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• The world will need bold, self-aware leaders who are prepared to make difficult decisions, no matter how unpopular those decisions might be.
• To better address the climate challenge, business schools must promote a philosophy of leadership based on collective, not individual, effort.
• Graduates who have a double competency in both sustainability and core business disciplines will be in high demand, as organizations seek to focus more on environmental, social, and governance issues.

For too long, humanity has treated planet Earth as an infinite resource to plunder. In recent years, however, most of us have finally begun to understand that we are headed for environmental catastrophe if we do not take urgent action.

With this urgency must come a comprehensive sea change in mindset, priorities, and behaviors. Business leaders and policymakers must commit to making—and delivering on—sustainable long-term decisions, regardless of how difficult or unpopular some of those decisions might be.

Since its inception, the Global Alliance of Management Education, or , has worked to prepare responsible global leaders capable of making such decisions, as they innovate and drive change within global organizations. With this mission in mind, CEMS recently asked a diverse group of academics teaching at our global network of business schools how they believed we should develop leaders capable of tackling the environmental crisis. We summarize those views—alongside those of many of our global corporate partners—in the report “.”

These conversations build on our research findings from 2021, when 4,206 of our alumni told us that the environment was the greatest concern facing modern-day business leaders. The environmental challenge displaced technological advancement, the top concern from our 2018 survey. 

Ultimately, contributors agree, the business world has the capacity, capability, and resources to drive positive change. For that reason, businesses must play a critical role in leading the way to address the climate emergency.

As the ones charged with nurturing and developing responsible future leaders, business educators also have an incredible opportunity to promote environmental and social sustainability. They can achieve that objective by producing bold, exceptional leaders who have both the skills and awareness to deploy world-saving solutions.

Leaders Must Take a Collective View

One contributor to our report, Dirk S. Hovorka, is a professor of business information systems at the University of Sydney Business School. He points out that addressing climate change will require commitment and sacrifice. Unfortunately, when commitment and sacrifice are necessary precursors to action, people often do nothing, resulting in stasis. But the longer we put action off, he says, the more extreme the losses to people and the biosphere will be.

To help the world to avoid disaster, Hovorka argues, business schools must change their leadership philosophy from one focused on individual leaders to one focused on collective effort. “One common mistake, made by many business schools, is the promotion of the ‘guru’ leadership philosophy—[which is based on] the great leader who has a clear vision, can stand on stage and motivate people,” says Hovorka. “The only issue is that while we wait for the guru leader to solve our environmental problems and lead us to the promised land of profitability and corporate responsibility, nothing else happens.”

“There are consequences to our collective activity that we may not see. If individuals and executives adopt the ‘collective’ leadership philosophy, we can effect positive change more quickly.”—Dirk S. Hovorka, University of Sydney

He calls on business schools to teach students a philosophy of responsible leadership, in which everyone’s activities are interconnected. “There are consequences to our collective activity that we may not see. If individuals and executives adopt the ‘collective’ leadership philosophy, we can effect positive change more quickly,” Horvorka says. “As individuals (acting collectively), we can lead this agenda, adopt positive behaviors, buy from ethical companies, and elect conscientious politicians.”

He adds, “Current business thinking is deeply embedded in a system of goals and ideology that restrains and constrains a business’ willingness to act, because [it has] much more immediate concerns. We are all part of a big fragile system of living things and nonliving things that works on timescales that we don’t intuitively comprehend. Until we grasp and really understand that, it will be difficult to effect real change.”

Leaders Must Take a Generational View

Ultimately, says Hovorka, we must view creating capital, building wealth, strengthening institutions, and improving workforces as intermediate goals that support the long-term well-being of humans, animals, and the entire biosphere. In other words, we must pursue the primary goal of being “good ancestors” to those who will live in the future.

To achieve this, he says, “we must come to a broader collective agreement on the goals we are trying to achieve, including leaving a legacy for the future.”

Camille Meyer is an associate professor social innovation, entrepreneurship, and sustainability at the University of Cape Town Graduate School of Business (UCT GSB). He agrees that leaders need to take a temporal perspective on decision-making.

“A decision made today, based on an outcome within the next quarter, may have implications for the environment in the long term,” says Meyer. “The damage that can be done in one day may take centuries for affected ecosystems to recover (if they indeed do).”

Leaders Must Be Bold and Self-Aware

Andrew Delios, a professor of strategy and policy at NUS Business School at the National University of Singapore, told us that the world needs leaders who are in touch with their personal values. In an increasingly complex world, he says, it is vital for leaders to use their values to guide them as they make their toughest decisions.

“Such self-aware leaders will naturally be drawn to organizations whose vision, mission, and strategic objectives espouse their values,” Delios comments. “Equally, leaders will need to value the importance of introspection, continually reflecting on how they’ve handled challenging situations and how they could do better. This process creates truly authentic leaders [whom] people are willing to follow. Talented people everywhere will be drawn to these leaders, and their organizations, and work collaboratively to achieve shared goals.”

