In this episode of Business Casual, John and Caroline, along with guest Charlene Zietzma from the University of Michigan, tackle the vital topic of sustainability in business education. They discuss the role of business schools in spearheading sustainable innovations and touch upon an upcoming sustainability-focused event. Charlene provides insights into the early adoption of sustainability at the Erb Institute and its long-term impact on education and the business community.

The conversation covers the increasing demand for sustainability skills in the job market, the innovative teaching approaches at Michigan Ross, and the growing consensus on the importance of sustainability across sectors. The enthusiasm of younger generations for environmental stewardship is highlighted as a hopeful sign for the future emphasizing the opportunity for business schools to play a pivotal role in addressing sustainability crises. 

This episode is a must-listen for anyone interested in the intersection of business education and sustainability, offering inspiration and insight into the path forward.

Episode Transcript

[00:00:07.210] – John

Hello, everyone. Welcome to Business Casual, the weekly podcast of Poets and Quants. I’m John Byrne with Poets and Quants. I have my co host here, Caroline Diarte Edwards. Maria is not with us today, but she will rejoin us next week. We have a special guest today, and we’re going to talk about sustainability. But before I do so, I want to say a word from our sponsor. Business schools play a crucial role in developing impactful and sustainable innovations in the world. They’re a driving force behind transformative solutions. Poets and Quants, in partnership with Times Higher Education, will convene a global community of sustainability leaders at the third installment of the global Sustainable Development Congress exploring the role of business schools in impactful innovations. The event will be held in Bangkok, Thailand from June 10 to June 13. Partnering with the congress enables schools to be part of an effective response to the sustainability crises and secure the future of our world. With us today is our special guest, Charlene Zietzma, who is the faculty director of the Erb Institute of Global Sustainable Enterprise. I recently visited the University of Michigan. You know one of the things that really struck me when I sat down with you a couple weeks ago, Charlene, was the fact that your school, the University of Michigan, is no johnny come lately to this very hot trend of sustainability.

[00:01:47.180] – John

In fact, the Erb Institute was created over a quarter of a century ago. How did that happen? How come Michigan took such an early lead in being interested in this topic when, let’s face it, climate change and sustainability was really not in the radar of most.

[00:02:07.110] – Charlene

Well, you know, I think Michigan has always had drawn a certain kind of faculty. The mission of the school is to build a better world through business. And there’s a long history of people that have been closely connected to impacting society, working with different groups in society. So those deep connections and really emphasizing how do we make the world a better place? And 27 years ago was no exception. We had Stu Hart here at the time, who was teaching strategy and was feeling more and more uncomfortable that the strategy he was teaching did not include a focus on stakeholders outside of shareholders. It didn’t include a focus on the environment, didn’t include a focus on other people that were affected by business. And so he talked to the dean at Ross. He was very interested in sustainability. He talked to the dean at the school for Environment and Sustainability. At that time, it was called the School for Natural Resources. And together he was able to broker a deal among the three of them to create this dual degree program that’s been running all this time, focused on people getting an MBA and a master’s in sustainability.

[00:03:28.770] – Charlene

And a couple of years later, the Erb family funded the institute, and the rest is history. We’ve got long and deep roots in sustainability across the school as a result.

[00:03:42.690] – John

The other interesting thing about your institute is from the start, it was interdisciplinary between two different colleges at the university. And really, that trend has been a more recent trend as well, among business schools, which for years had been on the periphery of a campus often isolated from other departments and colleges. And yet, from the very beginning, this institute was founded between the two schools.

[00:04:12.370] – Charlene

Absolutely. And seize itself. Seize the school for Environment and Sustainability is an interdisciplinary school which includes biologists and engineers and landscape architects and environmental justice advocates and all kinds of different people. And as a result, you get their big systems view, big picture thinking, and the ability to draw in all kinds of stakeholders. Of course, the business school brings a different perspective and some different approaches with respect to market based solutions, different ideas of ways of doing things. And I think the combination can be difficult sometimes, but for the most part, it’s something that yields all kinds of rich resources. So I really think the innovation is amazing when you put the interdisciplinary aspect in with business.

[00:05:08.370] – John

Now, sustainability is really hot in business education. And I have to tell you that years ago, when I was the management editor at Business Week magazine, I wrote a famous cover on management fads. So I ask you now, is sustainability a management fad, or is it here to stay?

