Feature of the Week

April 20, 2014 11:30 pm

MBAs recognise value of tapping into water management

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Business school graduates heading to jobs in sectors such as energy, telecoms, drinks or apparel may find the subject of water appears on their agenda. Some may even find themselves wishing that their MBA had given them a better understanding of water management.

Given the technical complexities involved in managing everything from water conservation and contamination to extraction of raw materials from wastewater, business schools may struggle to provide more than a superficial understanding of the challenges. But for those that can, there is an opportunity. Demand in the corporate sector for greater knowledge about water management is growing.

Research published last month indicates increasing concern among companies about how to deal with water risks and opportunities. More than three in four companies said they were already facing water-related challenges, according to the study by Vox Global, a communications firm, and Pacific Institute, an environmental research group.

On average, respondents said that they saw water management as the most significant sustainability issue they faced, with almost 60 per cent predicting that water challenges would have an impact on business growth and profitability in the next five years. Nearly 85 per cent said that, in five years’ time, water issues would influence decisions on where they located their facilities.

Such findings indicate a gap in the market – one that business schools might fill if they can equip executives to deal with water issues.

“Water is going to be seen as a strategic resource,” says Tony Calandro, head of Vox Global’s sustainability and CSR practice group. “Within a business school environment, it’s about understanding how the competition for water is going to impact the business and integrating that into the curriculum.”

However, schools face difficulties in trying to incorporate the subject into the curricula. Water issues are often complex, local and technical, requiring expertise more often found in science or engineering schools than in management education institutions.

“If you have world-class water and engineering people doing advanced research, you can get a good blend of the technology and the management if you put it together properly,” says Peter Lacy, managing director for Asia-Pacific of strategy and sustainability services at Accenture, the professional services group.

Some schools are able to do this by offering joint degrees from both the business school and the engineering or other institutions.

“Business schools have a responsibility to ensure that future leaders are exposed to the basics of environmental management through collaboration with departments of engineering, hydrology, science and technology,” says Jean-Paul Jeanrenaud, director at WWF International (World Wildlife Fund) and co-founder of the University of Exeter Business School’s One Planet MBA.

But for those schools that are not part of large universities, and cannot tap into the expertise of academics from other disciplines, introducing water management into the curriculum will be tough.

“Unless there’s someone in the faculty with a passion or they are able to leverage experts to shape the curriculum, schools are poorly positioned to bring that depth of knowledge to issues such as water,” says Mr Lacy, who sits on the boards of several global business schools.

Some schools have turned to non-academic partners. In the Netherlands, for example, Erasmus University’s Rotterdam School of Management worked with Wetsus, Centre of Excellence for Sustainable Water Technology, in 2010 to launch a water management specialisation as part of its executive MBA.

However, the question is whether – given the amount of material to be absorbed during the short time span of an MBA programme – the best use of a student’s time would be to delve deeply into the technical complexities of water management.

Some believe water management has a place in management education as companies start embracing business models, such as the circular economy, that place a greater emphasis on recycling and reuse. The University of Bradford, for example, is offering a distance-learning MBA on the circular economy developed with the Ellen MacArthur Foundation.

Mr Lacy believes that water should be included in the MBA as part of more general discussions about the efficient management of resources.

This becomes more pressing as commodity costs rise, making a more compelling case for treating wastewater (which contains everything from metals to nitrogen and phosphorus) as a source of raw materials.

“People on MBA courses might not have time to look into water specifically,” says Jamie Butterworth, chief executive of the Ellen MacArthur Foundation. “But if the price of energy, water and virgin materials is going to trend upwards, decoupling growth from resource constraints will allow companies to outperform their competitors – that’s something we’ll start to see covered in the MBA.”

But while companies’ awareness of this might be increasing, it does not always filter down to their recruitment staff. And MBA curriculum changes often reflect the demands of recruiters, explains Andrew Crane, director of the Centre of Excellence in Responsible Business at Schulich School of Business, Canada.

Unless recruiters signal that they are looking for MBA graduates equipped with the skills needed to manage resources such as water, he says, there is not always pressure to alter the curriculum.

“We could easily go far deeper with sustainability teaching but we have to be mindful of our recruiters,” says Prof Crane. “And they’re still not coming on to campus and demanding that graduates know about resource conservation.”

 

Business skills that solve environmental issues

 

When looking for a summer internship, MBAs might not always imagine themselves inspecting cooling towers, working with buildings managers or arguing for the purchase of “air-side economisers”, which move air from outside a building around computer servers. But in one programme, these activities are critical to the internship’s task – identifying potential water savings in large corporations.

When the EDF Climate Corps internship was launched in 2008 by Environmental Defense Fund, a New York-based non-profit, the idea was to place MBA students inside companies so that they could find ways of cutting energy use.

In recent years, however, the activities of some of the interns have expanded to include looking for ways to save water. Working at corporations such as telecoms companies AT&T and Verizon, the interns conduct water audits, create scorecards based on the company’s water consumption, map out the steps needed to improve water efficiency and calculate the return on investment – both financial and in terms of water savings.

In the process, they talk to everyone from C-suite executives to operations managers.

The internship has proved popular with MBAs looking for ways of using their business skills to solve big social or environmental problems, says Victoria Mills, EDF Climate Corps programme director.

“There aren’t many other ways to do something that makes a difference that also builds a career,” Ms Mills says.

This is because, at the end of the internship, students can put real numbers on their CV indicating the contributions they made to water and cost savings at the host enterprise.

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