As depicted in many reports such as the World Economic Forum’s Global Risk Report and award-winning documentaries such as Before The Flood, climate change is the biggest collective threat to our economy and humanity. 

Even if we respect the targets of the Paris Climate Agreement, the economic cost of a 1.5°C temperature increase by 2100 would still be US$ $54 trillion. Humanity has less than a decade of current rates of emissions in its global carbon budget  to stay under 1.5°C of additional warming. However, we are currently on a path for at least 3°C of warming. A 3.7°C temperature increase could cause up to US$ 551 trillion in damage, which is more than all the wealth that currently exists in the world. As the CEO of the insurance giant AXA declared, 4°C of warming this century would make the world "uninsurable.” 

Climate change doesn’t just mean hotter summers. There is a clear possibility that additional warming will trigger feedback loops that cause irreversible tipping points, with the potential to end life on Earth and make many regions of the world uninhabitable. Seven of these 15 tipping points are now classified as ‘active’, with two having already been surpassed.

Climate change is already fueling mass migration and increased conflict. If not enough action is taken, there could be between 150 and 300 million climate refugees by 2050. 

To make things worse, climate change is only one of four planetary boundaries that humanity has already crossed. These boundaries collectively regulate the balance of life on earth, and without them we cannot ensure stable conditions for human existence. 

For instance, our planet’s biodiversity crisis is so acute that many scientists say we are currently living in a sixth mass extinction, one caused by human activity. The United Nations reports that over 1 million species are at risk of extinction, increasing the risk of total ecosystem collapse. The outbreak of viruses like COVID-19 is also linked to habitat destruction, which increases the likelihood of future pandemics. While Indigenous peoples are the best guardians of the world’s biodiversity, their sovereignty is under threat in countries around the world, including Canada.

Another central threat to humanity is the future of water. As documented in the documentary “The Molecule That Made Us”, it would take 6,000 years for the Ogallala Aquifer in the central U.S. to naturally recover from the past 40-50 years of groundwater pumping. On the other side of the world, 97% of water wells in the Gaza Strip are unfit for human consumption due to high salinity and pollution, and  two million Gazans depend on a coastal aquifer that is overpumped. At a global level, demand for water will outstrip supply by 40% in just 10 years.  We need to increasingly understand the direct and indirect links between water and the future of doing business as water scarcity will lead to unprecedented geopolitical and humanitarian consequences. 

Questions to self-assess your knowledge:

• What societal interests, or risks and opportunities, do we have to preserve the environment and biodiversity? What can we learn from nature’s ingenuity? 
• What is the business case for preserving biodiversity? What is the risk for organizations choosing business as usual?
• What can the private sector concretely do to  preserve biodiversity (e.g., financing conservation)? 
• What is the business case for mitigating climate change?

Global economic inequality has reached a historic peak, increasing the risk of economic and political instability.

According to Oxfam’s 2020 report on inequality, the world’s richest 1% now has more than twice as much wealth as 90% of the world’s population. In Canada, the top 1% own significantly more wealth than the bottom 70%. Across high-income countries, middle classes are disappearing, as the cost of living increases faster than inflation and wages continue to stagnate.

The CEO-to-worker compensation ratio has exploded. In the 1950s, a typical CEO might make 20 times a production worker’s income, whereas today’s CEOs make nearly 300 times as much. 

Social mobility has also declined dramatically, so much so that the income of a person’s parents is now the biggest predictor of their future income.

Women as well as Black, Indigenous and People of colour earn and save less due to systemic sexism and racism, and the intersection of these issues. The intergenerational transfer of wealth will most likely increase racial and gender wealth gaps and reinforce existing inequalities.

In Canada, the 87 wealthiest families own as much wealth as the lowest-earning 12 million Canadians, the majority of which is inherited. We are also the only country in the G7 without any taxes on inheritance, gifts, or estates.

There are many underlying reasons for increased economic inequality. However, what unites many of these factors is an underlying economic philosophy, often termed “neoliberalism,” that grew to prominence in the 1980s. Neoliberalism assumes that the unregulated free market will lead to rising incomes for all. The flawed approaches of trickle-down economics and austerity, pushed into the political mainstream by an elite of wealthy conservative business-owners, caused governments across the world to give tax breaks to the upper classes while cutting social services for the rest of society. 

In the words of Amory Lovins, “markets make a good servant, a bad master, and a worse religion.” We must overcome the ideology of market fundamentalism, and work to rebalance power between the public and private sectors. 

Questions to self-assess your knowledge:

• Have you studied the systemic historical explanations for today’s inequalities? 
• What are flaws of neoliberalism, and why is it incompatible with a sustainable world? 
• How can we overcome the myth of meritocracy and self-determination, which assumes that most wealth accumulation is purely a result of talent and effort rather than privilege or access? What are the implications for business leaders who want to give back to society? 
• How does your inheritance of economic capital, cultural capital (i.e., general culture), and social capital (i.e., family’s network) impact your own life?
  

The prosperity of North American economies was in large part built through the legacies of systemic racism, colonialism, and neocolonialism. Former colonial powers ‘created’ much of their wealth through the theft of natural resources from colonized communities through centuries of land dispossession, enslavement, and genocide.

Not only is the climate crisis caused by those injustices, but these inequalities themselves are exacerbating climate injustice. The richest 10% of the global population, which includes people with salaries above C$ 45,000 a year, were responsible for about 52 % of global emissions between 1990 and 2015. This does not include prior historical emissions from the Industrial Revolution, as can be observed in the Carbon Map. Countries that have contributed the least to the climate crisis are due to suffer the most, and previously colonized countries are among those most exposed to climate risks.

As future business graduates, we need to understand this glaring inequity by keeping in mind the fact that the average salary of individuals with a Bachelor of Business Administration (BBA) is C$ 59,000, making us part of the richest 10% of the global population. 

If Canada integrated historical responsibility into its climate commitments, our fair share to limit global warming to 1.5°C would consist of reducing GHG emissions by a total of 140% below 2005 levels by 2030, with reductions of at least 60% domestically. Canada’s new total climate reduction targets are still insufficient, amounting to 40-45% below 2005 levels.

Even within high-income nations like Canada and the US, climate vulnerability and air pollution perpetuates environmental injustice. Lower income communities, who also tend to be disproportionately Black, Indigenous, and People of Colour, are more likely to suffer from respiratory diseases, as the least expensive housing is often on busy roads and next to industrial plants, amongst other reasons. For example, Black Americans are exposed to 56% more pollution than they cause, while white Americans breathe 17% less air pollution than they produce. In Canada, similar patterns of environmental racism exist with Indigenous Peoples and other racialized groups.

While many people in high-income countries fear overpopulation, it is important to understand who truly consumes most of the world’s resources. Americans represent less than 5% of the world’s population, but consume almost 20% of the world’s energy and produce almost 20% of the world’s trash. Canadians produce three times more carbon emissions per capita than the G20 average. Our main issue is not overpopulation, but rather a poor and unfair distribution of resources. 

