‘It’s a fad’: Prestigious business schools are training students in woke capitalism

Daily Caller News Foundation

  • Multiple business schools across the country have added majors and courses regarding diversity, equity and inclusion (DEI) and environmental, social, and governance (ESG).
  • The courses are expected to increase as DEI and ESG become more prominent, experts told the Daily Caller News Foundation.
  • “Historically, business schools would not have trained students to become activists, but activist investors have captured so many fields and now dominate so many corporate boards that business schools must respond to these on-the-ground realities,” Allen Mendenhall, associate dean and business professor at Troy University, told the DCNF.

Prestigious business schools across the country are adding more opportunities to study diversity equity and inclusion (DEI) and environmental, social, and governance (ESG), a trend that’s expected to continue, professors told the Daily Caller News Foundation.

ESG prompts investors to consider factors such as environmental impact and social awareness when making investments, while DEI is a push to increase diversity and inclusion initiatives in institutions such as schools and the workplace. Harvard University, the University of Pennsylvania (UPenn), and Bentley University all offer courses in both subjects as they grow more prominent.

“Historically, business schools would not have trained students to become activists, but activist investors have captured so many fields and now dominate so many corporate boards that business schools must respond to these on-the-ground realities,” Allen Mendenhall, associate dean and business professor at Troy University, told the Daily Caller News Foundation. “Unfortunately, business schools do not seem to be pushing back against ESG. Their embrace of it could sow the seeds of their own destruction.”

UPenn’s business school The Wharton School offers programs in DEI and ESG at the undergraduate and graduate level. Undergraduate students can concentrate in both DEI and Environmental, Social and Governance Factors for Business (ESGB), while graduate students can earn their MBA in the topics.

The DEI major “prepares students to face the challenges involved in creating and maintaining organizations that are diverse, inclusive, and rooted in equity” while the ESGB major will “provide in-depth foundations for those interested in the complex relationships between business and the natural environment and business and society more broadly, including management of environmental, social, and governance (ESG) risks and opportunities, the business and economics of energy, and the ways in which firms incorporate ESG factors into their governance.”

“ESG is kind of like a successor to DEI. I think DEI is kind of under attack now that people are now aware of what exactly they mean when they say ‘diversity, equity and inclusion.’ ESG, I call it a virtue signaling mission from corporations to showcase their good, moral sense of values to the investing public,” David Bray, Kennesaw State University finance professor, told the DCNF.

“The problem is that it doesn’t really help investors and they’re the ones that have committed their dollars and taken risk by buying the stock of the company, so they’re the ones who should be prioritized, not a social justice group of people on the street not investing their own dollars,” he continued.

Harvard University also offers curricula centered around DEI and ESG. Its Diversity and Inclusion Management course trains employees and managers “navigate diverse work settings more effectively” and overcome obstacles to achieve inclusion, while its Sustainable Living course teaches students “how to evaluate environmental, social, and governance (ESG) factors and how to manage impact investments.”

Vikram Gandhi, senior lecturer of business administration at the Harvard Business School and course professor, told the DCNF that the push to include ESG in the classroom is not a political move, but is a critical move to prepare students for a future in investing.

“This is not about whether I’m on the left or the right, or wherever I may be on the political spectrum, It’s just about the fact that this is reality,” Gandhi told the DCNF. “As we think about reality, how we incorporate that into business education is not really a political statement but it’s a statement that’s necessary from an education perspective.”

He told the DCNF that ESG is expected to become a more integral part of everyday life, especially in regard to understanding climate change, and that it is a widely demanded subject from students.

“People can politicize ESG… people can do what they need to do. The fact is that this is not some movement,” he said. “Science is proving that unless we do something about it, the world is going to be a difficult place to live in due to climate change.”

Mendenhall said that business schools “can’t ignore” the rise of ESG and DEI, but that they “don’t have to promote them, either.”

“Faculty in business schools must enjoy the academic freedom to scrutinize and criticize ESG, which seeks to change the nature of corporations and the purpose of business,” Mendenhall said. “The likelihood that critics of ESG will teach courses in ESG seems small, and it’s hard to imagine a curriculum designed to slow the momentum that ESG enjoys. There’s a difference between teaching students what ESG is and how it operates and celebrating ESG as the positive future of financial services and investing.”

Bentley University introduced its Diversity, Equity and Inclusion major in 2021 in response to “growing importance of DEI in the workplace” and a LinkedIn report which found that DEI jobs increased 71% globally in a five year span and collect a “median salaries ranging from $84,000 to $126,000.” The Bachelor of Arts degree trained students on “critical and theoretical approaches to social justice” while the Bachelor of Science taught students “the importance of DEI in organizational strategy.”

DEI programs make students uncomfortable and isolated, Bray told the DCNF. He said that his students have reported not feeling comfortable giving answers because of how instructors might respond.

“It seems like the diversity, equity and inclusion initiatives are only supporting a certain gender/race category. I don’t believe they should be offered in the business school whatsoever,” he said. “I believe that when you get to corporate America you either function as a reasonable adult or you don’t. You’re learning to get along with other people who are different. I think it’s almost laughable that we pretend in the year 2023 that we’re a more racist country than we were in 1923.”

The Association to Advance Collegiate Schools of Business (AACSB), an accreditation organization, published a commitment to diversity, equity, inclusion and belonging (DEIB) which included a manifesto which claims that “business education is a driver for societal good” through increased diversity efforts. The commitment claims that a “narrow definition of diversity is neither useful to our constituents  nor respectful of their individual circumstances.”

“It’s popular. It’s a fad,” Bray said. “Social media spawns ignorance and so more and more people like something and, next thing you know, it’s a part of your life.”

AACSB, Bentley, Harvard and the Wharton School did not immediately respond to the DCNF’s request for comment.

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