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Meet Andrew Hoffman, the esteemed Holcim (US) professor of sustainable enterprise at the University of Michigan’s Ross School of Business and the School for Environment and Sustainability. Throughout the past thirty years, sustainability has gained significant importance in business schools. However, to truly make a meaningful impact on the world’s greatest challenge, climate change, we must delve even deeper.
In the early 1990s, when I was seeking examiners for my management PhD, many academics declined, puzzled by the connection between the natural environment and business. Even a top-tier school rejected me for a job, praising my work on organizational theory but finding it too focused on the environment. Fortunately, times have changed. The growing recognition that solutions must come from the market has led to a shift in focus, requiring more insights from management research. Today, scholars examine the power of market signals like carbon prices, corporate sustainability strategies, development of sustainable products and services, circular operations, disclosure and sustainability reports, and much more.
While emphasizing win-win market-based solutions is an important first step in reducing costs through energy efficiency, waste reduction, and recycling, or increasing profits through premium pricing for green products, it is not sufficient. It only slows down the inevitable system collapse. It is time to elevate management research and challenge the outdated culture and norms dominating business school scholarship.
Professor Donald Hambrick from PennState’s Smeal College of Business argues that our academic journals prioritize theory over practical relevance and rich details of interesting phenomena. We need new theories to address climate change and fix the system causing it: capitalism. We cannot prioritize the bottom line when our practices threaten the planet’s survival. We face an existential crisis, not an exercise in theoretical advancement.
To respond effectively, research theories must acknowledge the interconnectedness of economic and natural systems. If we fail to do so by 2030, the damage to the global climate will become irreversible, despite advancements in technology and business models. We must be fully engaged with the natural and social worlds, sharing our findings and exploring changes to capitalism, shareholder primacy, global trade, and government policies.
Unfortunately, most business sustainability scholars are constrained by existing theory and the pursuit of prestigious publications for tenure. Simply publishing more papers will not change how society addresses the issue. Our research takes years to be published, reaches few business people, and comes with high production costs. In the face of a crisis with the potential for economic dislocations, we need to question our actions.
We must go beyond existing theory to truly understand the magnitude, scope, and complexity of climate change. Our current management theories are inadequate for the Anthropocene era, where human population and technology significantly impact the planet’s systems. We need to explore changes to the model of shareholder primacy, unfettered global trade, and laissez faire government policies.
Research should delve into key questions, such as the purpose of firms, the relationship between the market and government, the compatibility of unlimited economic growth and mitigating climate change, and ensuring a just and orderly transition away from the fossil fuel sector. We must challenge current research norms and culture by developing metrics that reflect environmental impact beyond human utility. We must also address the climate divide between the poorest and most affluent, who are least responsible but most affected and able to adapt, respectively.
The next generation, particularly Gen-Z and Millennials, is deeply concerned about climate change. They demand content that responds to these issues. While some senior faculty members believe it is not their role to inform the general public, younger scholars recognize the importance of impacting the wider world through their research. If we do not all join in this endeavor, we risk undermining academia’s existence and the planet itself.
Stay up to date with Climate Capital, where climate change intersects with business, markets, and politics. Explore the FT’s coverage and learn more about our environmental sustainability commitments and science-based targets.
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