becoming the new normal of business operations.
Figure 1.1. Growth ESG Reporting
(Source: KPMG, 2020)
Sustainability challenges are complicated and addressing them requires considering interrelated factors and assessing often conflicting data and perspectives. In addition, successfully establishing an environmental focus within a business mission and balancing it with social and economic sustainability is a complex undertaking. An essential skill of the successful 21st-century business leader is understanding this triple bottom line.
Business leaders who desire to balance the triple bottom line and achieve results for their businesses must approach that goal with a unique leadership style. The New Belgium Brewing is an example of this resourcefulness. The employee-owned company produces some of their own electricity via solar power, captures and repurposes heat created in the brewing process, and is actively working to reduce its reliance on fossil fuels. In 2020, its Fat Tire beer became America’s first certified carbon neutral beer. On a more global scale, Nespresso has developed a supply-chain monitoring system that ensures that coffee farming and production complies with state-of-the-art sustainability practices.
Our Environmental Sustainability Pillar
Tomorrow’s business leaders need education on how to balance the triple bottom line as New Belgium Brewing has. Students are keenly aware that the companies they want to work in are searching for solutions to environmental challenges and are making sustainability a core business objective. They want to understand how to incorporate environmental sustainability into discussions around financial analysis, supplier management, product development, and corporate policy.
For this reason, we have developed a capstone course within the MBA program that features triple bottom line strategies. During the capstone, students use their knowledge to develop a business framework for a specific organization that helps them achieve economic, environmental, and social goals. Our MBA finance concentration is being modified to include environmental, social, and governance concepts as investment areas as well. Our study abroad and consultancy courses (such as those in Italy and the U.K.) include courses that examine sustainable business practices in other regions of the world.
At the University of Redlands School of Business & Society, we include an accelerated pathway from the undergraduate College of Arts & Sciences’ (CAS) environmental studies program to our MBA program. Students who complete their undergraduate degrees in environmental studies, environmental science, or sustainable business can pursue their passions and pair them with business development skills to advance their career trajectories. In addition, our consultancy courses offer opportunities to focus on environmental sustainability
“By bringing environmental sustainability issues into the classroom, we are teaching our students to think about and ask the tough questions about business strategy,” Jim Spee, professor of strategy and leadership says. “They are learning to think about things like how a potential new offering would draw on resources, how much electricity an anticipated production initiative would use, how product packaging impacts landfills, and what environmental risks and competitive advantages are posed by a corporate initiative.”
Educating Environmentally Responsible Business Professional and Leaders
Companies know that their success in accomplishing their missions and running profitable firms depends upon their ability to Integrate social, economic, and environmental factors when evaluating opportunities and solving challenges. Companies need leaders who know how to use the appropriate tools and methods of business analysis to understand and communicate important social, economic, and environmental factors present at the intersection of business and the environment. This type of leadership is integral to helping organizations shift their values, culture, and behaviors to balance environmental governance with economic performance.
Learn more about the University of Redlands School of Business & Society and how we graduate students who know how to take holistic approaches to meet business demands while supporting sustainability practices.