The P&Q Interview: EDHEC’s Dean On The School’s Focus On ‘Net-Positive’ Business

EDHEC Dean Emmanuel Métais believes that businesses can no longer strive to have a neutral impact on the environment, society, or the planet, but must strive for a net-positive impact. Courtesy photo

For decades, people have talked about “net zero” in terms of carbon emissions. Companies could earn certifications and special labels for reducing as much CO2 from their operations as possible while offsetting the rest through any number of PR generating initiatives they could brag about on websites or marketing campaigns.

A growing number of thinkers believe Net Zero is no longer enough, and that impact should extend beyond carbon. The sheer scale of the problems we collectively face – think the climate crisis, rising inequality, natural resource depletion – means organizations must be more than environmentally and socially neutral. Their impact can and must be positive.

“All businesses now face a profound choice: continue pursuing the shareholder-first model that forces shortsighted decisions, hurts business, and endangers our collective well-being … or build businesses that grow and prosper over the long haul by serving the world – that is, by giving more than they take,” writes Andrew Winston of Winston Eco-Strategies, co-author of 2021’s book “Net Positive.”

In 2023, Thinkers50 ranked the “Net Positive” authors No. 3 on their biannual award list, considered to be the Oscars for the most revolutionary of management ideas.

France’s EDHEC Business School has taken up the net positive mantle in a big way. This summer, the school unveiled Generations 2050, its new strategic plan backed by €270 million of pledged investments. Promoting net positive business is one of its three core pillars.

As part of the plan, EDHEC has pledged €21 million over the next four years to establish a Centre for Net Positive Business. It is also building a €40 million investment fund, called Generations Powered by EDHEC, for socially and environmentally responsible startups as well as research and educational programs led by its Centre for Responsible Entrepreneurship. And, in 2023, it introduced its Responsible Entrepreneurship by Design (RED) methodology, embedding ethical considerations from the start within startups and new ventures.

“Usually, when we want to anticipate trends, Europe tends to look to the U.S. business schools. But on this particular issue of net positive business, I think it’s the opposite,” EDHEC dean Emmanuel Métais says. “Europe, in my view, is a step further in implementing net positive business practices.”

During a recent visit to EDHEC’s Nice campus, Poets&Quants got the chance to sit down with dean Métais to talk about his vision for net-positive business education and equipping students to “walk the talk” through impact.

Our conversation, presented below, has been edited for length and clarity.

All students in EDHEC’s Global MBA program take part in the Sustainable Impact Challenge, a five-month long project in which students work with real companies to solve a sustainability problem. Courtesy photo

Let’s start with a definition of “net-positive” business, as opposed to “net-zero.” Can you give an example?

A very simple example of a net positive company is an American company called Interface, which produces carpet tiles. They are able to sequester carbon in their carpet tiles, so they are net positive in that they sequester more carbon than they produce. This is exactly what we mean by net positive.

Another example is a French app called Yuka created by EDHEC alum Julie Chapon. Yuka is expanding quickly in the U.S. and now has around 15 to 20 million users there. It’s a popular app that allows you to scan products through your phone, whether food or cosmetics, and it tells you whether they are good for your health. This has an impact on society and an impact on the industry. It changes the way we consume food and cosmetics.

What do you think, or hope, your new strategic plan, Generation 2050, says about EDHEC as a business school?

From its inception, EDHEC has been very focused on the humanities – the human side of business. We were created in the north of France by Catholic industrialists in 1906, and from the very beginning, we placed a huge emphasis on the human side of business. What this says about EDHEC is that we believe business can solve problems, and that business must have a positive impact on the world.

We want, through our research and the education we provide to our students – who will soon become decision-makers themselves – to have a positive impact on both business and society.

And how are you transmitting this ethos to students? Do students choose EDHEC because of it?

Yes. One of the reasons students choose EDHEC is what we call our “Empower to Transform.” It’s one of the main priorities in our plan. We aim to educate our students to “walk the talk.” We want them to have a real impact, and through the education we provide, we teach them how to change businesses and organizations from the inside.