It is estimated that there will be as many as 150-300 million climate migrants by 2050, many of whom will be displaced regardless of what actions we take today. While most will migrate locally, Canada needs to understand better how climate change will impact immigration and prepare itself better to integrate these newcomers into our society and economy. Beyond the climate responsibility we have towards these migrants, immigration represents a large economic opportunity as it can counter the aging of our population while also growing our economy and responding to the current significant labour shortage . Simultaneously, we need to learn from mistakes from other progressive countries like Denmark who have eroded faith in social democracy by creating a form of “nationalized welfare state” that undermines the social safety net through undemocratic reforms while simultaneously excluding migrant populations. Canada has a responsibility to avoid a similar path in order to keep our borders open, especially given the growing amount of habitable land we have. While many of the solutions will have to come from the public and social sectors, the private sector need to support these changes and understand the opportunities it presents.  

Stabilizing the climate requires keeping carbon in the ground and out of our atmosphere. However, many of the largest pools of untapped carbon are on lands controlled by low-income peoples who have contributed little to climate change. It would be unjust to expect these countries to forgo developing their energy resources, and the related economic gain, in order to solve a problem that was disproportionately caused by wealthy nations. In the interest of advancing climate justice, countries that have economically benefited from fossil fuel development should compensate low-income countries to keep their carbon in the ground or out of the atmosphere. 

There are many ways for wealthy countries to honor our climate debts without incurring steep financial costs. We could erase the foreign debts currently owed by low-income countries in exchange for climate action, or loosen green energy patents and share our intellectual property. Moreover, compensation costs should not come from taxpayers but rather the corporations most responsible for this crisis. Effective instruments could include polluter-pays measures, a tax on financial transactions, and reductions in fossil fuel subsidies. 

Questions to self-assess your knowledge:

• How has the process of colonization contributed to power imbalances between modern nations and communities? 
• What are some innovative business practices that have emerged from Indigenous communities and emerging nations?
• What stories are you being taught about the role of Indigenous leadership in building more resilient and prosperous communities?
• What can your current or future business do to integrate climate justice within its mission and operations?
  

As populist movements continue to emerge all over the world, Canada’s own internal conflicts are increasingly on display.

The tension between provinces has heightened as regions dependent on oil and gas extraction, such as Alberta, suffer from an economic crisis caused by low energy prices. As Canadians, we must be able to acknowledge and appreciate the economic benefits created by our oil and gas sector over the past several decades, which has produced and attracted some of the world’s top energy innovators who will be crucial for the necessary energy transition. The crisis of our energy sector is not just Alberta’s problem, but Canada’s problem. Instead of working at odds with one another, our governments must collaborate to set the parameters for innovation. Political certainty on emissions restrictions, in line with our planetary boundaries, is necessary to support our transition to a net-zero emissions economy by 2050. 

However, the green transition must also be socially just, with training and support for current workers in high-emitting industries to reskill and find new opportunities in a low carbon economy. The good news is that green investments, such as spending on public transit or building retrofits, are some of the most effective job creation instruments that are available. Economists have found that of the five recovery policies with the greatest economic impact per dollar spent, four are related to decarbonization. At the same time, we must understand that adjusting to the green transition is not as simple as finding a new job, and that there is a need to support affected communities in psychologically and culturally adapting to a new reality. 

It is also critical that we acknowledge and respect our country’s two official languages. The climate action space is frequently monopolized by English-speaking individuals and organizations, and efforts to ensure the flow of information from/to Francophones are often lacking. This is particularly problematic given that Quebec is one of the few jurisdictions in the world that produces nearly 100% renewable electricity, with the potential to become net negative in its emissions. Quebec also hosts the country’s largest Social Economy with close to C$50 billion dollars in revenue, and offers unique low-carbon business opportunities for companies across the country. This potential, currently threatened by recent and upcoming projects, could help the rest of the country transition to a low-carbon economy. We need to recognize the unique historic leadership that Quebec has previously brought, and work to overcome discrimination faced by Francophone communities located in other provinces.

Many other provinces and territories are also home to unique and innovative ideas. For instance, British Columbia recently became the first province in the country to create a legislative framework which supports companies who want to operate in a more responsible manner for a public benefit. The Manifesto’s subsequent statements and proposed solutions must be understood in light of these provincial realities.

Questions to self-assess your knowledge:

• What are you doing to extend your network across the country and understand the politics of other provinces?
• Do the speakers invited to your classes and school events represent a diversity of provinces and territories?
• What are you doing to ensure the knowledge you produce and the events you organize are accessible to both Anglophone and Francophone people?

The movement for “corporate responsibility” is showing serious limitations. Many companies work behind the scenes to shrink the welfare state by lobbying against environmental and social regulations, while simultaneously performing charitable acts that have little overall impact and mainly serve to improve brand reputation. 

Companies that identify business opportunities in solving social and environmental problems will find themselves better equipped for the necessary capitalist reformation. This is the idea that underlies Creating Shared Value (CSV) through the Triple Bottom Line (TBL), which integrates the creation of positive social and/or environmental impact within a company’s core business model. Certified B Corporations, which include almost 4,000 companies around the world across 150 industries, are an example of this new type of business.

There are many examples of successful business decisions that balance profit with the planet and people. A recent report by Corporate Knights details the top 50 business moves that helped the planet over the past 50 years. In addition, Project Drawdown has identified the 100 most effective climate solutions that also represent sustainable business opportunities.

In an era when employee activism is becoming more powerful than “CEO activism”, it is crucial to equip the next generation of business leaders to become social intrapreneurs who can help their companies evolve from the inside out. Employees must be able to understand the difference between greenwashing and impactful corporate sustainability. Open source materials are available to support employees including this anti-greenwashing guide. CEOs and senior leaders must also support employee activism and encourage employees to donate their time to important community issues.

However, “doing good” cannot only rely on volunteerism anymore. The government must set the planetary and societal parameters in which corporations can operate to ensure that the interest of society does not come after the interests of shareholders. Until appropriate regulations are enacted, collaborating with competitors and anticipating future regulations can also bring along innovative solutions. 

Questions to self-assess your knowledge:

• Are you able to discern between impactful corporate sustainability and greenwashing in your future employer? 
• Do you feel like you are equipped to spot new business opportunities which might tackle environmental and/or social issues?
• How can you change the core purpose of a company?
• What crucial role can regulations play in tilting the playing field and ensuring more companies are incentivized, and sometimes forced, to change? 
• Are you able to identify and relate to the needs of a broad group of stakeholders that are impacted by your current or future employer? How are those needs recognized and considered in decision-making within the organization?

In 2015, the United Nations announced the Sustainable Development Goals (SDGs), a global agenda for 2030 which was adopted by all UN Member States.

The SDGs provide a blueprint for shared prosperity between all people and the planet we inhabit. The 17 SDGs represent a 12 trillion dollar opportunity for businesses by 2030. 

To turn these goals into a reality, businesses can rely on the UN Global Compact, the world’s largest corporate sustainability initiative, which provides the necessary tools, education, and networks for businesses to become better corporate citizens.

