[Sponsored Article] When it comes to the development of green finance and green investments, individuals, businesses, and educators all play an important role. This is especially the case for business management schools, according to Professor Eric Cornuel, President of the European Foundation of Management Development (EFMD), a global non-profit accreditation body for business schools and corporate universities worldwide. “Business schools are directly responsible for future education leaders, managers, and entrepreneurs,” says Cornuel. “This segment of the population has an overwhelming responsibility for issues of social and environmental justice.” For this reason, he argues that business schools must take a clear stance on issues such as ethics, sustainability and responsibility, and raise their students’ awareness of the importance of ethical behavior, corporate responsibility, and a respect for sustainable development. Business schools can be role models Cornuel adds that business schools are now considering the relevance and impact of their research output on the sustainable development of societies, and in this way can serve as role models. “Measuring the extent to which business schools act as good citizens and integrate these societal issues into their curricula, research, and their internal management practices, is very important,” Cornuel says. There is strong evidence that the development of green finance and green investment is a natural response to a shifting economic paradigm in which doing business is no longer simply about maximizing shareholder returns. A growing sector of the population thinks that businesses should have a broader impact on a larger circle of stakeholders. The release of an updated “Statement on the Purpose of a Corporation” from the Business Roundtable, an association of CEOs of US leading companies, was signed by more than 180 CEOs. They are committed to leading their companies for the benefit of all stakeholders. Rising green investments They aren’t the only ones. The Global Sustainable Investment Alliance reported that at least US$30.7 trillion of funds is being held in sustainable or green investments, and this number continues to rise as governments implement stricter sustainability targets. At an inter-governmental level, there have been significant moves to integrate sustainability into financial policy frameworks to mobilize finance for sustainable growth. Policies include channelling private investment to a climate-neutral economy, providing companies with guidance on how to report the impact of their businesses on the climate, and the establishment of a standard classification system and taxonomy for sustainable activities. Universities, too, are taking a stand. For example, Cambridge University in the UK has established a £3.5 billion endowment fund to enable it to divest from fossil fuels over the next decade. The university aims to ensure that, by 2038, any company in which it invests will have net-zero greenhouse gas emissions. “When it comes to corporate social responsibility and green finance, it is critical to distil tangible actions and outcomes from a mere corporate communications strategy,” says Cornuel. Ensuring a positive ESG impact Environmental, social and governance (ESG) considerations are now often tied to Corporate Social Responsibility (CSR), which is a framework that gives businesses an opportunity to enact change at an operational level, as well as via their corporate strategy. “Green finance is one of the tools which enables funding groups to channel investments to assets which are aligned with a positive ESG impact,” Cornuel says. There are greater transparency, accountability and performance indicators for this space, given that there is no unified measurement system. Because of the shift in rhetoric, businesses need to take ESG considerations seriously as part of their corporate identity. “The current generation of students want to work in companies that combine profits with purpose,” Cornuel says. “Students want to be engaged in the work that the company does. They want to feel proud of the organization, project, or initiative they contribute to. This is a significant change.” Turning back to business schools, should they play a part in fostering students to become leaders who can help to build a greener future? Business schools around the world need to instil a sustainable mindset in their students, says Cornuel. This amounts to more than just having an elective CSR course, he argues. “Ethics, sustainability and responsibility need to be fully ingrained in the school’s culture, leadership, operations, programmes, and research,” he says. The role of EFMD EFMD plays an active role in ensuring this happens through its stringent Quality Improvement System. This strongly advocates that social and environmental imperatives that must accompany business practices today. To receive accreditation, institutions and businesses must comply with a whole host of quality benchmarks and improvement processes. With 954 institutional members, and 30,000 management development professionals in 92 countries worldwide, it is hoping to effect change through its networks and events, its accreditation and development, as well as its international projects. Cornuel advises business schools to heed the Globally Responsible Leadership initiative “Management Education for the World” which highlights the need for a multi-level transformation of education systems. At an individual level, business schools should develop responsible leadership, while at an organizational level, there needs to be a shift to service the common good rather than focusing exclusively on the bottom line. Lastly, on a systemic level, management education should engage in the pro-active transformation of economic systems to improve social and environmental well-being. “From a holistic approach to pedagogy, to immersive projects with local businesses and communities, there is an ample space for schools and institutions to use their distinctiveness and make a positive impact on their environment,” Cornuel says. “Business cannot succeed in a world that fails, and nor can business education,” he says. Promoting a Sustainable Future EFMD aims to contribute to the advancement of goals related to human rights, responsible management, ethics, corporate sustainability, inclusive economy, poverty alleviation, and the mitigation of climate change. Globally Responsible Leadership Initiative (GRLI) - In 2003, EFMD signed a partnership agreement with the United Nations Global Compact and launched the Global Responsibility Invitation, which later became the GRLI. It is a deeply engaged international community that is purposed to promote globally responsible leadership. Made up of a working partnership of global networks, companies, and learning institutions, its ultimate measure is how much of an impact it can make as a whole. EFMD Quality Improvement System (EQUIS) - An international accreditation system launched in 2013, EFMD became the first accreditation body to recognize responsible management issues in its accreditation standards. EFMD aims to be an active agent of change in the management development industry by placing issues of ethics, sustainability, and responsibility on the agenda. Business School Impact System (BSIS) - A joint venture between EFMD and FINEGE, BSIS uses a data-driven system to identify the tangible and intangible values that a business school brings to its local environment. Part six of the BSIS assessment criteria focuses on societal impact, assessing contributions to CSR, sustainable development, environmental management, and the fostering of diversity.