[00:05:25.290] – Charlene

No way it’s here to stay. Yeah. Years ago, when I started researching sustainability, it was difficult. People would question, why would you study that? And that’s not part of a business school, et cetera, et cetera. Now, nobody questions it. It’s a part of everybody’s world. And really, climate change denialists have been around forever, but it’s really hard to deny the atmospheric rivers that are pouring down on California right now, the forest fires that we have to put up with, the droughts, all sorts of extreme weather events and climate disasters. In fact, last year was the highest year on record for disasters, over more than a billion dollars in costs. And we see more and more emphasis on having to deal with how to mitigate climate change, how to adapt to it. We have also started to see in the past, maybe business was less interested in doing something about it. Now, sustainability is an opportunity as well as a responsibility for business. And so if you look at the business roundtable, if you look at the World Economic Forum and others, they’re saying, we have to commit to sustainability. We have to commit to environmental, social and governance reporting and tracking.

[00:06:57.360] – Charlene

And as soon as you measure it, you start to pay attention to it and work to improve your performance in those areas. And they’re doing it because it’s a trillion dollar investment market in ESG investing, impact investing. But it’s also really critical that we price those risks into what we’re doing. We price those risks into investments and we take those things into account as we’re making our plans for the future. If businesses aren’t paying attention to the future, which is going to include more and more sustainability concerns, then they’re not going to survive very long into the future. And that includes the rest of us too, because if they don’t plan for the future, we’re all dead. I mentioned the opportunities. The opportunities in any time of crisis or adaptation are there for anybody who comes with good solutions, anybody who can innovate. And right now we see governments like the US with its inflation Reduction Act, Europe’s Green deal aspects, all sorts of governments are putting big money into climate change adaptation. It’s necessary, it’s important. And the organizations, the companies that are able to respond to that and come up with some good ideas are doing very well these days.

[00:08:17.520] – John

Now, Caroline, when you were at INSEAD, I wonder how much emphasis was placed on sustainability back then.

[00:08:24.450] – Caroline

Yeah, not so much. That was 20 years ago, definitely. The school at that time was leading, I think, or one of the leaders in terms of integrating ethics into the curriculum. But sustainability has emerged more recently. And as you know, INSEAD has revamped the MBA curriculum to really make sustainability woven throughout. All of the know they’re setting a very good example. I’m interested to hear about your experience of having worked in this area for so many years. And I think one of the challenges sometimes is that business schools see something that is really important and businesses need to world out there needs to get to grips with. But they don’t see it yet, right? You see it ahead of time. The business world hasn’t yet got to grips with things and is often lagging. So to what extent are you or are business schools able to really influence the wider world? And what has been your experience of that over the past several years?

[00:09:30.170] – Charlene

I do think we have a massive role to play in a number of different ways. First of all, we are educating the next generation of managers. So in our classrooms, we can make sure that they’re thinking more broadly about sustainability issues, that they’re thinking about stakeholder capitalism instead of shareholder capitalism. That alone is really important. But I also think we have the capacity, we have a platform on which to talk to businesses directly. For example, the Erb Institute runs a Michigan business sustainability roundtable, and many of the major businesses in Michigan have a representative on the business sustainability Roundtable. And it’s an opportunity to really push the agenda further, to really move the needle on sustainability and to allow business to talk to each other on these emerging issues. I also think, of course, we write about sustainability. And while not many people read academic journals outside of academics, that kind of writing does make it into Harvard Business Review. It does make it into consultants, portfolios. And I think it’s important that we are out there in the world also saying, hey, this is an issue. You’re going to face it in the future.

[00:10:52.960] – Charlene

You have to do something about it. Now, what I’ve seen at Michigan as well is this emphasis on talking to policymakers, on talking to business leaders, and really creating some movement around the agenda.

[00:11:09.190] – Caroline

And what has been your experience in regard to demand from employers? Are employers, are the recruiters coming to your campus really seeking those skills? Are they recruiting for that specifically? Or is it more a nice to have rather than a must have in terms of an MBA skill set?

