By:
Prof. dr. Rob van Tulder, professor of International Business-Society Management at Rotterdam School of Management, Erasmus University; and
Michael Putra, PhD candidate at Rotterdam School of Management, Erasmus University
No organization nor individual would be happy if five years of hard work is wiped out in an instant. Yet, this is exactly the case with the most recent global Human Development Index (HDI), published by the United Nations Development Programme last month. The world’s steady progress over the past five years seems to have been reversed as this is the first time we see a decline in global HDI since 1990. Indonesia is not escaping this global trend, with its HDI in 2021 being lower than it was in 2018.
Indeed, the United Nations (UN) Secretary General’s remarks at the opening of the UN General Assembly general debate in New York were blunt. António Guterres went as far as claiming that the world is “gridlocked in colossal global dysfunction” where the international community is failing to tackle the major global challenges. Cascading crises put the Sustainable Development Goals (SDGs) and the related trust in the benefits of globalization at risk. Nevertheless, a doom-and-gloom approach albeit it understandable and based on compelling evidence, has been found not particularly helpful in leveraging concerted and effective action on complex systemic issues. The frustratingly slow progress in the climate action can be partly explained by what the Norwegian climate scholar Per Espen Stoknes calls “apocalypse fatigue”. The problems are too big or they take away incentive for concrete actions. Psychologists talk about “choice paralysis”, where individuals have to deal with pervasive, but often “slow moving”, systemic crises that confronts them with an abundance of choices and complex trade-offs. Putting the responsibility to make responsible choices to individual citizens and consumers has therefore leveraged relatively weak action and poor progress.
These stark reminders should drive actions to put SDGs back on track. The challenge is making them actionable preferably at the level of individual (private) organizations and how to define the present crisis also as an opportunity for concrete action by companies (in the right direction). Ban Ki-moon, who oversaw the historic adoption of SDGs in 2015, has always been vocal about the crucial role of the private sector. A recent UN estimate indicates that there is about $4.3 trillion yearly gap in SDG financing, which means the investment ecosystems are failing to enable SDG-related investments at scale and/or corporate boards are not making investment decisions at sync with the SDG ambitions. Captains of industry like former CEO Paul Polman and business platforms like the World Business Council for Sustainable Development reiterate the importance of the SDG agenda as the world’s best long-term business plan. Containing an estimated $12 trillion annual investment opportunities, it (still) can be considered to “unlock to what is the growth story of our century, putting people and the planet first.”
An increasing number of business leaders are indeed interested in a fundamental rethinking on the way they “do business”. This refers to the root causes of the present cascade of crises that partly reside in fragility of supply chains and exploitative business models. As former CEO of DSM, Feike Sijbesma, stated “In a system that fails, I cannot do business”. However, the volumes of tools and indices around Environmental, Social, and Governance standards or “ESG” have exploded in such a way that it is understandable for busy corporate leaders to struggle to distinguish between substance and noise. Research on the way ESG criteria is implemented shows major flaws in the methods in the way rating agencies use the metrics and how companies “cherry pick” only those criteria that they consider easy to achieve.
An assignment for business schools
Business challenges of the past are not good yardsticks to navigate growing volatility of the future and to align business deliverables with SDGs. To address this, business schools need to equip their students (regulars and executives alike) with (i) the intellectual capacity to understand the complex challenges, dilemmas, trade-offs, but also major opportunities in the broader business environment; (ii) the moral compass in guiding their future decisions; and (iii) the skillsets to deliver the required (business) outcomes.
The approach in business education cannot be sterile within the academic bubble, rather it needs to allow continuous interactions with practitioners, civil societies, and policy-makers. For example, there is a growing number of business schools that are members of the Principles for Responsible Management Education (PRME) network. Founded in 2007, as an initiative of UN Global Compact, it organizes more than 800 signatories worldwide, which makes it the largest organized relationship between the UN and management-related higher education institutions. But like all companies that subscribe to the SDGs, the PRME network also faces an “intention-realization” gap that relate to the intellectual and practical actionability of the SDG framework. Research on the practice of education on the SDGs amongst business shows that there is still a lot work to be done to fill the gap between intention and realization. And the world is already mid-way in the Decade of Action, so stepping-up the pace is a must.
One attempt in doing so is through a Principles of Sustainable Business curriculum that is being launched this year that offer frameworks for Corporate Action on the SDGs (https://www.principlesofsustainablebusiness.nl/). These frameworks are also relevant beyond business schools, as SDGs require collaborative thinking across disciplines from engineering to medicine, from banking to agriculture, and so forth.
Moreover, it is extremely important to acknowledge the contributions of businesses and business schools in emerging countries. By sheer numbers alone, graduates of business schools in China, India, Indonesia, Brazil, and others will affect countless business entities. As population and economic growth shift more towards emerging economies, there will be on-the-ground challenges faced by business leaders there that today’s Ivy League curriculum may struggle to fathom.
In one of his classic works published in 1993, “Post-Capitalist Society”, Peter Drucker emphasized that the basic economic resource is no longer capital, natural resources, nor labor – but it is knowledge. Business schools, and universities, should humbly take-up that mantle by equipping their students with the right knowledge for a sustainable / resilient economy and foster genuine collaboration across the societal spheres.
