New Musings on Business Sustainability from a Guru in the Field: Part 1

I recently had the honor to interview my former business school professor and mentor Andy Hoffman about his new article in the Stanford Social Innovation Review, The Next Phase of Business Sustainability. Professor Hoffman has been teaching and writing about corporate sustainability for over 20 years, and is a leading academic voice in the field. This latest article reflects his and the industry’s changing perspective on what sustainability means and how it will be accomplished, based on the belief that we are not going to solve the problem unless we change the system. The bottom line? The era of corporations integrating sustainable practices is being augmented by a new age of corporations actively transforming the market to make it more sustainable.

Business Students Prioritize Environmental Sustainability

Before diving into business itself, the article discussed the changing atmosphere at business schools, where future leaders are trained and develop their management beliefs. Surveys show that 88% of business school students think that learning about social and environmental issues in business is a priority, and 67% want to incorporate environmental sustainability into their future jobs. As a clear example of supply and demand, the percentage of business schools that require students to take a course dedicated to business and society has more than doubled since 2001, and specific academic programs on business sustainability can be found at almost half of the top 100 US MBA programs. Another recent article rated the seven best business schools for careers in cleantech.

Hoffman noted that students used to go to public policy/government/non-profit management graduate programs to address these types of topics. Today, more and more believe in the power of business to make a difference. When I decided to go to grad school 20 years ago, I chose business school over policy school because I felt that business was slightly less corrupt than government. I also felt it would help me make more of an impact on society. Who knows if I was right.

Enterprise Integration and Market Transformation

From there, the article discusses two phases of business sustainability. The first is “enterprise integration,” which is founded on a model of business responding to market shifts to increase competitive positioning by integrating sustainability into preexisting business considerations. The second is “market transformation,” where instead of waiting for a market shift to create incentives for sustainable practices, companies are creating those shifts to enable new forms of business sustainability.

Hoffman feels that changing the way we do business is essential to addressing the challenges of environmental degradation. The market is the most powerful institution on earth, and business is the most powerful entity within it.

I asked him about his thoughts on the term corporate social responsibility (CSR), which is a common way to look at these issues outside of the core of business operations. He tries not to use CSR as a term because it makes people’s eyes glaze over when they hear it—it can sound like a peripheral issue like philanthropy or social activism, and not central to the corporation’s purpose. Instead, he aims to teach sustainability as business strategy by translating the issue into the core language of business management, as opposed to a separate and distinct topic.

In the next part of this blog series, I will explore impact investing, capitalism, and energy and mobility.