[00:11:27.210] – Charlene

It’s starting to become necessary for all jobs. Jamie Alexander from Project Drawdown says, every MBA job is a climate job. And it’s because if you’re trying to look at your supply chain, if you’re marketing to people who want sustainable products, if you’re trying to keep your staff and keep them motivated, you have to think about sustainability. If you’re financing your investments, you have to think about ESG criteria. And so all of those jobs need sustainability skills. And in the past, we had people coming to recruit that the dual degree focus or the sustainability skills that our students have were a nice to have. Or there might have been some specialized jobs where they were a have to have, but they were not the mainstream jobs. And a lot of our students do go into mainstream jobs. Now we find that some employers are going to the career office and saying, can we have, like, a special reception for the Erb students? Because we really need some people that have this depth in sustainability, and we’re trying to recruit those students. We also have found that in the market in general, the draw for ESG skills in particular.

[00:12:48.220] – Charlene

I’ll throw that out there because that’s beginning to be regulated in many different jurisdictions. And so having ESG depth and reporting is a necessity to access markets in Europe, in California, in many other locations, then we have people demanding that right now. So PwC said that over a five year period, they would hire 100,000 people with ESG backgrounds. That’s massive.

[00:13:17.130] – John

That’s remarkable. It really is. Now, how do you teach this topic? What’s your approach? And, of course, I should differentiate here between undergraduates and graduate students at the Ross School and then your fellows, which get the dual degree.

[00:13:35.110] – Charlene

Yes, absolutely. There are a whole range of different ways to cut this, so I’ll try to keep it simple.

[00:13:43.350] – Caroline

But.

[00:13:46.970] – Charlene

We have a number of us that are dedicated sustainability people, and so we’re teaching electives, we’re integrating it into our courses. And because the Urban Institute has been around for so long, and the focus on sustainability has been there for so long at Ross, there are a bunch of us around. So there’s a certain amount of depth that students are getting just from that background. In addition, we’re working to get sustainability as a presence and something that’s really important in all the core courses. It’s being tracked right now. We’re working with faculty to provide case studies, to provide interviews of people that are leading edge in sustainability so that they have materials to use. And we’re talking to them about what can go into their courses. And let’s see, at the undergraduate level. Well, I would say that works in both. The other thing we’re doing is a lot of extracurricular and cocurricular activities that bring in sustainability content.

[00:14:55.600] – John

Actually, you have a very big event this coming weekend. Yes. You might want to even talk about that.

[00:15:02.230] – Charlene

Yes, we are running the climate cap event this year. So this is an event that goes to different universities every year it’s student run. So we had a group of students compete to be able to run this event at Ross, and they won that. It’s going to be the biggest climate cap ever. We have about 500 people coming to Ross to attend this conference, and we have dozens of speakers across many different domains that are going to be talking about sustainability, and a number of events planned to make this really exciting. So this event, lots of profile around it this coming weekend.

[00:15:42.680] – John

And there’s a practical aspect to how you teachtudents s at Michigan, they’re very much involved in projects with companies and organizations you might want to just spend a little time on.

[00:15:56.470] – Charlene

Sure. Yeah. Every MBA student at Ross does a map project in their first year. So map is multidisciplinary action project in that they’re working in groups to solve a problem for a client organization over a seven or eight week period. And a lot of those projects are sustainability oriented. So this past year, 19 of those projects have been in the climate change space, and they’re intense. They’re only focused on that project during that seven week period, and the results are quite amazing. I had a chance to sit in on a couple of those final presentations, and they’re really cool beyond that, because Michigan has always been a place that focuses on application, experiential education, connecting to the business community, and trying to make the world a better place, then a lot of courses have projects involved in them. So, for example, Jerry Davis teaches the course, business plus impact course, and students in the past iteration, of course, I think this year as well, they’re focused on sustainability transitions among businesses in Detroit. How can we make this happen? Of course, most of these are minority owned businesses. They’re relatively small businesses, and they need some way to deal with making those energy transitions.

[00:17:28.360] – Charlene

Students go out and interview a lot of these people. They do assessments, they look at the Inflation Reduction act, and they try to come up with ways to business plans with ideas that those businesses can then take and apply in their businesses to make those sustainability transitions.

[00:17:45.470] – John

Charlene, the breadth of programming and the depth of it is so great at Michigan that, you know, as a relative newcomer, because you joined as faculty director in January of last year, what more can you do? Okay.

