12 minute read
Sustainability in the Spotlight
The recent changes in the business landscape brought about by COVID-19 as well as a myriad of other global developments has prompted a review of how we run our businesses and the overall economy at large. As such, Sustainability has become an even deeper topic being discussed across various fields of management education, with Schulich faculty exploring a variety of topics, including the financial implications of ESGs, stakeholder reassessments following the COVID-19 pandemic, entrepreneurship and more. Sustainability, now more than ever, remains a topic that is not only salient for our time but integral for the development of the next generation of business leaders.
Sustainability took centre stage in the business world last year — everything from bold declarations of combatting climate change and implementing carbon neutral targets to bringing about greater equity, diversity, and inclusion policies in the workplace.
In a news article that recapped some of the biggest business trends of the years, Reuters proclaimed that 2021 was “the year of ESG investing.” Environmental, social, and governance (ESG) criteria were increasingly embraced by businesses looking to burnish their sustainability credentials while also wooing socially conscious investors, who pumped a record $649 billion USD into ESG-focused funds.
During the past year, many of the School’s faculty members across a wide range of disciplines were actively engaged in research surrounding issues at the core of sustainability and responsible business.
SOCIAL RESPONSIBILITY THROUGH THE LENS OF THE PANDEMIC
The pandemic provided an opportunity for many researchers in the sustainability sphere to re-evaluate long-held tenets and gauge the impact of various responsible business policies in the workplace.
Dirk Matten, Professor of Sustainability and Hewlett-Packard Chair in Corporate Social Responsibility, co-authored a paper with former Schulich faculty member Andy Crane titled, “COVID-19 and the Future of CSR Research”. According to the researchers, the pandemic challenged four key areas of CSR research: stakeholders, societal risk, supply chain responsibility, and the political economy of CSR.
For example, noted Matten, the pandemic has made academics and businesses alike reassess theories about stakeholder prioritization. “COVID-19 clearly illustrated who should be regarded as the most essential stakeholders of business,” says Matten, citing frontline workers in healthcare, food service, delivery, and public transportation. “They were critical in delivering healthcare and keeping the economy going, but at the same time they were often exposed
DIRK MATTEN, Professor of Sustainability and Hewlett-Packard Chair in Corporate Social Responsibility, co-authored a paper titled, “COVID-19 and the Future of CSR Research” with former Schulich faculty member Andy Crane. According to the researchers:
to infection without necessary protections and remain poorly paid and economically vulnerable.”
Adds Matten: “We need to reconsider how value is assessed and allocated in models of value creation if those deemed most essential are receiving such a small slice of the economic pie.”
Charles H. Cho, Professor of Sustainability Accounting and the Erivan K. Haub Chair in Business and Sustainability at Schulich, co-authored a study that looked at the roles of government, corporations and consumers in managing risk during COVID-19. Cho and his fellow researchers found that governments and corporations shifted more responsibility for COVID-19 risk mitigation onto the shoulders of consumers as the pandemic continued over time.
Although governments and corporations initially took the lead in managing risk by putting concrete measures in place — everything from social distancing to mask mandates — as the pandemic escalated, the expectations and roles shifted and “consumers were pushed to the centre stage to protect themselves and others,” says Cho.
DISCRIMINATION IN THE WORKPLACE AND IN THE BOARDROOM
Also exploring the impact of the COVID-19 pandemic this past year were Schulich Professors Winny Shen, Associate Professor of Organization Studies, and Ivona Hideg, the Ann Brown Chair in Organization Studies, who teamed up to produce research that unearthed some counterintuitive conclusions.
Their research found that some workplace diversity and inclusion policies ended up backfiring during the COVID-19 pandemic by making North American employees of Chinese descent more likely to be the targets of prejudice and mistreatment.
Schulich’s Ivona Hideg shone some light in 2021 on another workplace issue: maternity leave. A paper she co-authored found that the longer new mothers are away on maternity leaves, the less likely they are to be promoted, move into management, or advance their careers.
