Once upon a time, long ago, people who cared about the environment and sustainable resources were called “old hippies,” and the term “green business” was an oxymoron.

Times have changed, and business isn’t done the way it used to be. One need look no further than the courses and activities at top business schools to see that corporate America, increasingly, is adding the promotion of healthy social conditions and community welfare to its bottom line.

Photo: Marsha Miller

Later this month The University of Texas at Austin McCombs School of Business will host more than 1,000 MBAs and business leaders from around the world for the 2003 Net Impact National Conference to discuss the challenges and future of corporate social responsibility. A glance over the conference agenda and the crowd of attendees will re-educate anyone who still thinks that soy-lovers and tree-huggers are the only face of green business.

The conference includes a keynote address by Reginald Van Lee, senior vice president at Booz Allen Hamilton and leader of the Harlem Small Business Initiative, as well as panels moderated by representatives from business giants such as Hewlett Packard, Intel, Reliant Energy and Procter & Gamble.

“It’s not just about going out and being an activist,” says Dr. David Spence, a professor of business law and regulation who serves as faculty adviser for the McCombs School chapter of Net Impact, a national network of business leaders who want to leverage corporate power to create a better world. “Students can go to well-established companies and work in environmental management and environmental compliance, and the number of jobs that relate to renewable and alternative energy is certainly growing. I’ve had students get jobs at places like Dell and International Paper that mesh with their desire to protect the environment and benefit society while they use the strong business training they received at UT.”

Membership in student organizations such as Net Impact has exploded over the past few years at a time when American corporations have themselves begun to place greater emphasis on ethics and social issues for a mixture of reasons. The demands of sophisticated consumers, changing regulations, and high-profile business scandals have led many companies to revamp their operations, adding jobs and products that address environmental health issues and global social concerns.

Net Impact, an organization of more than 7,000 MBAs and business leaders, provides opportunities for members to discuss issues such as environmental management, corporate responsibility, business ethics and non-profit management.

Photo: Mark Rutkowski

“These days, I don’t think there’s a specific ‘type’ of student who’s focusing on socially responsible corporate behavior and an education in that,” says Lee Zarnikau, coordinator for sustainable development at ConocoPhillips, McCombs School alumna and Net Impact member. “When you talk about sustainability in the business context, for example, you’re not talking about something outside of business, something that’s a luxury to know. It’s just a necessary part of business now, and part of doing well and remaining viable is paying close attention to environmental and social factors.”

Statistics and studies support Zarnikau’s assertion that socially responsible behavior may be a necessity if a company wants to thrive.

In a 1999 Environics survey of 25,000 people in 23 countries on six continents, half responded that they pay attention to companies’ social behavior, and more than one in five reported having rewarded or punished a company based on that behavior. A survey by Cone Communications and Roper Starch Worldwide found that 54 percent of respondents would pay more for a product that supports a cause they care about; 66 percent said they would switch brands and 62 percent said they would switch retailers to support socially responsible business behavior. Yet another study found that nearly 90 percent of consumers surveyed would be more likely to buy from a company that has the best reputation for social responsibility.

Studies also reveal that socially screened investment portfolios in the U.S. rose by more than a third from 1999 to 2001, and retail ethical funds doubled in size every three years in the United Kingdom during the 1990s, with some of the funds repeatedly outperforming the market average.

Because of sophisticated consumers’ demands, changing business regulations and high-profile business scandals, many companies have revamped their operations, adding jobs and products that address environmental health issues and global social concerns. What’s good for the planet’s health is turning out to be good for profits as well.

For students interested in coursework that focuses on socially responsible business practices, the McCombs School offers an outstanding level of support and opportunities for networking.

“Over the past two or three years the McCombs School has taken major steps to become a leader in business ethics and socially responsible business practices,” says Steve Salbu, associate dean for graduate programs, director of the McCombs School Business Ethics Program and faculty adviser to the local chapter of Net Impact. “For instance, we’ve developed the McCombs Business Ethics Program, which brings in nationally and internationally renowned guest speakers. That program now has an endowment, thanks to the generosity of numerous alumni, friends and supporters who understand that ethics is a central part of good business.”

Salbu also points to the MBA interdisciplinary specialization in social enterprise as an example of the school’s drive to satisfy students who want to solve social and environmental problems while working in a business setting. Career options for MBAs choosing this specialization range from employment in a company’s environmental management area to positions in corporate compliance offices or community relations management.

