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Climate change as a business issue

Devon Bonney and teamAs a dual master’s of environmental management student and an MBA, I felt a bit of culture shock entering the Business School after completing my first year of graduate school at Duke’s Nicholas School of the Environment. I was surprised that a lot of my UNC Kenan-Flagler classmates did not understand how climate change would affect their future careers. My dual-degree colleagues at Fuqua felt the same way. While both schools have robust energy programs and UNC has fantastic sustainability electives, I found students who were passionate about sustainability opted into these classes, but the topics were not an area of focus within the core MBA curriculum.

When it came time to decide on a topic for my year-long master’s project  my four UNC Kenan-Flagler/Fuqua classmates and I decided to tackle two questions:

  • Do companies understand how climate change may affect their business?
  • Do students understand how climate change may affect their future careers and future industries?

Our research goal was to explore opportunities for business schools to better prepare students for their careers by incorporating climate change and environmental considerations into the mainstream curriculum.

Our company research – based on 10-K analysis and interviews with business leaders in health care, finance, technology, energy, transportation, infrastructure and retail – indicates companies are increasingly aware of environmental risks and how climate change will affect their ability to protect and create value. Our student research, based on a survey administered to both UNC Kenan-Flagler and Fuqua students, indicates that students do not feel prepared to address climate-related risks as professionals. Further, the majority feel that climate change risks will not significantly affect them as business leaders. We found these results to be confounding in light of the global consensus that climate change is likely to have profound impacts on industry over the next 40 years, which coincidentally, is the span of current business students’ careers.

Our conclusion: There is a gap between what current businesses need in future leaders and the ability of next generation business leaders (current MBA students) to meet this need.

But something interesting happens when you prime MBA students with climate-related information. When students learned – through our survey that the Task Force for Climate-Related Disclosures commissioned by the Financial Stability Board encourages companies to voluntarily disclose climate-related risks, they placed a greater importance on mitigating these risks.  Our findings support the idea that students gain a deeper appreciation for how climate change affects their industries when empowered with information.

What I hope our research demonstrates is that climate change education should be a part of the mainstream MBA curriculum. There is a gap between what businesses need and what  students are learning. To prepare students, MBA courses  should prompt students to explore how climate change is a source of both risk and opportunity in global business over the next several decades.

In business school, we are taught about the time value of money and how investment now can pay off in the future. In fact, many core business principles are very much aligned with how individuals and corporations should mitigate the risks and monetize the opportunities climate change will inevitably bring over the next few decades and beyond.  After completing this research project, my hope is that that business schools take advantage of the opportunity to incorporate climate-oriented material into mainstream curriculum.

By Devon Bonney (MBA /Duke MEM ’18)