To alter our approach to sustainable management education, business schools need to take the lead and set new benchmarks. For this purpose, the UN Global Compact created the Principles for Responsible Management Education initiative (PRME), which developed the SDG framework for business schools and established a roadmap for integrating SDGs into curricula, research, and partnerships.

Despite these global efforts, 75 years after the creation of the United Nations and 5 years into the implementation of the 2030 agenda, “no country is on track to meet the milestones set out by the UN,” according to the UN Global Compact. 

While many companies are embracing the SDGs, they still often lack the strategy, tools and culture needed to transform those commitments into concrete actions. This situation leaves space for businesses to resort to SDG-washing: 72% of firms cite the SDGs in their reports, but only 23% actually integrate them into their corporate strategy.

Questions to self-assess your knowledge:

• What are some strategies to avoid SDG-washing? 
• How can you link SDG targets and indicators to the business case for sustainable development?
• How can businesses help achieve the SDGs while staying within planetary boundaries?

Sustainable supply chains can play a vital role in creating vibrant communities at the national and international level. 

66% of global consumers say they’re willing to pay more for sustainable brands. However, with consumer trust in decline, organizations will have to be more transparent to avoid accusations of greenwashing. To regain that trust, organizations must stop shifting responsibility for sustainable consumption onto consumers. 

Most corporations do not include environmental or social criteria in their procurement processes. To counter this trend, new frameworks must be taught and employed. One Canadian example is social procurement, which aims to capture positive economic, environmental, and social impacts from purchases for local communities. For international operations, organizations can measure the impacts of their products or supply chains by using life-cycle assessment and social life-cycle assessment. The UN Guiding Principles on Business and Human Rights is another framework that clearly outlines what responsibilities businesses have to respect human rights. 

Businesses must also move to advance the ‘circular economy’, with supply chains that are regenerative by design. Companies must be responsible for products at the end of their lives, ensuring that all materials are kept in use and that resources are restored back to the Earth. 

In 2019, a coalition of 34 leading multinationals with revenues of US$1 trillion signed a business pledge to combat inequalities through their supply chains by ensuring a better distribution of economic benefits, helping to advance prosperity and resilience in the communities where they operate.

Questions to self-assess your knowledge:

• How can you use the life-cycle assessment to measure environmental and social impacts of products, services and processes throughout the supply chain? 
• What kind of support would companies need in the transition towards more sustainable procurement guidelines? 
• What benefits are associated with improving the welfare of local communities where companies operate?

In order to meet Canada’s climate goals under the Paris Agreement, we cannot rely solely on the existing Pan-Canadian Framework, which permits increased emissions from the oil and gas sector, presents no plan for up to 20% of proposed reductions, and includes a carbon price that is too low to be meaningful. 

There are six proposals advanced by Corporate Knights in their recent Building Back Better report that would put Canada’s economy on a path to a clean economy. These proposals include: 

1. Making Canada’s homes and buildings more energy efficient; 
2. Dramatically accelerating the adoption of electric vehicles and promoting active mobility;
3. Greening the electricity grid;
4. Building a circular, zero-waste economy while decarbonizing heavy industry;
5. Reinvesting in our natural capital with reforestation and better land management;
6. Creating a Natural Resources and EV Innovation Fund to stimulate innovation in low-carbon commodities and drive Canada’s competitiveness on the world stage.

The Green New Bill campaign has demonstrated that for every C$20 invested in a green and just recovery, C$308 would be contributed to Canada’s GDP over the next 10 years. If executed simultaneously, these proposals could create more than 6.7 million quality job-years of employment, deliver C$44 billion in annual energy savings to Canadians, and reduce greenhouse gas emissions by a third. 

To prevent more than 2 °C of warming, Canada must keep 85% of its fossil fuels in the ground. In order to do this, Canada must institute a legally-binding carbon budget, similar to the UK law that has reduced emissions by 51% since 1990. This law must require Canadian companies to leave fossil fuel reserves unexploited, and work together to provide a just transition for all oil and gas workers.

The ‘Fourth Industrial Revolution’ is harnessing the power of digital technologies to create a smart grid system that will dramatically accelerate renewable energy adoption. However, throughout these much needed decarbonization efforts, we must avoid unintended side effects which could undermine our climate efforts. These include: rebound effects (i.e. savings from energy efficiency that cause increases in other carbon-intensive behaviour); problem-shifting technologies (i.e. solutions to certain problems that create new environmental issues); or cost-shifting schemes (i.e. the externalisation of environmental impacts from high-consumption to low-consumption countries), among others. 

These unintended effects could dramatically hinder the ability of the government and companies to achieve the pledges of carbon neutrality by 2050. The latter already present serious limitations as carbon-offsets don’t work as much as we think, and pledged reductions don’t include scope 3 of emissions which account for the large majority of a company’s emissions. There are many other myths and misleading assumptions about net zero targets that we need to understand, as the world’s leading climate scientists have frequently explained. 

Finally, Canada’s transition to a low carbon economy will also require us to devote much more attention to small and medium-sized enterprises, which employ 90% of the population and emit 200 million tonnes of CO2 annually. 

Questions to self-assess your knowledge:

• What can businesses do to help Canada meet its Net Zero climate target? 
• Are you learning about nature-based climate solutions? 
• In your own life, what are the 10 most impactful ways to be more sustainable and contribute to our society’s transition?
• What are some unintended consequences of decarbonization initiatives which might undermine a company’s climate efforts?
• How many case studies about sustainable small and medium enterprises have you studied?

The financialization of our economies has increasingly disembedded capital markets from the real economy. A recent report by the Bank of International Settlements determined that growth in the financial sector tends to crowd out real economic growth. Since the 1980s, corporations have invested less than 10 cents of each borrowed dollar, while shareholder payouts have nearly doubled. When capital does flow to the real economy, it usually doesn't consider social and environmental impacts. 

The largest transfer of wealth in world history will happen over the next 10-15 years, which gives young generations a huge opportunity to manage this wealth responsibly. If today’s youth remain uneducated on their responsibility to invest sustainably, it will be a disaster for society and the environment. 

Responsible finance aims to invest in companies that have clear strategies to improve their environmental, social, and governance (ESG) performance. Many investors are able to both minimize the negative impacts of their investments and keep market-rate returns. In 2019, the total funds invested in responsible finance rose to US$30 trillion. Despite this exciting momentum, “passive management at the global level remains largely - at 95 or 98% - indexed to past indices and not to indices compatible with a 2 degree trajectory,” according to Philippe Zaouati (CEO of Mirova). In this way, a massive reallocation of capital has not taken place. Asset managers must use the power of shareholder engagement to pressure companies to become more sustainable. 

Impact investing, by contrast, aims to invest in enterprises whose core purpose is to tackle social or environmental issues. In 2020, the global market size for impact investing was US$715 billion. The Canadian impact investing landscape is also growing, as major banks are committing to impact investing, place-based and gender-focused investments are on the rise, and the federal government has created a C$755 million Social Finance Fund.

It is critical to understand the differences between responsible finance and impact investing, and how they can complement one another. 

The annual financing gap in positive, impact-driven capital that prevents the SDGs from being fully realized is US$2.5 trillion per year. While global charitable donations are necessary to help address this gap, they won’t solve the SDGs without significant private investments.