[00:18:01.980] – Charlene

This year.

[00:18:02.560] – John

Exactly. Okay. Right. So what more can you possibly do?

[00:18:07.530] – Charlene

I think lots of different opportunities. We have an Erb fellows program. We have our dual degrees, and then we have an Erb fellows program focused on undergraduate students. And we create all sorts of curriculum and content for them and opportunities for them to learn and expand. And we’d like to expand that program to other schools, bring more people in, and really make it more interdisciplinary as well. We’re trying to broaden our stakeholder engagement. That’s a key aspect going into the future. And so we’d like to use our convening power to actually connect businesses to maybe some innovation opportunities, get them closer to their stakeholders so they have a systemic view of problems and opportunities that they’re interested in and really create some linkages there that allow innovation to move forward. There is a University of Michigan innovation center that is under construction as we speak now in Detroit, and it’s an opportunity to actually innovate more in that space as well. So we’re looking for that opportunity, too, in the future. And, of course, executive education now that more businesses are saying, hey, we need to do something about it. We already have executive education at the board level on ESG criteria, and we have launched an open enrollment program for people in executive and managerial ranks.

[00:19:44.550] – Charlene

And we hope to really expand our offerings in the executive education space as well. And of course, we want to continue to expand our dual degree program, get them connected better with alumni, and make sure that we have a knowledge community that helps to move the needle in many different places on sustainability.

[00:20:08.290] – John

Do you imagine a day when climate change is not a polarized issue in this country?

[00:20:16.070] – Charlene

Yes, I know I may be weird or delusional. No. I think the more and more that we see the impacts of climate change, the less easy it will be to deny it. There are always disagreements about how do we deal with it. And personally, I’m a bit sad that it takes some disasters to actually get people to pay attention. However, it’s going to be inevitable. And I’m a Sci-Fi future kind of buff. I read a lot of Sci-Fi fiction and I think it allows you to look into the future and see how other people have envisioned adaptation. And it kind of gives you hope in many respects because you can do some interesting things. There are possibilities.

[00:21:09.530] – John

Yeah, there really are. And I guess a big benefit here is the great interest and passion that younger people are taking in this topic. I don’t think the passion and interest among this young generation has ever been greater for trying to do something on a positive level with all ESG issues, not only sustainability.

[00:21:33.710] – Charlene

Exactly. Yeah, absolutely. You’re right on there. This is the world that they have to live in. They need to create a world that’s livable, that’s enjoyable, where they can thrive. And frankly, we have gone down a path that has made their life worse than ours was when we were younger. Leaving you out, Caroline, but I’m up there with you. It’s really this idea of if we look at what they’re living with today, it’s not nearly as rich an environment as we maybe emerged in a number of years ago. And so they need to think about how do we reinvent, how do we make sure that we pay attention to what matters and avoid some of the mistakes of the past so that we have a connection to nature, we have biodiversity, we have time to spend in relationships with each other. We have a decent life that we enjoy living. I think that’s really critical. And they will create it.

[00:22:44.550] – John

Amen to all of that. Well, Charlene, thank you so much for joining us today. Really appreciate it. And look out, everyone out there, for our video interview with Charlene and the dean of the Ross School of Business, which will be out shortly. And again, I just want to know how eloquent I think you are on this topic. I was just bowled away when I interviewed you a couple of weeks ago and thought you’d make a great guest here, and I think I was right.

[00:23:16.900] – Charlene

Thank you so much, John. I really appreciate that. And lovely to meet you, Caroline. And I really enjoyed being part of this.

[00:23:25.120] – Caroline

All right, so much for joining us.

[00:23:27.080] – John

Yes, thank you. And for all of you out there, I hope that your interest in this topic has been stirred by our conversation. We certainly need more advocates and more people who want to make this meaningful change, and Charlene can help guide the way. Today’s episode has been sponsored by the Global Sustainable Development Congress, poets and quantum, in partnership with Times Higher education, is convening a global community of sustainability leaders in Bangkok, Thailand from June 10 to the 13th. Partnering with the congress enables the business school to be part of an effective response to the sustainability crisis and secure the future of our world. So for all of you out there, thanks for listening. This is John Byrne with Poets and Quants.