“Leaders will need to value the importance of introspection, continually reflecting on how they’ve handled challenging situations and how they could do better.”—Andrew Delios, NUS Business School

Bold leaders will drive cultural change and inspire their organizations to focus more strongly on environmental, social, and governance (ESG) issues. These leaders “must empower employees to fight through complacency, build coalitions, and marshal stakeholders,” Delios says. “They need the courage to push the rock to the top of the mountain and then let it roll down.”

Luckily, the will is there, especially among members of younger generations who know that something needs to be done to address environmental challenges—they just need someone to lead them in the right direction. “If bold, self-aware leaders make these changes, they will be rewarded,” he concludes. “They will be preparing their people and organizations to manage multiple strategic objectives, which will be key to being a successful corporation in the future.”

Leaders Must Have Double Competency

Lars Jacob Tynes Pederson, head of the Centre for Sustainable Business at the Norwegian School of Economics in Bergen, told us that the number of environmental issues that responsible leaders must consider have proliferated over the past few years. Only recently, for example, have businesses had to address complex issues such as protecting biodiversity. These issues have led to the need for employees with more specific expertise.

That’s why, Pederson argues, business schools should design programs that integrate sustainability into core fields such as accounting, finance, strategy, and marketing. In this way, they can help students develop the “double competency” employers are looking for.

“Many organizations are quite open when it comes to saying they have a competency gap when it comes to sustainability. I am seeing graduates with this double skill set being fast-tracked, as the current generation of managers were never taught these skills,” says Pederson. “We need people who understand how they can impact the sustainability agenda to effect real change.”

Leaders Must Challenge the Status Quo

The UCT GSB’s Meyer also argues that we need leaders who are willing to challenge existing systems. “The status quo always benefits a certain group of individuals and organizations, but if unchallenged, leads to larger and larger inequalities,” Meyer says. “Eventually, the level of inequality becomes too great and the system falls. It is best to break the cycle before this happens.”

That’s why business schools must produce leaders who are trailblazers in sustainability and “who know their values and who have the courage to try and implement change,” Meyer says. “It is difficult to be a pioneer, especially when people around you don’t really understand what you mean. However, only pioneering leaders can build awareness and give a voice to others, so that they can develop a deeper collective understanding of the challenges.”

How Corporations Are Addressing the Crisis

We also heard insights from several of our corporate partners, whose representatives explained how their organizations are tackling this issue. For example, Heidi Robertson, group head of diversity and inclusion at the global technology company ABB, shared how the organization is working with customers and suppliers to reduce carbon emissions and implement sustainable practices across its value chain. The company also is conducting of its products and solutions. ABB’s , explains Robertson, commits to achieving carbon neutrality in its own operations by decade’s end.

“Only pioneering leaders can build awareness and give a voice to others, so that they can develop a deeper collective understanding of the challenges.”—Camille Meyer, University of Cape Town

Alexandra Palt is executive vice president and chief corporate responsibility officer at cosmetics company L’Oréal. She notes that, by 2025, all L’Oréal sites will be carbon neutral, including its factories, distribution centers, administrative sites, and research and innovation spaces. By 2030, to using only 100-percent-recycled plastics and ensuring that 95 percent of its ingredients will be biobased, derived from abundant minerals, or obtained from circular processes, thanks to a “” approach.

The Role of Business Schools

In the end, our contributors offered several recommendations that they hope the entire business school community will take to heart:

Integrate sustainability throughout core curricula. Innovation often happens in the spaces in between our more familiar ideas and actions. That’s why the contributors to our report recommend that business schools weave a deep knowledge of ESG issues throughout the entire curriculum, not just in specialist modules.

Train students to be comfortable with complexity. Business schools should ensure that students consider the implications of issues such as climate change and biodiversity loss. They should appreciate the complexity of natural systems and the natural environment, as well as the ways those systems can be affected by their leadership decisions.

Highlight interconnections. Students must become aware of the complex links between socioeconomic inequalities and the environmental crisis.

Partner with practitioners. Practitioners can help schools bring “lived experiences” from the business environment into academia. Through these experiences, students can practice applying theory in real-world scenarios.

By adopting such recommendations in their programs, business schools can produce responsible future leaders who are able to keep pace with change.

Leaders Must Be Responsible Citizens

CEMS member schools work toward this goal by including responsible citizenship among  for their programs. Designed and delivered alongside our corporate partners, the CEMS curriculum also has a growing environmental responsibility dimension.

For instance, our compulsory raises awareness of how businesses are delivering on the United Nations’ Sustainable Development Goals, including promoting clean water and sanitation, transitioning to affordable and clean energy, designing sustainable cities and communities, and taking climate action. And at our annual , future leaders learn how modern-day business, environmental responsibility, and policy development have become increasingly interdependent. This educational initiative has the backing of the .

We hope that our report offers insights about how business schools can prepare future leaders to tackle the environmental emergency. Moreover, we hope the report highlights just how much of a difference business educators can make in the world in the years to come.