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Become an ESG Expert With an MBA Degree

Environmental, social, and governance (ESG) issues have recently become hot topics among business leaders and consumers. Its concepts and implications for modern businesses’ success are now essential for decision-making in business. ESG benefits companies in many ways: it offers a competitive advantage, attracts investors, helps financial performance, builds consumer loyalty, and sustains company operations.

The online Master of Business Administration (MBA) – General program from the University of Mount Saint Vincent (UMSV) equips graduates with a well-rounded business skill set that includes knowledge necessary for ESG strategy. The curriculum focuses on marketing, financial, operational, and leadership aptitudes, preparing business professionals for ESG success.

What Is ESG?

The ESG framework measures or quantifies an organization’s performance and level of sustainability based on various criteria. This article from Corporate Finance Institute (CFI) further explains the meaning of each word:

Environmental: Impact(s) an organization has on the environment, including the amount of greenhouse gas emissions, use of natural resources, and resilience against climate risks

Social: Relationships between stakeholders and an organization (factors an organization may also consider include human capital management, the impact of an organization within the community, and supply chain partners)

Governance: How an organization is managed and led — ultimately, how leadership, stakeholders, and transparency function within the organization

Although ESG was originally used for investment purposes, the application has broadened to include all industries to track corporations’ impact on the environment, communities, and people. This change is because stakeholders, customers, suppliers, and employees want to support organizations that share their values.

Applications of ESG in the Corporate World

ESG’s purpose is to provide stakeholders with an understanding of how a company manages risk and opportunities associated with those criteria, impacting the decisions of investors and consumers alike. According to McKinsey & Company, there are five ways ESG creates real value in the corporate world:

  1. Top-line growth
  2. Cost reductions
  3. Reduced regulatory and legal interventions
  4. Increased employee productivity
  5. Investment and asset optimization

Global sustainable investment topped $30 trillion, partly driven by investors and executives who realize that a strong ESG proposition can safeguard a company’s long-term success.

Implications for Managers

A business professional’s understanding of the complexities of ESG is integral to a company’s ethical behavior, corporate culture, social responsibility, reputation, and bottom line. The primary way corporations keep track of ESG is through reporting.

An RSM article on ESG states, “Information is typically disclosed through ESG or sustainability reports which focus on quantitative and qualitative disclosures of data, providing metrics around the environment, social and human capital, leadership and governance, and business models and innovation.”

These reports align with ESG standards and frameworks such as the Sustainability Accounting Standards Board, Global Reporting Initiative, Taskforce on Climate-related Financial Disclosure, and UN Sustainable Development Goals.

Put ESG Into Practice in Your Future Business Career

Whether mandatory or not, ESG is gaining importance in organizations. For example, the 2022 RSM U.S. Middle Market Business Index report reveals 70% of middle market companies have formal plans or strategies regarding ESG initiatives, up 4% from the previous year. Management graduates must be fully equipped with the knowledge and responsibilities of ESG.

UMSV’s online MBA – General program equips professionals to practice sustainability and corporate responsibility, which inform ESG strategy and modern business success. Through courses like International Marketing, Social Entrepreneurship and Sustainability, and Strategic Management, graduates will gain the necessary skills to drive ESG strategy in any organization through marketing, financial, and management approaches.

Learn more about UMSV’s online MBA – General program.

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