Unfortunately, most uses of capital are focused on achieving market-rate returns, which presents serious limitations when it comes to combating certain social and environmental issues. Investors and companies need to recognize that not all high-impact solutions can be achieved alongside competitive market-rate returns; sometimes investors need to accept a lower financial return in order to achieve a higher social and/or environmental return. Some say you can’t do good and do well, while others believe you can do it all: the truth lies somewhere in between. 

While increased capital has recently been allocated towards solving  issues like racial and gender inequality, impact investors need to share power as well as capital. To do so, they need to evaluate power dynamics in investment processes. A partnership between Australia’s Department of Foreign Affairs and Trade (DFAT) and the Canadian government’s Social Finance Fund (SFF) has developed 7 questions to help organizations to evaluate equity in their investment processes:

1. Whose knowledge Is valued?
2. Who Is seen as ‘worthy’ of access to capital and resources?
3. Who decides?
4. Whose time frame matters?
5. Who gets to know what, when?
6. Who Is taking what risk?
7. Who Is incentivized to do what?

Financial markets are now contending with new sustainability-related risks that may drastically impact asset values. One risk is ‘stranded assets’, or the fact that proven oil and gas reserves might become economically unrecoverable as nations take greater action on climate change. With the rapid rise in support for the Task Force on Climate Related Financial Disclosures, companies are beginning to disclose climate-related risks in their financial filings, and prepare for policy responses such as the Canadian carbon pricing system that will internalize costs which are currently externalized. Finally, there is an emerging recognition that infinite economic growth, upon which most financial valuations are predicated, cannot continue indefinitely in a world with finite resources.

Questions to self-assess your knowledge:

• How can you integrate non-financial indicators in investing criteria?
• What are the pros and cons of divesting from fossil fuels?
• What can you do to make sure your bank is investing your money according to environmental, social and governance (ESG) criteria?
• What is the purpose of capital? Is it to always grow our wealth exponentially, or is it also meant to combat systemic inequalities, decolonize wealth, and help communities flourish? 
• How do we build risk appetite in investors and/or new financial mechanisms (e.g., blended finance) to support innovative solutions at different scales of impact (particularly those led by "unusual suspects" of the investment world, such as youth and grassroots leaders)? 
• How can investors diversify their portfolio’s enterprises (with a variety of financial and impact returns they can generate) to maximize their impact while keeping a good overall financial return? 
• What are some measures of a reform plan for the financial system to ensure the creation of a socially just and prosperous world? 

There are countless career paths in trying to make the world a better place. Sustainability initiatives are present in almost all industries and sectors, and they require very different types of skills. 

We now need more career resources to support students who want to integrate sustainability within their career such as: Five Tips on How to Launch your Sustainability Career, 4-Step Guide to Starting a Career in Sustainability for Undergraduate Students, Interviews by subject area, and more.

PwC’s Workforce of the Future survey found that 88% of millennials want to work for a company whose values reflect their own. Unfortunately, during our current economic downturn, recent graduates are more likely to take any job available to make ends meet, even if it doesn’t align with their skillset or long-term career aspirations.

Young people can bring new perspectives, experiences, and skills that are crucial to addressing our country’s challenges. Canada cannot afford to have a generation who struggles to launch their careers. 

While not everyone will have a job in sustainability, sustainability issues will affect all jobs. The transition towards more sustainable organizations will require a shift in mindset from the entire workforce, not just a minority of sustainability professionals. 

This is why schools have a responsibility to embed sustainability education throughout all specializations to ensure that students build the skills that will prepare them for the future. Sustainability knowledge should be seen and taught as an ethical responsibility and a competitive advantage. This can partly be done through offering more case studies and courses on sustainability (e.g., sustainable accounting, purpose-driven marketing), or even introducing a mandatory sustainability course.

Questions to self-assess your knowledge:

• Do you have a sustainability-related student organization at your business school that could help you build practical skills, knowledge, and a network? 
• Does your school actively seek donors for advancing sustainable business education and career resources, given the shift towards this kind of change? 
• Is your school offering work-integrated learning (WIL) programs related to sustainability? 
• Do you have a list of specific questions to ask yourself regarding the impact of your future employer? 
• Are your career advisors trained about the large diversity of career paths in sustainability? Does your school facilitate mentorship and career advice from sustainability professionals? 
  

We are in the midst of a global reckoning with racial injustice, including in Canadian business schools.

Despite the fact that social and environmental issues disproportionately affect low income and minority groups, most C-suite leadership and boards still consist of white people, mostly men, and/or people with privilege. This reality also applies to management and boards of universities.

With diversity being confirmed to boost innovation and financial results, a lack of diversity in gender, ethnicity, race, ability, and sexual orientation is increasingly seen as a hindrance, or even a business risk.

Many organizations are resorting to diversity programs and training to address this risk. However, research shows that most diversity programs fail. This occurs for many reasons, including that: 

1. Programs are not led by the people they seek to target, and actively exclude younger people;
2. Programs are not given adequate resources or influence within organizational operations;
3. Programs fail to take systemic racism into consideration;
4. Programs fail to address the holistic change that is required to create truly inclusive spaces. 

There is also a trend towards “performative allyship”, where organizations speak out against racial injustice but do not follow with robust and meaningful action. Authentic allyship is an active practice. In an organization, the leadership team needs to take the time and make the effort to personally transform their perspective and way of being.

Canadian companies in particular must acknowledge and address their diversity problem. According to a study by Corporate Knights, out of 1,639 board members from 178 Canadian companies, only 74 positions were held by persons of colour. 37% of large Canadian companies do not have a single racially diverse board member. Companies must go beyond seeing diversity as merely an HR problem by hiring a Chief Diversity Officer, distributing skill-building opportunities, mapping the appropriate metrics, and creating a sense of belonging. 

If we want to achieve an inclusive and fair future of work, we must also work to meaningfully advance prosperity for the Indigenous peoples of Canada. In Canada and globally, Indigenous peoples have demonstrated that generational knowledge of the environment and community-building contributes innovative insights into tackling environmental and social issues. In other words, the Canadian economy cannot succeed if the Indigenous economy fails. 

At the university-level, business schools need to take action on the Truth and Reconciliation Calls to Action and promote the success of the Indigenous economy by integrating Indigenous content in the core business curriculum and actively including more Indigenous students. If the gap in educational, entrepreneurial, employment, and health opportunities for Indigenous communities across Canada was closed, it would result in an increase in GDP of C$27.7 billion annually, helping to expand the workforce and raise societal cohesion.

Anti-racist change also needs to happen throughout a company’s operations and partnerships. Future business leaders also need to understand how police often protect corporate interests over people. There are ethical and financial reasons for why this is wrong, as data shows that investors are harmed when companies do not disclose information about violence or lack of Indigenous consent. Companies and governments must also increase the number of Indigenous-owned partners in their supply chain and give Indigenous communities a seat at the table and enough resources to determine their own future. 