Winny Shen, meanwhile, co-authored a paper that looked at board-level discrimination. Her research revealed that many companies are only paying lip service to the importance of diversity when it comes to corporate boards. The study, which looked at the boards of companies trading on the S&P Composite 1500 Index over a twelve-year period, showed that female CEO board directors get paid less than their male CEO counterparts. Unexpectedly, this gap in compensation was most apparent in organizations that had boards with greater female representation.
WINNY SHEN
Associate Professor of Organization Studies
EXPLORING MORE SUSTAINABLE APPROACHES TO ENTREPRENEURSHIP TRAINING AND DEVELOPMENT
Geoff Kistruck, RBC Professor in Social Innovation and Impact, has some research currently under publication review regarding international development efforts focused on alleviating poverty through entrepreneurship training in rural Sri Lanka. While many entrepreneurship programs seek to elicit more innovative ideas to spur economic growth, the result has been more of ‘copycatting’ existing ideas, which can lead to unwanted hyper-competition.
Kistruck, in conjunction with his co-authors, created a pilot study that attempted to design a new training module focused on “habitual agency” — drawing upon everyday activities such as cooking and farming in which individuals within Sri Lanka effectively transfer such habits to how they think about their business. This was in contrast to the standard training approach of “reflexive agency” in which attempts are made to build new cause-and-effect linkages to create new habits within entrepreneurs. The new “habitual agency” framing was more successful at eliciting changes in perception, as well as an increased likelihood to experiment with new business ideas.
In 2021, Kistruck, who is known for his expertise in finding market-based solutions to poverty alleviation, also became the first Coordinator of Schulich’s new Sustainability Area, created to provide a home for the many activities taking place at Schulich under the umbrella of sustainability and responsible business.
Mike Valente, Associate Professor of Business and Sustainability and Director of Schulich’s BBA/iBBA Programs, is studying the phenomenon of how “meta-organizations” — collaborative entities composed of many organizations — are formed to achieve sustainability goals and looked at case studies in sub-Saharan Africa. “Africa provides an ideal context to look at this issue because there isn’t the same level of governmental and civil society presence to complement business behaviour,” says Valente. “Our findings showed that metaorganizations may be an effective means of managing the complexity of sustainability and also suggest that meta-organizations may be particularly well-suited to addressing institutional and market voids.”
GEOFF KISTRUCK, RBC Professor in Social Innovation and Impact, in conjunction with his co-authors, created a pilot study that attempted to design a new training module focused on
Habitual Agency
— drawing upon everyday activities such as cooking and farming in which individuals within Sri Lanka effectively transfer such habits to how they think about their business. MIKE VALENTE, Associate Professor of Business and Sustainability and Director of Schulich’s BBA/iBBA Programs, is studying the phenomenon of how
FRESH PERSPECTIVES ON STAKEHOLDER MANAGEMENT
Examining responsible business issues from a stakeholder perspective is Robert Phillips, the George R. Gardiner Professor in Business Ethics at Schulich and an internationally renowned scholar on stakeholder management. Phillips is also Director of the School’s Centre of Excellence in Responsible Business, a cross-disciplinary hub of sustainability-related teaching, research and outreach and a global leader in creating and disseminating new knowledge about the social, ethical, environmental, and political responsibilities of business.
MetaOrganizations
— collaborative entities composed of many organizations — are formed to achieve sustainability goals and looked at case studies in sub-Saharan Africa.
Phillips conducted some recent research with several colleagues that asked the following question: can shareholder-owned corporations maximize profits without harming their stakeholders? The short answer, according to Phillips, is yes — even though we may be living in a period the researchers describe as “the golden age of corporate wrongdoing” — everything from pharmaceutical companies producing highly addictive synthetic opioids to Facebook designing products for compulsive use in order to sell more ads. The real question, notes Phillips, “is how do businesses need to be transformed so that they actually do serve all their stakeholders and societies? A re-orientation of the whole ‘business as usual’ model seems in order.”
