Sustainability. Climate change. Net zero. Green energy. Ecological balance. Social cohesion. Keeping the planet safe for future generations. Business leaders know all the buzzwords (and phrases). But do they understand what they actually mean? More importantly, do they know how to pursue them?
A study by the World Economic Forum (WEF) has found that only 29% of corporate board members around the world believe they have sufficient knowledge to effectively challenge management on sustainability plans.
Executives themselves are no better. While they may recognise the urgent need for sustainability, South African research suggests they are untrained and ill-equipped to manage it.
It says: “Many recognise that we are approaching ecological tipping points. But they are simultaneously dealing with competing demands that are immediate, measurable and, in many cases, existential for their organisations.
“The question is not whether climate change matters, it is how to prioritise it in a context where poverty, unemployment and inequality remain urgent and visible.”
The research, by Stellenbosch Business School professor Salomé van Coller-Peter and Stephen Langton Blades, CEO of change management consultancy Elephants in Main Street International, says this balancing act creates a profound dilemma: “How do you justify long-term sustainability investments when they may threaten short-term competitiveness, jobs or affordability?”
In some instances, stated commitment to sustainability is a box-tick exercise. The researchers say: “Even where progress is made, it is often incremental or, as one participant described it, ‘grudging progress’ driven by compliance rather than conviction.”
Executives need expert training, not just to understand the challenges but also to navigate them. Business schools agree. That’s why sustainability is becoming a key part of their education offerings.
Rather like ethics, which for years was allowed to fester unloved as a peripheral subject until business schools themselves were accused of encouraging unethical business behaviour in their teachings, sustainability took a long time to enter the mainstream.
Morris Mthombeni, dean of the University of Pretoria’s Gordon Institute of Business Science (Gibs), says he argued unsuccessfully almost a decade ago for sustainability to become a core business school subject.
At that time, only a handful of schools treated it as such. More do today, but Van Coller-Peter and Blades say the subject is still not given the importance it deserves: “Some programmes address it indirectly. Others treat it as a specialised or elective topic. In many cases, it is siloed in separate [university] faculties disconnected from core leadership training.”
They add: “This means that leaders can complete advanced degrees, including MBAs, without ever deeply engaging with the practical realities of sustainability decision-making. They may understand the concept in principle, but not how to operationalise it in complex, real-world environments.”
How do you justify long-term sustainability investments when they may threaten short-term competitiveness, jobs or affordability?
— Salomé van Coller-Peter and Stephen Langton Blades
Milpark Business School director Frikkie Herbst says the problem may be more fundamental: “There is no common understanding in the corporate world of what sustainability actually means.”
Mthombeni says many senior decision-makers earned their MBAs 30 years ago when sustainability was not an issue. The WEF study says there is an “intergenerational disconnect” between them and younger executives who consider climate change a direct, existential threat.
Mthombeni says the subject is an integral part of Gibs education. Many of its students are in junior and middle management and are therefore gaining practical knowledge that will help them address it in the future.
In an interview, Van Coller-Peter says: “Younger people are keen to confront the threat. They are not concerned just about money. But they are overpowered by senior people who want to keep shareholders happy.”
Regenesys Business School COO Indherani Reddy says future generations of managers are particularly caught up. “Gen Z want to see if you are a contributor to sustainability. If not, they disconnect from you.”
She adds that South Africa has a particularly complicated relationship with the subject. “Our sustainability issues are not as easy to understand as in Europe. Here, we must cope with unequal education and crime and energy and unemployment. We have a massive challenge.”
Several studies say an underlying cause of the slow rate of corporate progress is that sustainability is taught too late. Business schools can play an important role in inculcating it early in management and executive development.
Cobus Oosthuizen, chair of the South African Business Schools Association and dean of postgraduate studies at Boston City Campus, says schools must stop presenting sustainability as a moral need and offer it as something “central to risk and reputation and profit and corporate survival”. He adds: “It is often treated as if it’s a technical add-on.”
Peet Venter, academic area management head at Unisa’s Graduate School of Business Leadership, says that though sustainability is becoming part of the school’s curriculum “in a very pervasive way”, there is still a view that “it is detracting from business rather than adding to it”. Academic director Nellie Swart says awareness of the challenge is no longer enough. It must be converted into action.
Mthombeni says: “If you operate in Africa, you have no choice but to engage in sustainability. More than that, we live in a world that requires every business person to learn about it.”
Banks, miners and energy companies may face the brunt of pressure from climate activists, but every industry faces challenges.
“We are not teaching the ignorant,” he says. “We are teaching the willing. Our students recognise that they can’t rely on governments to fix these problems. Business itself has to resolve them.”
As a business school specialising in teaching entrepreneurship, Gibs can teach the next generation of business leaders sustainability “from the ground up”, he says. “At least, that’s the theory. We want to teach them to identify opportunities in these spaces.”
Ultimately, says Jaap Winter, professor of corporate governance and behaviour at Vrije Universiteit Amsterdam in the Netherlands, successful corporate sustainability requires leaders to shed what he calls “toxic schizophrenia”.
In a paper for France’s INSEAD business school, where he is a visiting professor, he writes: “Ethics, morals, how to be and do good, are reserved for the private sphere of families, friends and neighbours. Meanwhile, in the business world, we are supposed to follow … matter-of-fact laws of the marketplace, of competition and of what investors desire. Our humanity, our human experience and judgment, are often left outside the boardroom.”
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