While corporate diversity programs need to be extended and improved, companies also need to avoid corporate race-washing by going beyond diversity workshops and other HR quick fixes. Evidence of corporate hypocrisy is everywhere; Amazon has plastered "Black Lives Matter'' all over its website, and yet still refuses to give its largely Black warehouse workers paid sick leave or the right to unionize. Larry Fink, CEO of the investment firm BlackRock, claims that racism "must be addressed on both a personal and systemic level," and yet BlackRock is one of the largest investors in private prison operators GEO Group and CoreCivic. 

Far too often corporations treat corporate social responsibility, and diversity practices in particular, as a form of public relations or ‘impression management’. Many examples of this are given in the recent book “The System: Who rigged it and how we fix it” by Robert Reich, who served under three American Presidents including President Obama’s Economic Transition Board. Indeed, it is not uncommon to hear prominent corporate executives, such as Jamie Dimon, the CEO of JP Morgan Chase and Chair of the Business Roundtable which gathers the CEOs from America’s leading companies, publicly condemn income inequality, systemic racism, police brutality, and a myriad of other issues. However, their response to these issues is typically to donate money to charity or begin a high-profile campaign, such as JP Morgan’s $500 million ‘AdvancingCities’ initiative, without fundamentally addressing the root causes of these problems. Even while corporate social responsibility initiatives have gotten more generous today than ever before, tax cuts and corporate welfare continue to limit the public funds available for vital social programs that disproportionately benefit low-income and marginalized groups. Indeed, while professing to care about the wealth gap and the disappearance of the middle class, Jamie Dimon helped successfully lobby Congress for a 14% cut in corporate taxes in 2017. Overall, JP Morgan Chase has made low-cost loans, renovated affordable housing, and put money into workforce training. As explained by Robert Reich in his book "These are noble efforts, but they are tiny relative to the size of the problem they are meant to address. They are also small relative to JPMorgan’s net income, which in 2018 was roughly one hundred times the size of its worker-training program. I should also point out that its $30.7 billion net income that year was more than a third higher than its net income the previous year. About half of the gain between 2017 and 2018 came from savings from the giant corporate tax cut enacted at the end of 2017.” 

Similarly, while the Business Roundtable has publicly declared that today's corporations must move towards a more inclusive form of stakeholder capitalism, it has also quietly lobbied against any and all increases in the minimum wage. 

If corporations do not commit to paying their fair share in taxes and ending their anti-progressive lobbying, it will not be possible to reduce the systemic inequalities that continue to obstruct social mobility for low-income and racialized communities.

Fixing the Canadian tax system, as discussed later in Statement 17 of the Manifesto, will help ensure corporations and the privileged classes pay their fair share to support the social services that serve less privileged communities with an overrepresentation of BIPOC individuals.

Questions to self-assess your knowledge:

• What are you being taught to understand and support decolonization and anti-racism efforts in a company? Is some of this knowledge shared with you by Black, Indigenous, and people of colour (BIPOC)?
• What are you being taught to become a meaningful ally to BIPOC?
• Has your school gone beyond evaluating its diversity by taking concrete steps to increase diversity on governance committees and working to counter whiteness and white supremacy?
• What is your school doing to decolonize and Indigenize your courses and academic programs?

A key focus of the UN SDGs is intergenerational equity, which means valuing the needs of present and future generations equally. In order to achieve a better world, youth must be at the table. 

Youth are capable of pushing the conversation further, with initiatives like the Montreal Youth Summit on Sustainable Business. We also have a proven track record of prioritizing and implementing climate solutions.

Companies around the world are starting to reap the benefits of working with young people in developing innovative ideas and preparing their businesses for the future, while simultaneously helping to create the next generation of leaders.

An increasingly popular practice is to establish shadow board programs to integrate diverse youth within advisory, guidance, or governance capacities. It is important to create youth advisory boards, integrate youth onto Boards of Directors or Strategic Advisory Boards, and work with youth-led organizations throughout all workstreams. 

When employees have a role in decision-making, companies are often both more profitable and more sustainable. Business schools should adopt this principle by having at least 30% student representation on their governance committees. 

The Positive Impact Rating, which was launched at the 2020 World Economic Forum, is a useful tool for youth in business schools to assess the positive impact of their institution. This framework helps transition business schools from trying to be the best in the world, but rather the best for the world. 

Questions to self-assess your knowledge:

• Young people are driving collaborative and innovative climate solutions, but often lack funding and resources for capacity building. What are you being taught about support for youth-led climate solutions?
• Do you feel prepared to participate in governance structures to prevent environmental and social injustice? 
• What can your school do to change recruitment culture by emphasizing that sustainability knowledge is a competitive advantage (even for more traditional positions)?

The private sector alone will not be able to fully address our systemic challenges. There is currently an over-reliance on private sector solutions, which often displaces the roles of the public and social sectors. In fact, there has been a massive transfer of wealth from the public to the private sectors; private wealth in most rich countries rose from 200-350% of national income in 1970 to 400-700% today, while net public wealth has declined in nearly all countries. 

A rebalancing of society is necessary to achieve sustainability goals. This means we need to reign in the power of the private sector to make more space for social and public sector initiatives. 

Making progress in dealing with today’s grand challenges will require that the institutions of government, business, and community reinforce each other’s efforts through collaboration, rather than working at cross-purposes.

We need to recognize, respect and value the differences between each sector. Private sector management practices and frameworks should not be systematically transposed on other sectors, as the profit motive is not pertinent in every sphere of our lives. In particular, not-for-profit organizations bring tremendous value to society and offer meaningful careers.

Questions to self-assess your knowledge:

• Are you familiar with the skills required to become a tri-sector leader? 
• Are you aware of the differences in approaches between private, public and social sectors and their respective levers for action and change?
• Have you sought out internships or research projects outside of the private sector?
• Does your information and learning experience stem from various disciplines, backgrounds and sectors? Or does it mostly come from select business schools and private sector organizations and individuals?

Research demonstrates that as people attain power, they are more likely to engage in unethical behavior. The effects of power can even be compared to a form of brain damage, as power makes people less risk-averse, more impulsive, and less skilled at reading people and situations.

Many companies deliberately break laws and pay the subsequent fines in order to raise their overall bottom line. To avoid corporate malfeasance, it is crucial that businesses follow ethical guidelines and create clear structures for accountability and transparency. 

Today’s business environment contains many ethical dilemmas which managers must be equipped to contend with. The rise of digital technologies has enabled the emergence of an entirely new business model: ‘surveillance capitalism’. The accumulation and manipulation of personal data poses great risks to our society, as it facilitates the commodification of human nature, an increase in mental health issues, political polarization and fake news, and many other problems. It is possible to handle data in an ethical way, but we need to be taught how.

Business ethics is also particularly important for the public relations sector, where unethical decision-making has permitted firms to conduct complex disinformation campaigns to undermine the scientific consensus on the effects of tobacco use, the dangers of climate change, and other threats. 

We face a new leadership imperative, one with a greater focus on empathy, transparency and purpose. Tomorrow’s leaders cannot just be strategically competent: they also need to be ethical-decision makers.

