Tomorrow's sustainable business leaders need a better MBA

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What are we doing here in Oregon to combine natural resource and sustainability economics with business education?

I ask because everywhere I look, I see evidence of tier-one MBA programs joining the wave of using financial innovation and capital markets to create social and environmental impact and financial returns.

My partner at Equilibrium Capital Group, Kipp Baratoff, is changing the world one MBA at a time. He and a group of pioneers in impact investing are teaching a class at the Ross School of Business at University of Michigan. This generation of future leaders coming through our universities sees “AND” where we see “OR.”

That’s the kind of thinking — the absence of a “we can’t do that” mentality — that will take us to Sustainability 2.0, where innovative financial models are employed to implement sustainability in manufacturing, design, natural resource stewardship, low-carbon transportation, energy and the built environment. Not only in the U.S. but in a truly global fashion, where we are exporting our expertise and experience and building alliances in strategic industries.

I recently turned in my grades for the class I’ve been teaching at the Kellogg School of Management. The students were asked to develop an investment fund concept based on sustainable market opportunities. The results were impressive. On the whole, they figured out how to monetize the sustainable benefit and create a market-based return.

One group proposed a fund to support cogeneration facilities for military and university sites that can take advantage of energy savings to close budget deficits and improve security. Another group suggested that an energy efficiency fund could work through service providers and utilities to fund the up-front costs for efficiency retrofits and receive returns from energy savings — not a loan payback. One group proposed a “fair labor fund” that would invest in struggling businesses with high labor cost and provide lean operation expertise and leverage socially conscious branding and fair-labor tax credit opportunities. Another group took on the growing world water problem by suggesting a holistic view of sanitation and water supply.

In a McKinsey Quarterly interview, Garth Saloner, the dean of graduate studies at Stanford University’s Graduate School of Business, talked about how the economic crisis has changed business education. The short answer? It’s about leadership, about innovation and about design thinking — the kind of sustainable systems analysis that will allow truly global leaders to solve the environmental, economic and social problems that are headed our way.

A recent Financial Times story pointed out individual programs at top-tier business schools across the country that are integrating sustainability into their education program. But the piece makes the point that we’re not there yet. We’ve got a long way to go.

We have leading real-world business leaders that have developed and implemented many of the first innovations in sustainable built environment (i.e., adjunct professors). We have leaders in land use policy, tracing back to the urban growth boundary (i.e., the public policy of sustainability). We have a leading natural resource/forestry program and we have a leading supply chain and reverse logistics program in our business school (i.e., the economics of sustainability).

Which brings me back to my original question: Why isn’t there an Oregon MBA that combines our educational assets in natural resource and sustainability economics with business education to create a national level program to train the next generation of sustainability focused business leaders?

Dave Chen is the founder and principal at Equilibrium Capital Group, a board member for the Federal Reserve Bank of San Francisco’s Portland Branch and chairman of the Oregon Innovation Council. Find him via: chen@eq-cap.com www.quuh.wordpress.com, and www.facebook.com/dypchen.