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"A Growth Industry: Business schools are
teaching entrepreneurs how to get rich helping to save the
environment."
Ash Upadhyaya is no tree hugger. The
29-year-old from India has a master's degree in petroleum
engineering, worked as a reservoir engineer at Shell Oil and drives
a Porsche Boxster that gets a measly 20 miles per gallon. Yet he has
spent the past two years studying environmentally sustainable
business at the Stanford Graduate School of Business. "Am I really
driven to do this by my values? The honest answer is no," says
Upadhyaya, who wants to work for a private-equity fund when he
graduates in June. "It just makes good business sense to be
sustainable."
Environmentalists and capitalists
have typically eyed each other with suspicion, even disdain. A new
breed of M.B.A. student thinks it's possible to make a bunch of
green by going green. For some, studying sustainable business
practices just gives them a competitive edge. For others, it's a
fresh way of thinking about business. These eco-M.B.A.s talk about
the "triple bottom line"—people, planet, profit. Thousands are
joining Net Impact, a networking group for business leaders
interested in societal problems. "Business-school students today are
much more interested in social and environmental issues—and in
business solving those issues," explains Liz Maw, executive director
of Net Impact.
Slowly, business schools are catching
up. "This is all student-driven," says Stanford B-school professor
Erica Plambeck. Seven years ago she offered the first environmental
elective at the business school. Today Stanford ranks No. 1 on the
Aspen Institute's 2007 "Beyond Grey Pinstripes" report, which rates
how business schools integrate social and environmental
responsibility into their curricula.
In 2001, when Aspen began ranking
schools, only 34 percent of those it surveyed offered any green
courses. By 2007, 63 percent did. Even the most traditional schools
are weaving in the environment. Harvard Business School students
study cases such as Nestlé's sustainable cocoa agriculture, and the
Wharton School will host a Net Impact conference this fall.
Mainstream schools weren't changing
fast enough for green-business icon Hunter Lovins. The book she
coauthored in 1999, "Natural Capitalism," has become the textbook
for sustainable management. In it, she argues that companies don't
factor the environment into their spreadsheets. "We treat it as if
it has a value of zero, and that's bad capitalism," she says.
Business leaders needed to start thinking differently. So in 2003
Lovins helped found Presidio School of Management in San Francisco,
where climate change permeates every part of the curriculum.
Presidio is one of a handful of schools from Washington to Vermont
now offering a "Green M.B.A." These being business schools, the term
has actually been trademarked and is owned by the Dominican
University of California.
Critics say such boutique business
schools themselves are unsustainable. But Green M.B.A.s insist they
learn traditional skills while fostering unconventional business
values. For the final project in accounting at Presidio, students
analyze both a company's finances and its CSR (corporate social
responsibility). One group gave United Parcel Service credit for
mapping routes so drivers can avoid gas- (and money-) wasting left
turns. Green M.B.A.s take macroeconomics, but it includes the
emerging field of "ecological economics." The cases they study
examine companies like Clif Bar, which makes organic energy snacks.
But it's the atmosphere at Presidio
that makes it so different from Harvard. During a recent class,
provost Ron Nahser walked around the high-ceilinged room at historic
Fort Mason prodding students toward self-examination: "What are you
learning about your calling? Are you feeling the love in the
marketplace? Ask yourself, 'Why am I in this?' " For Presidio
student Taja di Leonardi, it was never for the money. A nature
lover, she wanted to go to business school without feeling as if she
was selling her soul. At Presidio, her quest to design her own green
kitchen grew into a business plan for something she called Ecohome
Improvement. When a storefront became available near her home in
Berkeley, she says, "it was consistent with my values, there was a
need and there was a location a couple blocks away." Since Ecohome
Improvement opened in 2005, di Leonardi has doubled the store's
square footage, increased her staff from one to 10 and seen a 200
percent increase in revenues. Soul intact, she is cashing in.
- By Martha Brant and Miyoko Ohtake
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