Questions to self-assess your knowledge:

• What have you learned about ethics in finance (see Appendix C)?
• If you are in marketing, have you been taught about community-based social marketing, a new framework that helps businesses conduct marketing more ethically?
• How does ethics apply to your discipline? 
• How can you align work with purpose to help build back better after COVID?

While many corporate sustainability initiatives are genuine and impactful, they primarily happen outside the democratic arena and haven't helped to re-balance power in our society. 

Without the mediating effect of a strong public sector and a redistributive taxation system, any democracy with a free-market economy runs the risk of turning into an oligarchy.

Since the 1970s, wealthy business interests have been organizing as a class, with corporate lobbyists rolling back progressive regulations that they see as constricting business activity. They have also created influential think tanks to promote pro-corporate ideas that include cutting public spending, privatizing state assets, and erasing antitrust laws to permit the growth of monopolies. 

Labour power has decreased, as union membership declined and worker protections were eliminated, ensuring that productivity gains have not translated into wage increases. Community membership and group affiliation have declined as citizens have become apathetic about politics and disillusioned about the future. These shifts have led to a dangerous political context in which the main cleavage is no longer between left and right but rather between elites and masses. 

With the rise of populism across the Western world, business students have a responsibility to anticipate and understand the limitations and consequences of excessive deindustrialization and free trade agreements on working-class jobs. Given the historical role of hedge funds and some parts of private equity in pushing for the offshoring of manufacturing plants to maximize profits by replacing a more “expensive” workforce, but also in encouraging companies in less socially responsible behaviors in general, the next generation of business employees and leaders need to systematically understand the consequences of their actions in order to avoid reproducing past mistakes.

Many business school students end up in traditional management consulting or investment banking. While these are beneficial career choices for some, too many students fall into the “prestige career” trap. Many of them are socially progressive and actively speak out against white privilege, misogyny, or climate change. However, when it comes to issues of class and power, they often avoid the question. Although they can see the political ramifications of rising income inequality, few will come to question the system which disproportionately benefits them. This is because their jobs are often dedicated, directly or indirectly, to helping the wealthy obtain even greater wealth and power. As former American Presidential candidate running for New York City mayor  Andrew Yang explains, too many of the most educated people in our society choose career paths that don’t necessarily build value for society. We should resist the invitation “to figure out our entrepreneurial drive later” and rather build things now and create meaningful innovations and jobs.  

Analysis by Yale Law Professor Daniel Markovits has identified the critical role that management consultants have played in amplifying income inequality and concentrating economic power among the elite managerial classes. Prior to the neoliberal revolution of the 1970s, many businesses had a more democratic approach to management, with several layers of middle managers that coordinated production and helped build value for the firm. However, after the rise of ‘shareholder primacy’, management consulting firms began advocating that companies pursue relentless downsizing and cost-cutting in order to boost the bottom line, reducing headcount regardless of whether the firm was struggling or doing well. 

The disappearance of middle management is directly related to the rise of management consulting, an industry which allows corporations to replace lifetime employees with “short-term, part-time, and even subcontracted workers hired under ever more tightly controlled arrangements, who sell particular skills and even specified outputs, and who manage nothing at all.” Conversely, the decline of middle management saw an enormous rise in the power of C-suite executives, who boast immense powers of command and capture virtually all of management’s economic returns (e.g., whereas at mid-century a typical large-company CEO made 20 times a production worker’s income, today’s CEOs make nearly 300 times as much). As Markovits’ research shows, the rise of management consulting is a core reason for today’s staggering income and wealth disparities. While certain specialized consultants can still bring a lot of value to companies, we cannot expect that the management consultant class will attempt to dismantle a system that primarily benefits them--no matter how brilliant they are.

It is also highly likely that artificial intelligence will displace many workers from the economy and contribute  to the creation of a ‘useless class’. Researchers at Oxford have estimated that 47% of all current jobs in the United States will be at ‘high risk’ of automation at some point over the next two decades. The McKinsey Global Institute has predicted that up to 375 million people worldwide could see their jobs disappear by 2030 as a result of digitalization. Although labour-saving technologies can grow the economy over the long-term, most workers displaced by automation will be forced to work for significantly lower wages in forms of precarious employment (i.e. in the ‘gig economy’) or face long-term unemployment. In the worst case scenario, displaced workers may respond to their economic dispossession by voting for demagogic politicians; in the United States, for example, Donald Trump made his greatest electoral inroads in Rust Belt states where the ‘robot revolution’ had resulted in significant job losses. Corporate managers must learn to consider the impact of their decisions on the communities they operate in while also investing in digital literacy training for employees. Governments must also respond to this emerging crisis by rolling out social welfare mechanisms, such as a Universal Basic Income, that can ease the burden of structural unemployment.

There is another way forward, one which takes concrete steps to redistribute power in our society. The ability of businesses to influence politics must be constrained through campaign finance reform and restrictions on lobbying. Workers must be given representation on corporate boards, and corporations must reinvest in their own employees rather than rewarding shareholders with buybacks and dividends. Workers must be allowed to unionize, given that unions can help increase wages by 20%, increase job security, and provide necessary fringe benefits. Most importantly, we must overcome the doctrine of shareholder primacy by ensuring that corporations have a legal responsibility to respect the interests of all their stakeholders, not just shareholders.

Questions to self-assess your knowledge:

• How does our current economic system concentrate power at the top? 
• How much are you engaging with the notion of class and power in your studies, personal and professional conversations?
• Are you considering purpose-driven careers rather than the mainstream “path to success” which often reinforces the inherent problems of our system?

Democracy should be extended beyond government and into the private sector. Collaborative decision-making is critical in order to tackle today’s grand challenges. In fact, some argue that to solve them, we need to transition away from corporate ownership and towards economic democracy. 

Democratic models of enterprises and organizations exist within the paradigm of the Social and Solidarity Economy (SSE). Such organizations are designed to produce goods, services, and knowledge while pursuing both economic and social aims and fostering social solidarity. 

In a time of rising inequalities, environmental degradation, and economic turbulence, the social economy provides civil society with the means to fulfill the needs of communities. 

We must move away from the doctrine of shareholder primacy, which is inherently undemocratic, and move towards a model which produces wealth for society as a whole. Part of the solution to democratize wealth will come by re-localizing economies and moving towards community ownership, as illustrated in the award-winning documentary “Tomorrow”. Potential initiatives include redirecting savings back into the municipality through community banks, community-owned renewable energy, and more. 

The good news is that worker-owned companies fare better than conventional businesses. As explained by Toronto-based Social Capital Partners, putting more shares into employees’ hands can: 

• Help workers build long-term wealth;
• Avoid the risks of new, inexperienced leadership after the founders or owners sell the company; and
• Bypass private-equity investors who purchase companies in transition, prioritizing  fast paybacks through mergers, layoffs and asset sales rather than stewarding long-term  growth.

