Business schools are teaching a model of economics that is ¡°obsolete¡± because it does not take into account issues surrounding climate change.

This is the view of Ebrahim Mohamed, director of education at Climate-KIC, a European Union-funded public-private partnership focused on addressing environmental problems.

Mr Mohamed, the former director of Imperial College London¡¯s executive MBA programme, told ³ÉÈËVRÊÓƵ that climate change is a major part of the ¡°future economy¡±, and business schools need to ¡°fundamentally reorganise [their] curriculum on the basis of this new economy¡±.

¡°The core problem within the business school process is we¡¯re using a model of economics that is a little bit obsolete. We don¡¯t factor in ¡®externalities¡¯ ¨C clean air, water and so on. These are natural assets that are not really accounted for in the conventional economic model,¡± he said.

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¡°Business education needs to [have an] understanding of the evolving challenges that will affect businesses, giving business leaders a deep understanding of how to create business models and solutions that will be durable into the future. By solutions I mean climate-friendly innovation to address business challenges.¡±

He added that because business schools have been around for a long time, they are still entrenched in the, albeit very successful, ¡°old economy¡± of ¡°globalisation and [unsustainable] oil and air industries¡±.

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¡°Promisingly, many business schools are already incorporating [changes] into the courses they offer,¡± he said. ¡°[After the financial crisis] they¡¯ve introduced, in the MBA curricula, modules on ethics and social responsibility; the earliest sign [of change].

¡°And now it¡¯s moving more into the domain of new business opportunities being part of that framework.¡±

Mr Mohamed noted that one school cannot change attitudes, but through ¡°co-opetition¡± ¨C schools competing in business education but being open to collaboration ¨C and experimentation, institutions can change their attitudes and be ¡°at the forefront¡± of this new economy.

Climate-KIC, he said, offers schools the space in which to experiment. Their education partners, which include Imperial, the University of Oxford, ETH Zurich ¨C Swiss Federal Institute of Technology Zurich and the University of Copenhagen, among others, are working ¡°in partnership, exchanging people and ideas¡±, to change their mentalities around climate change and to think about their academic mission.

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¡°If your value paradigm is financial, commercial and [MBA] rankings, it limits you,¡± he said. ¡°[But] it¡¯s quite difficult for a business school to just jump out there and say, we¡¯re about climate and that¡¯s what we¡¯ll be. We offer a framework of de-risking their involvement and are working with them in partnership to understand pedagogic content and curriculum innovation [to promote change].¡±

john.elmes@tesglobal.com