Michael Toffel, the Senator John Heinz Professor of Environmental Management and chair of the Business and Environment Initiative

Five years ago, as George Serafeim recalls, if he had walked into the classroom on the first day and mentioned ESG (environmental, social, and governance) standards, 1 percent of the class would have known what he was talking about. “Today, it’s more than 50 percent. Students understand that those are important considerations that are going to affect their organizations and their careers,” observes Serafeim, the Charles M. Williams Professor of Business Administration. Serafeim teaches Reimagining Capitalism: Business and Big Problems, one of several electives in the MBA Program that focus on environmental and social challenges.

Given the surge of student interest in the topic, Serafeim, who has been studying ESG questions for about a decade, introduced a new component to the Reimagining Capitalism course this year. He calls the module “What can I do now?” That’s the question he was getting from students after they read cases such as “JetBlue: Relevant Sustainability Leadership,” in which executives for the airline pioneered a system of sustainability standards and committed to transparency on environmental issues. Few new graduates will immediately become CEOs, with the direct responsibility to reshape a company’s ESG policies in such dramatic ways, but Serafeim wants to show students that they don’t have to wait to make an impact. “The message is that opportunities exist every day to make a difference,” says Serafeim. “The question is whether you are aware of the opportunities and of the agency that you have at every level.”

As part of the School’s focus on shaping successful, responsible business leaders well versed in ESG issues, first-year MBA students encounter nearly a dozen cases that address environmental concerns. “My vision would be that all students graduate with a clear understanding of the predicted ramifications of climate change on society and on business, and how companies can better prepare for that future by mitigating risks, pursuing new opportunities, and participating in the policy arena,” says Michael Toffel, the Senator John Heinz Professor of Environmental Management and chair of the HBS Business and Environment Initiative. “You don’t have to work for an environmental nonprofit or a renewable energy company to engage on this issue.”

Toffel, as course head for the Technology and Operations Management course, has himself taken the lead on introducing some of these cases. One example is Indigo Agriculture, in which CEO David Perry (MBA 1997) and Rachel Raymond (MBA 2014), now Indigo’s COO, were debating in 2016 how quickly the firm should bring to market its novel microbiome-coated seeds, which increased crop yields, reducing the environmental impacts of farming. Some of their seeds were able to thrive even in water-stressed situations, which meant they might be especially valuable in regions where climate change was leading to drier climates.

“It’s a rare look at a company that’s positioning itself to develop profitable opportunities, both to mitigate contributors to climate change and to accommodate the climate changes that are already occurring,” notes Toffel, who coauthored the case. “Those are the questions students want to explore: not ‘How do we batten the hatches?’ but ‘What are the opportunities for new products and services in a world of climate change?’”

Other class sessions challenge students to assess EcoSecurities’ opportunities in carbon credits, evaluate IKEA’s ambitious efforts to institute new wood sustainability initiatives, and strategize about how Nike could use the World Cup to showcase its commitment to corporate responsibility.

Toffel knows that today’s students can make a difference, because they already do. “This generation is already driving change in the business world,” he says. “They are the customers current CEOs are responding to when they make sustainable choices.”

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