In the U.S., where legislation encourages companies to borrow money to transfer shares at no cost to their employees over time, research indicates worker-owned firms grow faster, achieve higher profits and pay employees more. The U.S. now has about 6,400 employee-owned companies, with 14 million employees sharing US$1.4 trillion in wealth. By contrast, Canada has only a handful of such companies as Canadian employee-stock-ownership plans (ESOPs) are mainly designed to sell shares to an elite group of affluent executives. Pension funds can be a key actor in the transition to greater economic democracy. 

The SSE could also be a solution to the growing share of retiring entrepreneurs who are looking to pass on their company to the next generation. Distributing that ownership to workers would dilute concentration of economic and political power, and help to create a movement towards greater economic democracy.

Questions to self-assess your knowledge:

• Have you been taught how to apply democratic principles to other sectors besides government?
• Have you thought about launching or joining an SSE organization instead of a start-up or traditional corporation?
• Are you willing to fully embrace more democratic models of governance, shared distribution of power, and collective imagination in the workforce?
• Is your school’s career centre inviting SSE organizations to career fairs?

Analysis by the Canada Revenue Agency of 2014 corporate taxes suggested that Canadian corporations avoid paying between C$9.4 and C$11.4 billion in tax each year, which is almost 30% of the total corporate tax bill. These calculations only relate to legal tax avoidance, and exclude illegal tax evasions and grey-area strategies that deprive the public of billions in revenue.

In the 1950s, people and corporations contributed equal amounts of income tax to the Canadian government. Since then, the scales have tipped in the corporations’ favour. Corporate taxes have been slashed and people have been forced to make up the difference. In 2015-2016, Canadians paid C$145 billion in income tax, while corporations paid C$41 billion.

The financial sector accounts for more than two-thirds of this tax avoidance. According to Statistics Canada, pre-tax profits in the banking sector as a whole soared by 60% from 2010-2015. During that period, the sector’s tax rate has dropped by almost the same amount. Consequently, Canada’s big banks have the lowest tax rate in the G7.

The Canadian Bankers Association (CBA) has long argued any tax changes which impact bank profits could hurt average Canadians because of their effect on pensions and mutual funds. However, a report by Corporate Knights and The Star shows that more than 80% of Canadian stocks are owned by foreigners and the wealthiest 20% households in the country.

Another historic argument against higher corporate taxes is that they would hurt investment by businesses. But Statistics Canada numbers show that drastic cuts to the corporate income tax rate over the last 20 years have not stimulated new investment. Between 1997 to 2016, Canada’s corporate income tax rate was cut almost in half, from 43%to 26.7%, and yet investment in machinery and intellectual property is still below the 1997 level as a percentage of GDP. Instead, we have seen a massive uptick in activities that are hard to classify as “productive” or contributing to the real economy, such as share buybacks, large increases in executive compensation, and a huge increase in merger activity.

These activities have caused income and wealth to boom for a tiny fraction of the population, while actively harming the rest of the country. As demonstrated in the same report by Corporate Knights and The Star, consequences of lower corporate taxes include a 40% cut in hospital beds between 1952 and 2018, social housing units being cut by the thousands or with multi-billion dollar repair bills due to a lack of maintenance, and underinvestment in public infrastructure such as transit.

While better fiscal policies need to be enacted at the federal level, we also need to have more discussions about reforming the international tax system, which currently permits a “race to the bottom” (i.e. tax competition between countries) as shown during the World Tax Summit hosted in 2020 by TaxCOOP. 

When it comes to corporate sustainability, research shows that companies with higher CSR ranking pay less taxes on average globally. This evidence suggests that managers or other influential stakeholders of socially responsible firms do not necessarily view the payment of corporate taxes as complementary to CSR activities.

In parallel, we must stop seeing governments as inefficient bureaucracies which can only regulate, fix market failures, or be a lender of last resort. We must reimagine governments as creative agents that can play a crucial role as investors, risk-takers, and innovators.

CSR and “stakeholder capitalism” are not going to solve income inequality, because most of that inequality originates from a shift in power from the public to the private sector. In order to solve economic inequality, we need to reinvest in the public sphere, and build a more progressive tax system. This is especially important when considering that many billionaires and corporations give charitably instead of paying their fair share of the tax burden.

The COVID-19 crisis demonstrates the urgent need for greater solidarity, as opposed to just more charity. Between March 16^th and May 16^th 2020, Canada’s 5 richest billionaires and the 5 largest tech companies contributed less than 0.1% of their wealth to combat the impacts of the pandemic, despite growing their wealth by 9% and 7.7% respectively over the same period. 

Various social programs, such as a Canadian universal basic income, will help achieve a more equitable distribution of wealth. A 2-year basic income pilot in Finland was shown to increase employment and human well-being. A more progressive tax system will also enable the public investments that are necessary to build a low-carbon society.

The good news is that some of Canada’s richest millennials want to pay more taxes. 

Questions to self-assess your knowledge:

• What are the real costs of low corporate taxes?
• What are myths about the benefit of low taxes?
• What is the role of governments as investors, risk-takers and innovators?
• How can philanthropy benefit the super-rich? 
• Are you being taught about the need for a fairer Canadian taxation system, with a wealth and inheritance tax and a more progressive corporate tax system?
• If you are planning to work for an accounting firm, are you being taught about ethical accounting practices that prevent complex tax avoidance schemes?
  

Companies with higher Environmental, Social & Governance (ESG) scores withstood the COVID-19 market impacts better than others. Canadian institutional investors universally agree that the movement towards ESG action and disclosure will continue to gain momentum. 

Unfortunately, a lot of ESG integration does not truly mitigate certain climate and social risks, making many ESG rankings guilty of greenwashing. For instance, most low-carbon funds don’t consider companies’ Scope 3 of greenhouse gas emissions, which account for up to 75% of a company’s total emissions. ESG also has serious limitations when it comes to reducing social inequalities.

To counter the greenwashing trend, the Canadian government recently established an Expert Panel on Sustainable Finance whose final recommendations included increased regulations on the ESG space. Additionally, since COVID-19 hit financial markets, the government has made it mandatory for large businesses that apply for certain government loans to publish Annual Climate Disclosure Reports. These disclosures are aligned with the recommendations of the Task Force on Climate-related Financial Disclosure (TCFD), a body established in 2015 by G20 Finance Ministers and Central Bank Governors including Mark Carney, then Governor of the Bank of England. TCFD is concerned with the financial stability of our economies following the potential mispricing of assets and misallocation of capital due to a lack of climate-risk mitigation. In general, companies are increasingly applying TCFD’s recommendations by following the reporting framework built by the Sustainability Accounting Standards Board (SASB). 

Many current pledges of carbon neutrality by 2050 present serious limitations; carbon-offsets are not as effectively as frequently believed, and pledged reductions don’t include Scope 3 of emissions which account for the large majority of most  firms’ emissions. There are many other myths and misleading assumptions about net zero targets that we need to understand before evaluating corporate commitments. One framework to counter greenwashing is the Science-based Targets Initiative that has advanced an evaluation process that is specific to  each major industry.

While these reporting guidelines will soon become the norm for large companies, the workforce is not yet trained to understand, implement and act upon these reporting guidelines. In this respect, our schools have a crucial role to play. 

