Sustainability management is a big success
As early as 2009, I was looking for ways to combine my interest in environmental policy with my interest in effective organizational management. I always think that these two fields are separate, but the more I study the field of organization and management in the 21st century, the more I find that environmental issues have become the core of the field of management. This led to my 2010 book, Sustainability Management, And the development of the Master of Science in Sustainable Management in Colombia. When we designed the curriculum, we developed a management research field that we require all students to participate in, which we call: “The Physical Dimensions of Sustainability Management”. This includes: energy efficiency, renewable energy, waste management, climate science, environmental science, ecology, toxicology, hydrology, green buildings, and in addition to typical management topics, managers also need to understand the physical or scientific components Other topics such as finance, organizational management, strategy, marketing, quantitative analysis, financial and performance management, and human resource management.
In the more than ten years since then, we have expanded the field to include diversity, equity, inclusion, and access issues, and added reports on forests, public spaces, circular economy, corporate sustainability, sustainable fashion, and various new issues. Course. And fascinating topics. The area that receives the most attention is sustainable finance developed and led by my colleague Professor Satyajit Bose. We have created a series of courses in this field, including green accounting, energy finance, climate finance and sustainable development, clean energy economic financing, energy markets and innovation, sustainable investment and economic growth, and impact finance. New courses are being developed every semester, and sustainable finance is very attractive to many of our students.
Last week, my colleague, Professor of Environmental Law, Michael Gerrard, reminded me of some new developments in the field of green finance.He sent me a link Bloomberg Little by little William Patrick George Lucci with Alastair Swamp The report says “Private equity drives top ESG employees into the 7-figure salary league.” According to these reporters:
“Private equity firms and hedge funds are significantly increasing the amount they are willing to pay sustainable finance experts because an area that was once at the low end of the salary level is moving towards the top. According to headhunters, more and more ESG experts are now We are in a completely different income class from a few years ago. That’s because the environmental, social and governance asset market exceeds $35 trillion.”
This happened because the capital market finally found that companies were not immune to environmental risks. Climate-induced drought and extreme weather can disrupt operations. Toxic substances and invasive species can damage ecosystems. When infectious viruses are involved, they can disrupt the supply chain, and the supply chain is not as long as we think, so they may cause the economy to stagnate. Some wealthy people and public pension funds insist on “green” investments. We also learned that just as companies need to focus on financial and reputational risks, they must also understand and manage their environmental risks. Companies’ attention to reputational risks has expanded to areas such as diversification, fairness, and worker treatment. The performance of companies in these areas has increasingly become the object of consumer questioning and consumer choice. Corporate governance has always been a bastion of white male rule in the United States, and is now regulated by the government and the securities market. California and other states require diversity in the board of directors of companies within their jurisdiction. All of these require management to pay more attention to environmental impact, social impact and corporate governance issues.
The mainstreaming of ESG is similar to the growth in financial disclosure and accounting when the United States Securities and Exchange Commission (SEC) was established, and attempts to make financial risks more transparent during the economic recovery after the Great Depression in the 1930s. In the 1920s, stock market risk was like a crooked casino. Roosevelt and Kennedy’s father Joseph Kennedy (the first chairman of the US Securities and Exchange Commission) changed this and established the modern stock market. During this period, accounting began to climb toward professional status. I believe that sustainability management is now undergoing a similar evolution.
For some observers, this trend became apparent at COP26, the regular trade show of the climate industry, which seemed to be dominated by the company.according to New York Times Opinion writer Christopher Caldwell:
“The large annual UN debate forum on climate change ended in Glasgow this month, leaving many participants confused. The rich have already taken over the matter. As the event claimed, COP26 is not like its previous sessions. , More like the second “Davos”-the January meeting of the World Economic Forum, where global economic giants and regulators met to plan our economic future. Dozens of private jets arrived at COP26, allowing investors and Fossil fuel lobbyists are in an awkward position. Finance writer Gillian Tett pointed out that since 2015, the “tribe” of COP attendees has changed from one of “environment ministers, scientists, and activists” to “ One of business leaders, financiers and currency officials”. This is bound to make the strategy and goals of the movement less democratic…”
Maybe, but I didn’t see much democracy in global diplomacy at the beginning. Diplomats from democracies negotiate with diplomats from authoritarian countries, and diplomats from developed countries negotiate with diplomats from developing countries. The self-interest of the country dominates these discussions. Without consulting the public, the connections from non-elected diplomats to elected officials to the general public are trivial at best. After 26 of these meetings, people’s awareness has improved and climate change is slowly easing, but the speed is too slow for anyone to believe that the status quo is working. We knew the problem and even came up with a solution. We need to transition from an economy based on fossil fuels to an economy based on renewable energy. The transition will cost a lot of money, and a lot of money will be generated and lost in the process. This seems to have attracted a lot of attention from people who previously ignored environmental sustainability. It is difficult for me to regard it as a bad development. Caldwell rightly fears that these economically selfish people will enter a stage dominated by mission-driven advocates and relatively ineffective bureaucrats who hate conflict.As Caldwell in his era piece:
“In Glasgow, some self-nominated representatives from a very wealthy industry claim to play a special role in shaping the future of mankind. In doing so, they opened a rift. Climate activists are skeptical, pointing to many alliances Members continue to participate in funding oil exploration. On the other hand, the bankers of the coalition seem to believe that society is ready to follow in their footsteps. It should be judged by voters, not bankers.”
It would be great if there were some places for voters to express themselves. Again, I don’t see much democracy in global diplomacy. I see sustainability and climate policy as an arena for competitive elites. So far, the responsible government leaders have made some progress, but the forces that control fossil fuel companies have taken the lead. They have “played a special role in shaping the future of mankind.” This is nothing new. What’s new is that some of them have discovered that their wealth will not be worth mentioning on a planet degraded by environmental destruction. They discovered the reality of environmental risks. I think this is called enlightened egoism.
Yes, self-interest is now at play in this field that was once a mission-driven advocate of environmental sustainability. But this is my view of this development, and I admit that it is based on being rejected by the mainstream for decades. My interest in environmental policy began in the fall of 1975, when I was studying at the State University of New York/Buffalo for a postgraduate course on environmental policy and politics by Professor Lester Milbrath. At that time, environmental protection was a marginal issue, far from the mainstream of policy and governance. In 1977, I started working at the EPA to staff a working group for the public to participate in the new water pollution plan in the United States. EPA was established seven years ago. Five years ago, Congress passed the 1972 Water Act, overturning Richard Nixon’s veto. In 1980, I participated in the Superfund toxic waste cleanup project, and in 1985 I participated in the project to eliminate leaks in underground storage tanks. In 1987, I started to focus on environmental policy at the Columbia Institute of International and Public Affairs. In 2002, we launched the MPA for environmental science and policy projects in Colombia. In the years before Barack Obama became president, the environment was a small and unimportant part of the political scene. We sit at the child’s table. But then President Obama began to discuss climate change issues with global leaders. When we opened the Master of Sustainable Management in 2010, I could feel the growth momentum behind environmental sustainability and sustainable management.
These seven-figure ESG work and COP26 corporate leaders mean that sustainable development management has made significant progress. Yes, this development is dangerous, but there are also opportunities. The scale of change required to build an economy based on renewable resources is enormous. We need capital and organizational capabilities to achieve this change. We also need public policy and public investment. The Biden administration understands this, and the President’s Infrastructure Act and the “Rebuild Better” Act provide the public leadership we need. We need elected leaders and business leaders to complete this work. We are in a new and more terrifying world, but its arrival is too timely.
