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It's not easy being green

By Peter Walker for CNN
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LONDON, England (CNN) -- Global warming is no longer purely the concern of politicians and environmental campaigners -- business is increasingly affected.

In October last year, a major study of the potential economic impact of climate change, commissioned by the UK government, warned that failure to tackle the issue could eventually cause a global slump.

Then this year, the latest report by the IPCC group of international scientists studying the problem concluded that global warming is almost certainly the result of human activity.

As with so many emerging issues, business schools have been paying attention.

Earlier this month, the highly-rated Sloan School of Management at the Massachusetts Institute of Technology in the U.S. launched its response to the problem, the Laboratory for Sustainable Business.

Also known, in a more catchy fashion, as the S-Lab, it aims to help future business leaders tackle the issues connected to climate change.

Interactive computer-based simulations will let students to play the role of entrepreneurs seeking to maximize their profits investing in companies that do not harm the environment.

In doing this, they will learn the challenges of using renewable resources within the framework of existing business models.

One exercise will make students examine an attempt by oil major Conoco-Phillips to win an oil development contract in Ecuador's tropical rain forest, looking at the choices that can minimize ecological disruption and restore the environment.

Major challenge

The creation of the S-Lab recognizes the scale of the challenge caused by climate change, said Richard Locke, one of six MIT professor who set up the new courses.

"A critical issue for global warming is the ways in which the risks are communicated, and the framing of the solutions, both for specific organizations and for communities," he said,

"S-Lab will teach future CEOs and business leaders the challenges of implementation and how the science of sustainability can be best communicated to policymakers and citizens.

"Up until now we have considered aspects of sustainability -- climate, energy, water, food, poverty, and social development -- in isolation," he said.

"S-Lab is developing an integrated framework to consider the system-wide dynamics of human society along with tools and methodologies for measuring and monitoring sustainability efforts and their applications."

Other business schools around the world are also responding.

The Indian Institute of Management in Lucknow, in the country's north, has started a special course to help MBA students understand the complex system of carbon emissions trading, whereby companies and countries can buy and sell their permitted outputs of greenhouse gases.

The course will also deal with more general ways in which companies can minimize their environmental impact.

It is estimated that India could see an income of around $2 billion from carbon trading in the future, Sushil Kumar, professor of agribusiness at the Institute told the country's Economic Times newspaper.

"There is tremendous potential for companies to grow in this segment and hence essential that future managers are made aware of this," he said, adding that he had already talked about the issue with some of India's biggest corporations.

"They feel there is a need for future managers to be aware of carbon markets and environmental issues," he said.


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Not so green: A factory in northern China.

FACT BOX

FT's Executive MBA Rankings
1. Wharton, U.S.
2. Hong Kong UST, China
3. London Business School, UK
4. Instituto de Empresa, Spain
5. Fuqua, Duke, U.S.
6. Chicago GSB, U.S.
7. Columbia, U.S.
8. Kellogg, U.S.
9. Stern, NY, U.S.
10. Cass, City University, UK
Source: Financial Times 2006

FACT BOX

EMBA SNAPSHOT

Executives taking the top EMBA courses in the U.S., Europe and Asia have average salaries of around $130,000 to $200,000.

A typical EMBA student is likely to be aged in the early 30s, with 6-10 years of working experience.

A top EMBA course can cost $100,000. Customized courses start at a few thousand dollars.

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