Teaching award: innovating business schools push towards a brighter future

Business schools keep finding new ways to meet the increasing demands of students — from the use of virtual reality tools on campus to hands-on interaction with companies driving towards sustainability.

And the submissions for this year’s Responsible Business Education awards showed a growing emphasis on including sustainability in all aspects of their curricula, a trend most apparent in European institutions. The judges also praised the practical application of simulations by universities to make wider points about the need for a sustainable future.

“One of the striking features of the stronger submissions this year was that they featured consortia of schools and colleges of business, collaborating on design and delivery of sustainability programming,” says Andrew Karolyi, dean at Cornell business school and one of the judges. He added that the submissions highlighted how European schools have made “strategic investments in sustainability-oriented cases, courses, and co-curricular activities earlier than others”.

Eric Cornuel, another of the judges and president of the European Foundation for Management Development, a non-profit network association, highlighted the advances made by the continent’s institutions. “There was a much higher proportion of submissions of exceptional quality in the sample of European schools than in the sample of American schools,” he says. “It is possible that a rebalancing in the rankings, in favour of European schools over the ultra-dominant American schools, will accelerate.”

This year’s submissions tackled some of the commercial world’s biggest challenges, including the promotion of sustainability across all areas of business and innovative ways of addressing the climate crisis. The subjects covered by those shortlisted include climate change mitigation, social entrepreneurship, sustainable transformation, and the link between business leadership and its social impact.

Focus on doing good

Madhu Viswanathan, professor at Loyola Marymount University in Los Angeles, has been teaching for roughly two decades and always tries to place his students in the shoes of the poor. His “Business for Good” course, launched in August 2020 for undergraduates, offers an online poverty simulation from the perspective of a 38-year-old woman as she balances money, time, comfort and health for her and her family.

Students come up with a business plan to launch a product for low-income customers in local or global markets while still caring about the returns. Viswanathan places a particular emphasis on the relationship between balancing business interests and the environmental and social impact. “I found the intersection of poverty and marketplaces to be neglected,” he says.

He also notes that artificial intelligence has entered the classroom, and is not going away. While he wants his students to understand the value of generating their own ideas, he says AI can be a useful tool to aid the design of new business models. “I am a big believer in this technology,” he says.

The judges were impressed with the focus on social impact. They said: “While this case might be a bit social entrepreneurship heavy, it still represents an impressive breadth and scope of learning and a dynamic approach to the material and its delivery.”

Fighting climate change

Academics have been trying for years to use technology in the classroom in a meaningful way, without much success. But IE Business School’s use of virtual reality headsets as part of a climate change mitigation exercise caught the attention of the judges. They can see this technology as a tool to enhance learning, although some question whether it is all a “gimmick”.

The use of VR in the classroom is certainly no stunt for Emilio Guillot Ontañon, IE’s instructional designer who runs the immersive programme, which is powered by AI. Guillot likens the use of the technology to the introduction of the calculator in mathematics: “Maths changed from being a hands-on exercise to being more conceptual in understanding what’s behind it.”

IE’s “Eye in the Storm” takes students through an “overwhelming” journey in the middle of a hurricane using VR headsets. As part of the exercise they must answer crucial questions about climate change.

“We want to reignite the conversation about climate change, leveraging this technology that is more engaging than anything else that we might have,” Guillot Ontañon says. “Eye in the Storm” is not confined to a single course but is a flexible module used across various programmes, at undergraduate, masters and corporate levels, he adds.

Finance with purpose

With its “purpose of finance” course, the University of Cambridge’s Judge Business School seeks to challenge traditional ways of looking at finance and make the link between sustainability and the world at large. The academics behind the course — David Pitt-Watson and Ellen Quigley — want students to leave with a more critical mindset.

The course departs from the conventional neoclassical approach to finance, which often treats environmental and social sustainability issues as add-ons. Instead, the Cambridge programme starts by exploring the purpose of the finance industry and scrutinises how well it fulfils this purpose ­— especially in the context of sustainability challenges such as climate change, say Pitt-Watson and Quigley.

A pragmatic approach to learning is key, they add. The course addresses real-world issues, such as biodiversity loss, to encourage students to think critically about the impact of financial decisions on the environment.

An example of their practical approach is a simulation exercise that exposes students to the risks of asymmetric information. They assume roles of fund managers and clients, discovering first-hand how information disparities can affect financial decisions and market efficiency.

“A couple of years back, we introduced more explicitly that sustainability must be at the heart of the fulfilment of purpose,” says Pitt-Watson. “This, for example, involved the introduction of the perspective of ‘universal ownership’, which suggests the fund manager should consider systemic issues, particularly climate change.”

An agenda for change

Thomas Lagoarde-Segot, a teacher and researcher at Kedge Business School in France, was instrumental in launching an ecological macroeconomics course in 2019. That followed years in which he focused on the importance of looking at climate and sustainability issues from a macro perspective, rather than business schools’ usual emphasis on the micro impact on companies and individuals.

Partly based on a textbook featuring the contributions of 25 academics, the course revisits concepts of finance and monetary policy from a sustainability perspective. This enables a critical examination of economic and financial factors, such as money, growth and markets, in the context of ecological challenges, and helps prevent greenwashing — a critical need in today’s sustainability-conscious environment, says Lagoarde-Segot.

Endorsed by notable figures such US academic and author Professor Jeffrey Sachs, the course offers a comprehensive perspective on economics and finance. It equips students with the intellectual tools to understand the complex and interrelated issues of sustainability, economics and finance.

The course is divided into two parts. The first one addresses topics such as credit, money and interest rates through the lens of sustainability — for example, by interpreting money circulation using the laws of thermodynamics. The second part looks at more micro issues, such as crowdfunding and corporate governance.

“We wanted to create a sustainable economics and finance curriculum,” says Lagoarde-Segot. “We had to innovate and provide new content. To do that, we had to rely on the pluralism of the various schools of economics thinking.”

Sustainability learning off site

Students at Vlerick Business School’s European EMBA escape their classroom and visit real companies to expose themselves to the sustainability challenges of the investment world.

On site, students have a couple of hours to work out solutions to a corporate problem and then they present their findings to the firm to get feedback. This set-up is similar to providing free consulting to companies — the students apply their learning to real-life scenarios and companies gain fresh perspectives on their sustainability challenges.

Another highlight of the course, taught by David Veredas, is the use of the Financial Times’ Climate Game, a simulation-based learning experience that encourages students to figure out ways to cut emissions to net zero by 2050. “It is a good exercise for understanding the complexities of decarbonising the hard-to-abate sectors, which paves the way for macro sustainable strategies,” says Veredas.

Students also learn about carbon accounting, the EU’s emissions trading system and the voluntary carbon markets. They are taught why it is important for companies to report using carbon accounting and the challenges involved in doing so.

“A very important part of the sustainability transformation for companies is to decarbonise,” says Veredas. To do so, “many companies are putting an internal price on carbon”. The embedding of carbon emissions in different projects helps companies decide on more sustainable ventures with longer term benefits, he adds. 

Javier Espinoza has an EMBA from IE Business school