Young guns and venture capital on the same ESG page

She says leaders who can balance profits with the needs of the planet and people are needed.

“So, to stay competitive, and produce these kinds of leaders, executive education has to take this knowledge on board, and implement principles of ESG throughout their curriculum,” Roberts says.

The aspirations of AGSM students are changing, Roberts says. “This has led to different career outcomes than we may have seen five years ago.”

The AGSM has been weaving the principles of sustainability, ethics and inclusion through its portfolio of MBA programs.

Purpose-driven

“Our students are highly sought after in the job market, and we are seeing them seek out firms who are aligned to the principles of responsible management. Firms need to change to continue to attract top talent,” she says.

Luke Riboldi, program manager for superannuation and investment funds manager Australian Ethical Investments, is in the final stages of an MBA at the AGSM specialising in social impact, which he is on track to finish by May.

Australian Ethical has about $6 billion in funds under management and expanded its pool of funds under management by about $2 billion in the year to June 30 as investors and superannuants frustrated by slow progress on climate action by governments voted with their wallets.

Riboldi has a strong background in traditional finance, having worked at Westpac and Macquarie earlier in his career. He says he became increasingly interested in doing more on the ESG front.

“You kind of get to a point where you want to do something that is a bit more purpose-driven,” Riboldi says.

Now in 2021, ESG thinking is relatively ubiquitous, widely accepted and adopted.

— Charlie Hargroves, University of Adelaide academic

A few years ago ESG was “niche” in a way, but has now become central to corporate life, he says. “Whether it’s environmental or diversity or inclusion, all of these things have pushed it along,” he says.

Australian Ethical uses sophisticated methodology and framework to overlay both a positive screen and a negative screen on companies.

University of Adelaide academic Dr Charlie Hargroves says while decision-making on ESG principles has been a part of the corporate world for two decades, it has now shifted to be a central consideration.

“Now in 2021, ESG thinking is relatively ubiquitous, widely accepted and adopted; various reporting systems for finance and annual reports have already been well established to require and reward ESG outcomes,” he says.

Hargroves, the Adjunct Sustainable Development Fellow in the Entrepreneurship, Commercialisation and Innovation Centre (ECIC) at the University of Adelaide, says new graduates across many industries need a strong background in ESG considerations.

Intertwined into decision-making

”An understanding of ESG principles and practices is fast becoming a required attribute for new graduates in a number of fields who are entering into the workplace, and is well catered for within the current executive education space,” he says.

He says chief financial officers and their teams should already be well versed in ESG accounting and reporting methods.

ESG principles need to be intertwined into decision-making, to enable a broad platform to be built across companies.

“The important developments in education needed to underpin our future are now in the space of integrating innovative technologies across our cities and economies that drive economic, social and environmental outcomes simultaneously,” Hargroves says.

So how does Australia compare on the world stage?

Associate Professor Roberts says some overseas countries with a larger corporate sector might be slightly ahead in this area and university executive education is rapidly catching up.

“While countries with a larger sector may have a head start, here in Australia, we’re seeing an increased focus on sustainability that is in line with these global trends,” she says.

She says the AGSM embeds principles of responsible management across the entire full-time MBA curriculum, to prepare students to be more sustainable, ethical, and inclusive leaders.

Next year, she says the Responsible Management Curriculum will be rolled out to the executive (MBAE) and online MBA program (MBAX), along with PhD students.

“This shows our approach, continually assessing and adjusting to what industry wants in graduates, such as seeking those with ESG experience, is working,” she says.

What industry wants

“We know that industry has an increasingly urgent need for leaders who can build more sustainable organisations, and we wanted to get ahead of this need at AGSM.”

Full-time MBA students now have a rigorous grounding in the
foundational concepts of sustainability and ethics right at the start of their program. “We then build on these concepts and apply them in every course,” she says.

A strategy component teaches shared value by expanding beyond the needs of shareholders, data analytics explores the use of fossil fuels in technology, and entrepreneurship touches on business models that democratise traditional systems.

Electives are also on offer to allow students to take a “deeper dive” into specific topics at the UNSW Business School in areas such as impact investment, impact measurement and shared value.

She believes the COVID-19 pandemic has accelerated the increased consciousness by consumers in areas such as sustainability, environment, and social issues.

“Companies can choose to meet this new world, with changing consumer ideals, with a responsible mindset, which is both ethical and sustainable in its business practices,” she says.

Venture capitalists are also increasingly directing capital to ESG-focused start-ups. She says people with strong ESG backgrounds are in demand.

Pursuing zero emissions, zero waste and creating circular supply chains were already top of mind even before COVID-19 hit.

“If the last 20 months or so have taught us anything, it is an increased awareness of the value of having leaders that can address the rising concerns of consumers, calculate risks, and make ethical, rapid decisions that are needed for their organisations to survive.”

She predicts this awareness will keep growing and so will the desire to recruit people with a strong ESG background.

“Students are not only interested in climate change and how to transform our energy sector, but also, creating companies that have diverse teams and deliver fair pay for fair work,” she says.

They are also interested in global and far-reaching complex issues like poverty alleviation and responsible consumption, she says.