Providing a perspective on the business opportunity behind sustainability & climate change
Incorporating sustainable business practices impacts every facet of a firm's operations — from manufacturing to logistics to service and everything in between. And while new regulatory and compliance issues may seem overwhelming or restrictive, leading executives and board members recognize that financial success and sustainability are not mutually exclusive.
An economist by training, Professor Meghan Busse has always had an interest in studying industrial organization economics and has made it an area of focus in her curriculum at Kellogg where she teaches future business leaders how to assess economics in the way of developing a firm’s strategy.
We sat down with Professor Busse to learn more about Sustainability Essentials for Leaders, a new Executive Education program dedicated to preparing leaders across the organization to feel confident in assessing, planning, and executing sustainability strategies, and changes. During the three-day program, Busse will help leaders understand how sustainability is changing the way we do business.
Why is the business of sustainability and climate change such an important topic for a business school to address?
Almost all of the activities that consume energy and contribute to greenhouse gas emissions are undertaken by firms. Because of this relationship, whatever technologies the brilliant minds of this world are developing; they don’t start to matter for the climate until companies begin to adopt, change and implement them into their day-to-day practices.
Being at a business school and showing leaders the role that businesses play in this, when they have the power and position as the arbiter for change is incredibly important work to do, and an exciting place to be.
Why now? And is it now a cross-functional issue?
In the past, issues surrounding climate change, energy or sustainability were often siloed, and they were the responsibility of one person or small group. But that is changing in a dramatic way. Gone are the days of passing this topic off to someone else. The strategic decisions that need to be made are C-suite and board-level decisions.
Companies that want to be ahead of the curve should be questioning how their investment strategy needs to shift, how to think about their acquisition strategy differently and what they can do to test and learn now so that in 5, 10, or 15 years, they are prepared for the opportunities that being in the forefront of sustainability will provide.
Twenty years ago, we were teaching business leaders about the rise of e-commerce and ten years ago we were talking about the rise of big data and analytics — sustainability is not the area in which a firm should fall behind, so leaders need to be addressing it now.
What does the new program cover?
We establish a foundation for sustainable business practices with a focus on reporting and compliance, emerging technologies, regulation and policy, and building and communicating your sustainability strategy. Ultimately, participants will be able to feel confident working on integrated teams that are tackling these very large, organizational issues and changes.
Participants will gain a better understanding of pressing issues specific to climate change and how they expand across multiple business functions, but more importantly how particular business functions could, and should, play a part in the strategy discussions surrounding short-and-long-term change for their organization’s sustainability practices.
Who is the program geared toward?
This curriculum was developed for C-suite leaders, senior-level executives and individuals holding board positions. The program provides a rich understanding of the topic for leaders who aren’t sustainability experts but who a have responsibility for helping their company adopt sustainable practices that improve long-term performance, or who have recognized a deficit that they feel a responsibility to help close. They will come away with an understanding of how sustainability is a business opportunity and how to implement organizational collaboration and change.
What are some of the biggest barriers you’ve seen for companies who want to operate more sustainably? How will the program help them take on those challenges?
I think one of the biggest barriers is the ambiguous relationship between the experimentation and implementation of sustainable practices and short-term profit.
Businesses need to make investments now to create fruitful, and profitable, options for themselves later, as the threat of climate change becomes larger and larger. It’s understandable that leaders will face pressure from their stakeholders and shareholders, however organizations wanting to make investments now for the long-term, will only be able to do so once the leadership team, and the board representing the shareholders, are aware of the risks to delayed action, and the opportunities that these types of investments provide.
It’s my goal that this course will change this perception, and instead, create an understanding of how this integrated thinking and experimentation can contribute to longer term value creation.