We must also move beyond the disclosure of only climate-related risks and negative environmental or social impacts to start measuring a company’s positive contribution to sustainability challenges. To do so, vital frameworks include the Impact Management Project, IRIS+ from the Global Impact Investing Network, and the UN SDGs, which together allow companies to more accurately measure their positive and negative impacts. 

We must also start paying attention to the European Union’s work on Sustainable Finance Regulation, as they are set to become the world’s regulatory leaders when it comes to combating ESG greenwashing. In Canada, Corporate Knights has developed an open source Clean Revenue Taxonomy 2.0, to determine what should and should not be considered ‘green’. It is informed by best practices from the Climate Bonds Taxonomy, EU Sustainable Taxonomy, China Green Bond Endorsed Project Catalogue, and many more sources.

When it comes to equity, pricing in climate risk could be a risk of its own. When investors confront risk, they either decline to make an investment or demand a higher return as compensation. Areas with greater exposure to climate-related damages would be charged more when trying to get financing. As climate change disproportionately affects poorer countries and low-income communities, which are often composed of Black, Indigenous and People of Colour, pricing climate risk is likely to intensify inequality and leave affected areas without support. In the absence of control measures, pricing in physical climate risks could result in an asymmetric cost of capital. Fortunately, there are smart policy measures that can ensure equal access to insurance and adaptation finance. Investors, insurers, and accountants have a responsibility to push the conversation on these policies. 

Finally, while it is crucial to better understand the financial risks of climate change, operational planning tools like risk prevention on their own won’t be able to convince skeptics. We also need to learn that we shouldn’t always need a “business case” to do the right thing.

Questions to self-assess your knowledge:

• How can you implement the recommendations from the Task Force on Climate-Related Financial Disclosures to avoid the mispricing of assets and misallocation of capital due to a lack of climate-risk mitigation? 
• How can you use the Impact Management Project to avoid greenwashing and assess a company’s true positive impacts? 
• Do you know what a corporate sustainability report should include, in order to avoid greenwashing?
• How do you convince skeptics to act upon important social and environmental issues without relying solely on a business case?

Short-termism within organizations reduces innovation and long-term growth within the economy. According to a study by Morgan Stanley, 80% of managers said that they would consciously prioritize short-term value metrics at the expense of long-term shareholder value. 

Companies are increasingly motivated to spend money on short-term quick wins which often don’t contribute to the real economy, such as share buybacks or dividends. They do so at the expense of long-term investments in breakthrough innovation, or projects designed to reduce their exposure to sustainability-related risk. When short-termism is at its worst, it can even stimulate unsound or even criminal corporate behaviour.

One potential solution is to encourage the development of long-term accounting performance measures, while ending the requirement for quarterly earnings reports. Today’s most innovative companies, such as Google, already refuse to issue quarterly earnings guidance. Businesses must also be willing to achieve lower short-term returns in order to gain long-term resilience and prosperity.

By slowing down corporate culture and shifting to long-termism, we can also increase employee productivity. Many European countries already allow their citizens to spend more time on community involvement, personal relationships, personal well-being, and other pursuits outside of work. France has the same productivity rate as Canada, yet its workforce has better mental health and more leisure time.

Constantly striving to increase productivity is not good for society. As the time of the working day continues to expand, modern work has become psychologically destructive, raising both burnouts and feelings of alienation. We must be able to question this dogma of greater productivity in order to reinvent work and put human beings back at the center of society.

In terms of long-term practices for well-being, it is crucial for schools to connect inner and outer well-being in social and sustainable innovation education to show that big world issues can be solved while taking better care of ourselves. The WISE Network, who works with over 100 universities across the world, developed five leading principles to fill this gap.

Questions to self-assess your knowledge:

• How does short-termism affect corporate decision-making?
• How can corporations move towards more long-term notions of value?
• How much time do you have outside your work to contribute to your community?
  

Clean or green economic growth would require a decoupling of economic growth from all critical environmental impacts on a global scale. Although technology and human ingenuity will help us become more resource-efficient, it won’t allow us to curb emissions to avoid the worst case climate scenarios. Indeed, these technological improvements often come with unintended consequences, such as rebound effects (i.e. savings from energy efficiency that cause increases in other carbon-intensive behaviours); problem-shifting technologies (i.e. solutions to certain problems that create new environmental issues); or cost-shifting schemes (i.e. the externalisation of environmental impacts from high-consumption to low-consumption countries), among others. We also cannot rely on complex geoengineering experiments in the hopes that they might delay the need for a full sustainability transition, which might risk damaging the biosphere even further.

A recent literature review published by the European Environmental Bureau (EEB) found no evidence that an absolute decoupling of economic growth from resource use is occurring or is likely to occur. As long as our Gross Domestic Product (GDP) continues to grow, CO₂ emissions will rise and the environment will continue to deteriorate. In other words, being in favour of infinite economic growth is usually based on ideology rather than science. Although imagining a post-growth world is hard to accept due to its complex implications, we must be able to do what is necessary to achieve a sustainable society, rather than just what is politically acceptable.

Economists have long assumed that constant growth is necessary to improve people’s lives. However, beyond a certain level of development, the relationship between GDP and human well-being breaks down. Building a more just society, and limiting global warming to 1.5°C, requires redistributing the resources we already have more equally, rather than continuing to grow the entire economic pie. 

Instead of asking whether we need to grow or degrow, we should be asking “what needs to grow and what doesn't?" The term ‘agrowth’ is preferable to the term ‘degrowth’ because it signals a loss of faith in perpetual economic growth. Agrowth reconsiders what we value as a society by redefining what GDP classifies as “wealth”. Sectors that bring value to society without excessively harming the planet (e.g., education, healthcare, relationships, renewable energy to some extent) must grow, while sectors that cause harm need to degrow.

Agrowth is the only way to achieve a fairer economy that remains within the carrying capacities of the Earth’s biosphere. Fortunately, there are concrete frameworks that allow us to envision a post-growth society. Alternative economic models like Kate Raworth’s “Doughnut Economics” remind us that “a healthy economy should be designed to thrive, not grow.” The principles of “Regenerative Capitalism” apply the behaviours of natural systems (i.e. nature’s ability to self-organize, renew, and regenerate) to socioeconomic systems. These regenerative principles can be applied across all industries. For instance, the Regenerative Finance framework offers a realistic reform plan for the financial system as advanced by John Fullerton, a former Managing Director at JP Morgan.

Entire businesses and communities have been embracing these alternative models for many years, and with the post-COVID recovery even large cities like Amsterdam have started using them. 

Business education must also include case studies that showcase the resilience of Indigenous communities whose centuries-old traditions already apply regenerative principles to build prosperity without infinite growth. This will not only make us better world citizens, but also better business thinkers.

Questions to self-assess your knowledge:

• Is skepticism about agrowth based on science, or is it guided by ideological assumptions? 
• What are you being taught about the limitations of infinite economic growth and alternative measures that question the meaning of economic value?
• What are the qualities of a regenerative economy?
• Are you studying case studies of organizations that have embraced a different growth model? 
• How can we achieve the Sustainable Development Goals while staying within Planetary Boundaries?