The COP21 Paris Agreement has entered into force and COP22 Marrakech has spoken: the global economy is on a path to de-carbonisation, and business needs to plan and invest for the low carbon economy of the future.
At COP22 in Marrakech, We Mean Business announced that in total, 471 companies with over $8 trillion in market capitalisation have undertaken well over a thousand ambitious commitments to climate action. Leading businesses recognise that the greatest threat of this generation also presents the greatest business opportunity: economic growth, new market opportunities and increased license to operate offer compelling financial and social prosperity. Shareholder value is compatible with sustainable long term economic growth. New models for accounting and valuing risk are emerging and new regulation and risk disclosure requirements are on the horizon. Businesses are waking up to the risks associated with climate change – from supply chain disruption, to dwindling resources, to catastrophic climate events – and responding accordingly. The move towards radical transparency at a corporate level, combined with increasing expectations from consumers, regulators, governments and society, has rendered traditional corporate social responsibility models inadequate. Unilever, whose 2016 Sustainable Living Plan sets stretching targets reducing greenhouse gas emissions, including how they source raw materials and how consumers use their brands. The scale of their ambition means that they are finding new ways to partner with others in business, government and society. Faced with the challenge of climate change and the need for human development, Unilever state that they want to move towards a world where everyone can live well and within the natural limits of the planet.
The defining characteristic of the successful 21st century corporation will be its ability to embed sustainability into its core value proposition. Entrepreneurial and innovative human capital will be the key driving force behind the change. The growing momentum from the corporate world on climate action illustrates that companies have reached a tipping point, meaning that many MBA courses are losing relevancy as businesses look for CEOs with qualifications beyond traditional business degrees. People are the key to unlocking any climate solution.
By reassessing their educational models business schools can be at the forefront of promoting and popularising this new thinking, reaping the rewards of helping to create a new economy based on long-term value. New competencies and skills are needed to develop systemic business solutions, and MBA content needs to be evolved with sustainability as part of its DNA. Business is moving away from the bolt-on sustainability model, and business schools need to do the same. Just as climate change offers a huge opportunity for businesses to change how they operate, so it offers business schools the chance to deliver real impact through human capital. This is vital to ensure that business education is able to keep up with business practice. Business sustainability is subtle, sophisticated and systemic – and business education programmes need to move beyond the direct relationship between action and value to reflect this.
Most businesses that exist today will not exist in the same form in 10 or 20 years’ time. Adaptation through innovation in technology, processes and business models will be key for existing companies to survive and will also create the emergence of many new businesses driven by entrepreneurs. Business schools need to emphasise entrepreneurial competencies and skills in their curriculum to leverage such opportunity. Tesla Motors ranks number one on Forbes Magazine’s list of the world’s most innovative companies, which comes as no surprise. Despite shaving $3bn off their market value last year, Tesla ignores the short term losses to focus on the more sustainable ambition: to produce highly desirable electric vehicles—cars that go faster, go further (than other electric vehicles) and are safer, cleaner and more sustainable than internal combustion engine vehicles. Progressive companies, including many of the world’s largest blue-chip organisations, are rightly increasingly focused on long-term business durability rather than short-term shareholder value.
New organisational forms have evolved in Europe. My own organisation, Climate-KIC, is Europe’s largest public-private partnership with more than 230 partners drawn from prestigious universities, research institutions, blue-chips and SMEs. These organisations are creating new knowledge and will be a stimulus for business schools to evolve and change. We collaborate with existing business schools to de-risk their engagement by curating, co-creating and delivery of new knowledge to develop human capital for climate innovation. The climate challenge presents a real opportunity for the business education industry to take the lead on the issue, reinforcing their position and relevance as thought leaders in the new economic landscape.
Ebrahim Mohamed is currently Director of Education at Climate-KIC. He is a specialist educator in the field of entrepreneurship education and helps spearhead Climate-KIC’s reputation in technology and innovation in Europe. Ebrahim works for Climate-KIC, previously employed by core partner Imperial College, London and is a graduate of the London School of Economics. Ebrahim’s expertise lies in teaching, research and consulting in the areas of accounting, finance, innovation, entrepreneurship and education. Part of Imperial College since 1992, Ebrahim was formerly the Director of the MBA programmes and has been involved in graduate programmes that led to significant innovation initiatives in education. He has held visiting lectureships for the London School of Economics, City University, London Business School and Queen Mary University of London. He is an accredited examiner of the University of London external programme and a fellow of the Higher Education Academy (HEA).
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