Creating a niche for the environment in the business school curriculum - Business and the Environment - Editorial

Business Horizons, March-April, 1992 by A. James Barnes, Janice K. Ferry

America's business schools proclaim themselves to be the educators of tomorrow's business people. One would assume, then, that their curriculum and programs would be geared toward preparing students for the problems and challenges they will face in the future. However, in the case of the environment, the record shows that the majority of business and management schools have not yet recognized the extent to which environmental issues significantly affect businesses. In fact, like a modern Rip Van Winkle, business schools appear to be emergin from a 20-year sleep during which they failed to take note of major changes occurring around the globe and the degree to which environmental issues affect the whole spectrum of business decision making.

The environmental considerations confronting business today are far broader than whether controls should be installed on manufacturing processes or energy production. Businesses must now also be concerned with the nature of products and packaging, how they can be promoted, the kinds of resources that can be used, where facilities can be placed, and strong public attitudes concerning the environment. This reality is capsulized on the cover of Dow Chemical's 1989 annual report, which states that the environment, "more than any other [issue], will affect Dow's prospects--in the '90s and beyond." Business schools face the need not only to catch up, but also to try and position themselves on the cutting edge.

In this article, we will examine why and how environmental issues should be addressed in the business school curriculum. Initially, we will briefly review the recent history of business and the environment in the United States and examine what is happening in the business and academic worlds. Then we will discuss a number of current efforts to incorporate environmental considerations into the business school curriculum. And finally, we will offer some suggestions of our own.

A BRIEF HISTORY OF BUSINESS

AND THE ENVIRONMENT

The 1970s, the decade of the environment in the United States, witnessed a significant increase in public concern about the environment and a proliferation of major environmental law making. In response to the Clean Air Act of 1970 and the Federal Water Pollution Control Act of 1972, American businesses had to deal with myriad new regulations that largely focused on what was coming out of smokestacks and discharge pipes. Companies responded by installing "end-of-pipe" controls and establishing environmental management positions--generally at the plant level--to coordinate their efforts to comply with the new regulations.

Overall, business-government interactions concerning environmental matters could best be described as confrontational; businesses typically opposed the imposition of environmental controls because of the expense involved and sought whenever possible to delay their installation. The conflicts of the 1970s often revolved around such sweeping philosophical arguments as protecting the environment at any cost versus spending too much on controls that might eliminate jobs or that were not "cost-effective." The arguments were often short on scientific, technical, and economic facts to support them.

This attitude changed in the 1980s. Compliance with environmental regulations became more accepted, and the business community generally adopted a more positive, proactive role in seeking to influence the course of new laws and regulations. Scores of technicians in the executive branch, Congress, industry, and environmental groups assumed major roles in shaping new legislation and regulations. Many corporations created senior-level staff positions to monitor compliance with environmental regulations and direct company environmental programs.

Around this time, some farsighted companies began asking themselves whether it made better business sense to take actions beyond what was required by current environmental laws. The Union Carbide accident at Bhopal and the oil spills and hazardous waste accidents of the 1980s contributed to this new outlook. Another factor inducing change was the enactment of the Community Right to Know Provisions of 1986. The provisions required significant producers of wastes to inform their communities of what was being released into the environment near the waste-generating facilities. Many companies intiated efforts to voluntarily reduce emissions below the legally mandated levels to reduce their burden of explanation.

As public concern and action over environmental problems have taken on a global dimension, the 1990s have been proclaimed the global decade of the environment. At the 1990 annual meeting of the World Economic Forum, "650 industry and government leaders ranked the environment as the No. 1 challenge facing business" (Smith et al. 1990). One can find businesses around the world that have installed a pollution-prevention attitude in their companies. The focus of the most enlightened companies is no longer directed toward simple "end-of-pipe" controls designed to meet existing limitations. Instead, the focus has shifted to minimizing the potential harmful impact that production, processing, consumption, and disposal will have on the environment and those living in it.