This article was published in the Jakarta Post on 12 October 2022: https://www.thejakartapost.com/opinion/2022/10/11/sdgs-in-business-school-curricula-to-address-colossal-global-dysfunction.html
Sustainable Development Goals in business school curricula to help address “colossal global dysfunction”
By:
Prof. dr. Rob van Tulder, professor of International Business-Society Management at Rotterdam School of Management, Erasmus University; and
Michael Putra, PhD candidate at Rotterdam School of Management, Erasmus University
No organization nor individual would be happy if five years of hard work is wiped out in an instant. Yet, this is exactly the case with the most recent global Human Development Index (HDI), published by the United Nations Development Programme last month. The world’s steady progress over the past five years seems to have been reversed as this is the first time we see a decline in global HDI since 1990. Indonesia is not escaping this global trend, with its HDI in 2021 being lower than it was in 2018.
Indeed, the United Nations (UN) Secretary General’s remarks at the opening of the UN General Assembly general debate in New York were blunt. António Guterres went as far as claiming that the world is “gridlocked in colossal global dysfunction” where the international community is failing to tackle the major global challenges. Cascading crises put the Sustainable Development Goals (SDGs) and the related trust in the benefits of globalization at risk. Nevertheless, a doom-and-gloom approach albeit it understandable and based on compelling evidence, has been found not particularly helpful in leveraging concerted and effective action on complex systemic issues. The frustratingly slow progress in the climate action can be partly explained by what the Norwegian climate scholar Per Espen Stoknes calls “apocalypse fatigue”. The problems are too big or they take away incentive for concrete actions. Psychologists talk about “choice paralysis”, where individuals have to deal with pervasive, but often “slow moving”, systemic crises that confronts them with an abundance of choices and complex trade-offs. Putting the responsibility to make responsible choices to individual citizens and consumers has therefore leveraged relatively weak action and poor progress.
These stark reminders should drive actions to put SDGs back on track. The challenge is making them actionable preferably at the level of individual (private) organizations and how to define the present crisis also as an opportunity for concrete action by companies (in the right direction). Ban Ki-moon, who oversaw the historic adoption of SDGs in 2015, has always been vocal about the crucial role of the private sector. A recent UN estimate indicates that there is about $4.3 trillion yearly gap in SDG financing, which means the investment ecosystems are failing to enable SDG-related investments at scale and/or corporate boards are not making investment decisions at sync with the SDG ambitions. Captains of industry like former CEO Paul Polman and business platforms like the World Business Council for Sustainable Development reiterate the importance of the SDG agenda as the world’s best long-term business plan. Containing an estimated $12 trillion annual investment opportunities, it (still) can be considered to “unlock to what is the growth story of our century, putting people and the planet first.”
An increasing number of business leaders are indeed interested in a fundamental rethinking on the way they “do business”. This refers to the root causes of the present cascade of crises that partly reside in fragility of supply chains and exploitative business models. As former CEO of DSM, Feike Sijbesma, stated “In a system that fails, I cannot do business”. However, the volumes of tools and indices around Environmental, Social, and Governance standards or “ESG” have exploded in such a way that it is understandable for busy corporate leaders to struggle to distinguish between substance and noise. Research on the way ESG criteria is implemented shows major flaws in the methods in the way rating agencies use the metrics and how companies “cherry pick” only those criteria that they consider easy to achieve.
An assignment for business schools
Business challenges of the past are not good yardsticks to navigate growing volatility of the future and to align business deliverables with SDGs. To address this, business schools need to equip their students (regulars and executives alike) with (i) the intellectual capacity to understand the complex challenges, dilemmas, trade-offs, but also major opportunities in the broader business environment; (ii) the moral compass in guiding their future decisions; and (iii) the skillsets to deliver the required (business) outcomes.
The approach in business education cannot be sterile within the academic bubble, rather it needs to allow continuous interactions with practitioners, civil societies, and policy-makers. For example, there is a growing number of business schools that are members of the Principles for Responsible Management Education (PRME) network. Founded in 2007, as an initiative of UN Global Compact, it organizes more than 800 signatories worldwide, which makes it the largest organized relationship between the UN and management-related higher education institutions. But like all companies that subscribe to the SDGs, the PRME network also faces an “intention-realization” gap that relate to the intellectual and practical actionability of the SDG framework. Research on the practice of education on the SDGs amongst business shows that there is still a lot work to be done to fill the gap between intention and realization. And the world is already mid-way in the Decade of Action, so stepping-up the pace is a must.
One attempt in doing so is through a Principles of Sustainable Business curriculum that is being launched this year that offer frameworks for Corporate Action on the SDGs (https://www.principlesofsustainablebusiness.nl/). These frameworks are also relevant beyond business schools, as SDGs require collaborative thinking across disciplines from engineering to medicine, from banking to agriculture, and so forth.
Moreover, it is extremely important to acknowledge the contributions of businesses and business schools in emerging countries. By sheer numbers alone, graduates of business schools in China, India, Indonesia, Brazil, and others will affect countless business entities. As population and economic growth shift more towards emerging economies, there will be on-the-ground challenges faced by business leaders there that today’s Ivy League curriculum may struggle to fathom.
In one of his classic works published in 1993, “Post-Capitalist Society”, Peter Drucker emphasized that the basic economic resource is no longer capital, natural resources, nor labor – but it is knowledge. Business schools, and universities, should humbly take-up that mantle by equipping their students with the right knowledge for a sustainable / resilient economy and foster genuine collaboration across the societal spheres.
This article was published in the Jakarta Post on 12 October 2022: https://www.thejakartapost.com/opinion/2022/10/11/sdgs-in-business-school-curricula-to-address-colossal-global-dysfunction.html