Phillips’ research also explored new and alternate models of CSR and organizational ethics that attempt to reconcile significant structural shifts in global commerce with traditional concepts of corporate responsibility. “The rise of outsourcing, sub-contracting, and mobile app-based platforms shifts have dramatically restructured relationships between and among economic actors,” says Phillips.
CORPORATE REPORTING: IN SEARCH OF GREATER TRANSPARENCY
Transparency is one of the key watchwords in today’s corporate reporting circles, but Schulich Professor Charles H. Cho and some of his colleagues raised an interesting question: are shareholders willing to pay more for greater financial, social, and environmental disclosure?
According to their findings, investors are willing to shell out for financial and environmental information, but not social information. Says Cho: “This interesting finding once again brings up the heated discussion about the fake image of a ‘socially conscious’ investor.”
Cho also collaborated on research that examined the progress Canada’s largest companies are making in their sustainability reporting, as well research to identify the current state of sustainability integration in Canadian government procurement.
Schulich’s Charles H. Cho examined environmental issues through both an accounting lens and a business ethics lens this past year. A study that Cho co-authored found that companies operating in cities with elevated levels of air pollution exhibit a greater likelihood of restating their financial statements and manipulating earnings to inflate their bottom line.
In another study focused on social and environmental accounting, Cho and his fellow co-authors advocated for a systems approach that takes into account the links and interactions between corporations, society and ecology, rather than treating companies as detached from their natural environment. The authors argue this new paradigm “has the potential to offer transparent, inclusive and ethically sound data at the intersection of business, government, society and planet”, which in turn would help key decision-makers make better decisions.
CHARLES H. CHO
Professor of Sustainability Accounting and Erivan K. Haub Chair in Business and Sustainability
Lilian Ng, the Scotiabank Chair in International Finance at Schulich, also delved into the issue of climate change and greenhouse gas emissions from a different angle. Ng, together with several other academics, carried out research which showed that US companies were outsourcing their carbon footprints to overseas suppliers to keep environmental activists and climate-conscious investors and consumers at bay.
According to the researchers, firms tend to outsource emissions to supplier countries with laxer environmental regulations, and often use emissions outsourcing as a substitute for investing in green technology and pollution abatement measures.
When it comes to finding ways to curb greenhouse gas emissions, one Schulich researcher is tackling the issue right in his own backyard. Burkard Eberlein, Professor of Public Policy and Sustainability, was appointed in 2021 as one of four York University Provostial Fellows tasked with helping the University achieve carbon neutrality by 2049. The project is targeting emissions associated with commuting to the campus, which is the single largest contributor to York’s carbon footprint.
Schulich researchers, Avis Devine, Associate Professor of Real Estate and Infrastructure, and Jim Clayton, Director and Timothy R. Price Chair at Schulich’s Brookfield Centre in Real Estate and Infrastructure, approached environmental sustainability from the perspective of commercial real estate.
The two researchers, along with another co-author, published a paper that looked at ways in which to make commercial buildings more sustainable and energy-efficient. The researchers showed that behaviour-focused “soft interventions” such as monitoring software and tenant engagement programs can be as effective as green building certification when it comes to lowering energy consumption and making buildings more sustainable.
“To understand the impact of environmental interventions on building operations, we have to move past certifications to include other intervention types as well,” says Devine. *
LILIAN NG
Professor of Finance and Scotiabank Chair in International Finance
A LEADER IN SUSTAINABILITY RESEARCH
Schulich has long been regarded as a global leader regarding research in the field of sustainability — everything from social innovation and CSR to social sector management and business ethics.
The School ranked #1 in the world in 2021 in regard to the number of sustainabilityrelated citations per faculty member in the Corporate Knights global MBA ranking — a testament to the depth and breadth of the research activity at the School regarding the social, environmental, and ethical aspects of management.
The School’s world-calilbre researchers are the main reason Schulich continues to be a global leader in creating and disseminating new knowledge about sustainable business.
