Green MBA: How Is It Different from Top MBA Programs?

As we believe that sustainability and business should go hand-in-hand, over the past year, we evaluated over 40 green MBA programs across the United States. Many of these programs have popped up in the last ten years or less and schools with traditional programs, like the University of Michigan and Cornell University, have recently added sustainability specialty tracks or dual majors between their MBA and Master of Science or Environmental Studies programs. Bard College only opened their green MBA program in the Fall of 2012.

In fact, the Graduate Management Admission Council reported that applications for conventional MBA programs in the U.S. declined for the fourth year in a row in 2012, but that demand for specialized business-related graduate degrees is growing. This suggests that green MBA programs that focus in sustainability may gain popularity because they are training professionals in a specific skill set.

Clearly, the demand for these programs is growing, which suggests a growing importance of sustainability in business. For example, in 2010, Accenture surveyed 766 CEOs and found that ninety-three percent believe sustainability will be important or very important to their firm’s success. As Greenbiz reported, shareholders are pressuring companies to improve their efficiency and add renewables to their energy mix. Sustainability is no longer a plus in business, it’s critical to its success.

Green vs. Traditional Business Courses

Typically, Master of Business Administration programs include required core classes (mostly taken in the first year), followed by a suite of electives that cater to students’ chosen specialties or majors. Core courses include business fundamentals like accounting, human resources, economics, marketing, statistics, and others. Sustainable MBAs usually follow this pattern as well, but many programs integrate sustainable business, the environment, and social responsibility into each course. In some cases, a green MBA program will have conventional core classes, then address sustainability in the electives (though these programs are usually from a school with a traditional MBA and a sustainability specialty track).

We decided to compare some of the courses from some of America’s best MBA programs, Harvard and Stanford, with some the most well-known green MBA programs, Presidio and Bainbridge Graduate Institute, to see how these programs differ.

Finance

Presidio Graduate School, which has been deemed one of the best green MBA programs by many, teaches students the traditional tenets of finance along with the importance of analytical tools, such as financial ratios and cash flow. The program also explores non-conventional approaches to investing including socially responsible investment (SRI) models and examines “the relationship between human, natural, and financial capital”. As mentioned previously, Presidio clearly weaves sustainable business ideas into its conventional MBA courses, rather than relying heavily electives.

Another well-esteemed green MBA program, Bainbridge Graduate School (BGI), teaches “Finance, Accounting & the Triple Bottom Line” in two 3-credit courses. The title of the courses themselves reveal that sustainability is incorporated into the curriculum, rather than in a separate elective.

In contrast, Harvard’s MBA program (ranked #1 for best business schools by US News and World Report), “examines the role of finance in supporting the functional areas of a firm, and fosters an understanding of how financial decisions themselves can create value”. Harvard’s curriculum emphasizes analytical techniques, such as discounted cash flow valuation, as well as the principles of finance and functions of markets and banks. The course description doesn’t mention SRIs or sustainability concepts.

Marketing

Presidio incorporates sustainability into “Managerial Marketing”, its marketing course, which teaches students to analyze marketing plans and decisions based on their implications. The course includes an experiential learning component, which involves creating a marketing plan for a partner company, using a “holistic approach”.

Comparatively, Harvard’s MBA program, says the objective of its marketing course is to “demonstrate the role of marketing in the company; to explore the relationship of marketing to other functions; and to show how effective marketing builds on a thorough understanding of buyer behavior to create value for customers”. It covers marketing decisions, elements of the marketing mix, and a brand management simulation.

Stanford, which is ranked second by US News and World Report, states that its marketing course “examines the role of finance in supporting the functional areas of a firm” and evaluates financial decisions and how they can create value. Both Harvard and Stanford’s courses do not explicitly state that they focus on the environment in marketing decisions, even though they teach the same core principles of marketing. Interestingly, Stanford does have a joint MBA/Master of Science in Environment and Resources degree that can function as a semi-green MBA program, though which the student can get a quasi “Green MBA”.

Electives

As previously mentioned, both traditional and green MBA programs do not always incorporate green principles into their core classes, and instead offer sustainability electives that allow students to specialize or pursue special interests in the subject. Harvard offers a few sustainability electives including “Business, Energy & Environment”, which covers the potential for business innovation in conventional energy, alternative energy, green buildings, water, materials and personal mobility. Another elective, Environmentally Sustainable Strategy & Operations, delves into the environmental challenges that senior managers face, and how to tackle these problems and use them to create a competitive advantage.

In comparison, BGI’s green MBA program offers electives in categories that include Business & Sustainability, Entrepreneurship, Intrapreneurship & Innovation, and Leadership & Management in the Context of Change. Each of these include a suite of electives that incorporate sustainability, such as a Seminar in Green Building, Social Justice & Business, and Management in a Changing World. Unlike traditional business schools, every course at BGI considers environmental principles, and all specialty tracks focus on a different element of sustainable business. Sustainability isn’t a piece of the pie - it IS the pie.

Will All MBA Programs Go Green?

Our belief is that as sustainability and social responsibility continue to garner attention in private sector and influence business decisions, all conventional MBA programs will strongly consider adding green electives or incorporate sustainability into their core classes - the schools that have already done so are just ahead of the curve. In my personal opinion, I think it would be ideal to weave green concepts into core courses, rather than merely offering sustainability-focused electives. Sustainability by nature is a broad concept that affects all markets and industries, and has become a factor in many business decisions. Many ideas about the nature of business, including “Conscious Capitalism” believe that true capitalism and sustainability are synonymous, not unconnected, separate ideas. Courses that integrate green ideas and strategies into the MBA candidate’s core classes will not only require all students to learn them, but will also be more true to the realities of business today.