INSEAD will launch in January a renewed MBA curriculum that embeds sustainability into all 14 of its core courses. It’s also introducing a new capstone project that integrates sustainability considerations across all management areas.
While sustainability courses and initiatives have exploded at business schools over the last several years, INSEAD, ranked No. 2 in the Financial Times’ 2023 Global MBA Ranking, is likely one of the first elite business schools to integrate sustainability into its core MBA curriculum in such a comprehensive way.
The move, the school says, caters to the growing need for business leaders who can make informed, integrated business decisions on sustainability-related risks and opportunities in their organizations. It will train leaders equipped to advocate for both financial performance and progress while championing sustainable solutions that tackle global challenges.
“Business schools have an important role in cultivating future leaders. At INSEAD, we strive to provide our MBA students with rigorous and relevant business education to develop them into responsible leaders who will not only deliver prosperity, but also embrace sustainable practices to lead businesses that are a force for good,” says INSEAD Dean and Professor of Economics Ilian Mihov.
There are two big drivers in business that no business school can ignore: Sustainability is one, digital transformation is another.
“Because we have focused on this, we’re not forgetting about the technology, inventions, and digital evolution that may not solve a societal problem per se, but are there to make sure that business stays relevant,” Urs Peyer, INSEAD Dean of Degree Programmes and a finance professor, tells Poets&Quants.
Different parts of the world look at sustainability differently, Peyers says. Europe is generally very focused on the environment, while the U.S., until more recently, stressed diversity, equity and inclusion. Asia and Africa, meanwhile, focus more on social aspects of sustainability and lifting people out of poverty, despite consequences on environment or equity.
“What we’ve heard from businesses is that they will still come to INSEAD to hire general managers. And those general managers, from a vocabulary and a knowledge point of view, need to be able to address sustainability challenges,” Peyer says.
“They are very different across different industries and across different geographies. That’s why we decided to give people a holistic point of view as a mandatory part of the curriculum, and then let them specialize through electives for what they’re planning to contribute in the future.”
SUSTAINABILITY IS A HOT COMMODITY FOR MBAS
It’s not unusual, certainly in the last several years, for business schools to offer and tout their sustainability courses, experiences, and extracurriculars.
IMD Business School in Lausanne, Switzerland, wove sustainability into its entire MBA curriculum beginning in January 2022, developing 10 key skills that all MBA graduates need in order to tackle sustainability issues and incorporating them into every core course. Kellogg School of Management this year offered a GIM course on sustainability and social impact measurement, and took MBAs to Ecuador and Costa Rica over spring break to study measurement on in-country ventures.
Georgetown McDonough School of Business planted its sustainability flag early, and it tends to it often. The school has a growing list of courses and degree programs focused on environmental sustainability in the context of business, from the Sustainable Business Fellows Program for undergraduates to the new M.S. in Environmental and Sustainability Management that will welcome its first students in August. It also offers an MBA Certificate in Sustainable Business.
And, IE Business School in Spain jumped 13 spots this year to No. 27 in a ranking that assesses the most sustainable MBA programs in the world. Some 47% of the B-school’s core MBA courses integrate relevant sustainable development themes, according to the 2022 Corporate Knights Better World ranking. The Financial Times MBA Ranking 2023 ranked IE, one of the first carbon neutral universities in Europe, first in the world in ESG and Net Zero Teaching and second in its carbon footprint.
It’s more unusual, however, for sustainability to be so deeply embedded in the MBA curriculum at the top-tier business schools like INSEAD.
A sustainability focused MBA makes sense for a couple of reasons, Peyer says.
One, INSEAD bills itself at the business school for the world. While it’s headquartered in Fontainebleau, France, it has campuses in Singapore, Abu Dhabi, and San Francisco and alliances with top institutions around the globe. “(Sustainability) is a global problem which needs to be solved, sometimes locally or regionally. For us to bring all these different perspectives together so that people understand the complexity of sustainability, that was one of the drivers,” Peyer tells Poets&Quants.
“We also have a lot of research, going back 20 years or so, from a business point of view. We can advise companies on doing environmental and social types of transformations. Our faculty sort of coined the expression, ‘circular economy,’ and have advised the European regulations on the circular economy.”
DEFINING SUSTAINABILITY FOR INSEAD STUDENTS
The school last revamped its MBA curriculum in 2017, introducing a Personal Leadership Development Program (PLDP) with leadership coaching. The new curriculum review complements that program, helping MBA students become better leaders by teaching them about balancing economic growth, environmental protection, and social well-being.
This MBA review took just over a year, Peyer says. One thing they wanted to do is clearly define what INSEAD means by sustainability.
“It’s not just Scope 3. It’s not just about how to get to gender parity in your inclusive work environment. It’s all of those things together that build sustainability. We set out to frame it that way, because that’s what the world CEOs’ challenges are. They’re multifaceted, and oftentimes connected. People need to understand the complexity,” Peyer says.
In a sentence, INSEAD defines sustainability in business as “integration of social and environmental issues into business decisions.”
Expanding on that definition, sustainability is understanding that many of the models that schools have been teaching may contribute to the problem. For example, a finance professor teaching discounted cash flows didn’t traditionally teach how to account for all the actual costs in a product or service. If you’re polluting the water, or degrading the soil, or reducing air quality, there are costs associated with that need to be considered.
On the other hand, there are many opportunities for business and business solutions to solve big sustainability challenges, Peyer says. For example, how does a company scale sustainable aviation fuel in a timeframe that is needed to make an impact?
“I think that is where we are trying to inspire our students: To solve problems and not just think about how the old times and how all the old theories have screwed up the world.”
A REDESIGNED CAPSTONE
Besides the 14 core MBA classes, students can further tailor their degree through INSEAD’s more than 75 elective courses across nine different academic areas. The most recent additions include Energy Transition Finance, Well Being at Work, and Thoughtful Consumption. New electives on the latest business practices will be added every six months, according to a press release.
The school also designed a new sustainability-focused capstone. In the three-day exercise, students will act as an executive at a company facing a sustainability challenge. For example, a soft drink company working to reduce its plastic footprint after a press release declares the company the biggest plastic polluter on the planet.
Students, then, will analyze the business situation, the case for circular economy, and evaluate the solutions. They will have to bring together the sustainability skills they spent the last 10-months learning in the INSEAD MBA, and apply them to all aspects of management – operations, strategy, accounting, finance and marketing.”
“We designed this new capstone so that we can actually showcase many win-win situations. There are solutions out there that make sense economically, and environmentally and socially,” Peyer says.
”There are some that are in conflict, no question, and the answer is not that easy. So, the exciting thing for me is we use these scenarios to also get the discussion going, to see what needs to happen in order to get a better equilibrium outcome for the world, not just for the shareholder or the environment.”
While INSEAD’s sustainability-infused MBA may indeed differentiate its graduates in the job market, Peyer hopes other Top 10 schools follow suit.
“My hope is that it doesn’t set INSEAD students apart because we are the only ones doing it. I hope that, very quickly, other top schools see the benefits of integrating sustainability into their curriculum,” Peyer tells Poets&Quants.
Smaller, specialized programs are needed to provide deep understanding of the different topics within sustainability, like environmental science or social science, for example.
“But someone at the top needs to have the overview, and needs to be able to integrate all these things, and that’s how the top school should aspire to train their students.”
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