“Students taking the courses we offer in the social enterprise specialization are more heterogeneous than most people realize,” says Salbu. “The courses attract students specializing in areas as diverse as finance and hedge fund management, marketing, management consulting and entrepreneurship.”

With many of the solutions to environmental and social problems arriving via the innovative ideas, technologies and products that smaller companies and entrepreneurs foster, it is crucial that students familiarize themselves with small business operations as well as the complexities of the corporate world. Nonprofits offer an excellent study ground for future entrepreneurs.

Steve Salbu, associate dean for graduate programs in the McCombs School, is the director of the Business Ethics Program and faculty adviser to the local chapter of Net Impact.

Photo: Mark Rutkowski

The Community Development Practicum is a course that gives graduate students a chance to work as consultants for local nonprofits, drawing on sound business skills to solve problems the nonprofits face. In helping their clients, the students refine their communication skills, cultivate relationships with community leaders and learn valuable lessons that may be used in any business setting.

“I have serious-minded MBAs in this class, and even if they end up at a large corporation, they’re going to be able to draw upon what they absorb from interaction with the nonprofits,” says Eugene Sepulveda, a marketing lecturer who teaches the practicum. “They learn how to operate in an environment of scarcity and maximize resources, and they learn a tremendous amount about being good managers by seeing how the nonprofits motivate, train and keep volunteers. It’s also very satisfying for the students that the nonprofits implement their business solutions.”

Projects offer students the opportunity to work with everything from community development financial institutions to the film industry and public radio.

Similar in purpose to the Community Development Practicum but different in structure, the McCombs School’s Plus Program also includes a Community Development and Social Enterprise Academy that takes MBAs out of the classroom and into the nonprofit sector.

The innovative Plus Program divides each semester of an MBA’s two years into two, six-week modules with a two-week period in between that allows students to leave the classroom and experience an immersive professional development opportunity, with topics running the gamut from business ethics to global entrepreneurship and energy finance. Through Plus, McCombs MBAs learn about world cultures, for example, by sampling the cuisine and dancing to the beat of their music as well as examining their economies.

During a two-week hiatus from regular coursework, the Plus Community Development and Social Enterprise Academy sends students into the community to learn how nonprofits resemble and differ from private sector businesses. They develop project ideas that can turn assets into revenue streams, evaluate markets for the proposed goods or services, identify the financial impact of the concept and work with community social entrepreneurs to investigate the viability of their solutions.

Eugene Sepulveda teaches the McCombs School’s Community Development Practicum, a course that gives MBAs an opportunity to work as consultants for Austin-area nonprofits.

“The energy, expertise and perspective of the MBA Plus students create a special kind of community engagement,” says Deborah Edward, Executive Director of Greenlights for Nonprofit Success, a Central Texas nonprofit that coordinates the Plus Program’s Community Development Academy. “The results this year will be tactical business plans and financial analysis of ideas that earn income—and a great beginning for MBA students in their civic involvement.”

For business students interested in volunteerism, nonprofit management and philanthropy, the Lyndon Baines Johnson School of Public Affairs’ RGK Center for Philanthropy and Community Service recently implemented a Portfolio Program through which graduate students in several academic units, including the McCombs School, can research and study the philanthropic sector. MBAs accepted into the program are required to complete 12 credit hours of approved courses, 40 hours of volunteer work and present a scholarly research paper on a relevant topic. Students receive a certificate upon completion of the Portfolio Program.

“More and more, nonprofits are streamlining their operations and resembling private sector businesses,” says Moira Foreman, program coordinator for the RGK Center’s Graduate Portfolio Program. “And businesses, in turn, are working with nonprofits. Businesses are more engaged in local communities than ever before, and it’s highly likely that someone could have a job in a large company that involves work with nonprofits, so it’s important to know their operating styles and service needs.”

From serving on a nonprofit’s board to following an entrepreneurial urge and creating an environment-friendly business of one’s own, the field is wide open for MBAs eager to change the future by taking their beliefs to the business arena.

Seth Goldman, chief executive officer of Honest Tea and a keynote speaker at this year’s Net Impact conference, is happy to witness this change in the corporate climate and the enthusiasm that a new breed of MBAs brings to their mission.

“Students who want to be good stewards of the environment and society can be entrepreneurs, work at nonprofits or go to very large corporations and be the instigators of change for the better,” says Goldman. “Consumers and investors are demanding a new way of doing business, and these graduates are going to be out there to answer the call. When you have beliefs and you want to live them, it’s so important to remember your goal, to take control and shape your path. These students are doing that—they’re changing the future and pushing the envelope.”

Kay Randall