Socially responsible investing sector has, over the past few years, witnessed rapid growth with most Business schools including it as part of MBA program.
Cornell University’s Johnson School offers a Sustainable Global Enterprise (SGE) immersion that allows students to work on multidisciplinary teams on company sponsored projects that challenge them to solve real problems faced by companies.
They are expected to provide practical, operational solutions that require competency in all management areas, including economics, finance, marketing, accounting and operations. Project sponsors range from multinational corporations to non-governmental organisations to startups.
At Berkeley Haas, the Centre for Social Sector Leadership prepares students for social entrepreneurship and social impact, non-profit consulting, Board governance and leadership, strategic management of non-profit entreprises and financial management.
Meanwhile, the Skoll Centre for Social Entrepreneurship at Oxford Said Business school aims to champion new market systems based on entrepreneurship in the public interest, disruptive innovations embracing new technologies, new business models, new laws and regulations.
How do these programs translate in real life? According to Thomas Bishop, MBA student at Johnson, he got an opportunity to intern with Calvert Investments, a socially responsible investment firm.
As a sustainability research intern, he wrote research briefs on a variety of pressing issues in corporate social responsibility and their impact on investment decisions.
The industry has evolved from the avoidance of “sin stocks,” such as alcohol or firearms companies, to a more complex methodology of rating companies on environmental, social, and governance (ESG) factors, and excluded poorly rated companies from investment funds, he says.
Socially responsible investing has resulted in social movements such as divestment from South African companies to pressure an end to apartheid policies, and more recently, divestment from fossil fuels to combat climate change.
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He found that Calvert has a comprehensive rating system based on ESG factors specifically relevant to each industry and company it analyzes. For example, human rights issues in supply chains would be critical to an electronics company using earth minerals in its products, while appropriate governance structures and compensation practices are essential to the banking industry.
These factors not only promote social impact, but are crucial to a financially sound business. In this sense, socially responsible investing can also be seen as an effective way to manage risk in an investment portfolio, rather than purely for altruistic purposes, he says.