EDHEC Business School’s campus in Nice, France. Courtesy photo

To provide very concrete examples of what this means: On the one hand we teach students about the big transitions the world is facing – climate change, biodiversity decline, social justice, and so on. At the same time, we educate them in very practical ways. For instance, all students are required to work on a concrete project within a company, where they have to convince management to engage in positive social impact operations that will be good for both the company and the world. So they have to concretely find ways to do that and concretely help change the company from the inside.

Tell me about the launch of the Centre for Net Positive Business.

One of our priorities is to promote the creation and development of net positive companies. In a nutshell, net positive business is where you create value and make a profit, but at the same time have a positive impact on the world, the community, the environment, and so on.

So we are launching a research center through which we will first work to better understand what net positive businesses are. Second, we will provide companies with tools to help them progress towards a net positive business model – one that makes a profit while also concretely solving problems for society.

Why, in your opinion, is it the responsibility of businesses to improve society?

Over the past four decades, the Nobel Prize winners in economics have moved away from the Milton Friedman school of thought and toward Esther Duflo’s. Friedman’s view that the sole purpose of a company is to create profit, and that people will naturally become happy as a result.

We know that’s not the case. We must teach our students that while a company’s goal is to create profit, it also needs to have a positive impact on the world. This is something we strongly believe in, something the younger generation cares deeply about, and something companies now realize they must address.

This is what we call stakeholder capitalism. We have to teach our students that the main goal of a company is to not only serve its shareholders, but to serve all of its stakeholders at large.

What is the reaction of EDHEC’s business partners and the larger community to the rollout of Generations 2050?

The feedback we’ve received from the business community has been very positive. I’ve presented our Generation 2050 plan to many alumni and business professionals, and each time they tell me, “I work for a company that is net positive or is aiming to become net positive. It’s a true revolution and we want to be part of it.”

So yes, we now have partners who not only encourage us but also sponsor us, whether they’re business partners or alumni.

And, you’re putting some real money behind this as well.

Generation 2050 is a plan in which we are investing €270 million, so it’s quite a significant investment. EDHEC’s business model is somewhat original because we collect money from tuition fees, which is common, but we also generate money from research.

We have specialized knowledge in asset management that allows us to monetize research. For example, a few years ago, we launched a business called Scientific Beta, based on our research, through which we sell indices to asset managers worldwide. We sold this business for €200 million euros, with the proceeds benefiting the EDHEC Foundation. We also have other spin-offs and initiatives aimed not only at impacting the finance industry but also at generating funds to reinvest in the school, research, and social diversity.

You’ve previously written about the need for businesses to tear up their old models in favor of adopting a net positive approach. What do you mean?

To promote the development of net positive companies, we can help first by fostering the creation of startups that are responsible – so net positive – by design.

We can also support the transition of existing companies, including large corporations, to make a significant environmental impact. There are a very few companies that are already net positive, and there are a few that are still reluctant and believe that profit is the sole goal of a company.

However, there is a large group of companies that want to become net positive but don’t necessarily know how to get there. Most companies today focus on minimizing their negative impact, such as reducing carbon dioxide emissions, or energy use, and water consumption. But the goal of the net positive approach is to go a step further – not just decreasing the negative impact but also increasing the positive impact and regenerating the planet. This is where companies need to be helped, and where schools like EDHEC can step in.

In 2023, EDHEC introduced its RED Methodology, standing for Responsible Entrepreneurship by Design. Tell us more about this methodology.

Responsible Entrepreneurship by Design is a specific method developed by EDHEC Entrepreneurs. Entrepreneurship has been a core part of EDHEC’s DNA since our inception. We now have incubators on our campuses in Lille, Nice, and in Paris at STATION F, and we currently incubate around 100 startups every year.

Our ambition is to foster the creation of net positive startups by design, or from their inception. This means that from the very beginning, we support the creation of companies that, while aiming to tap into new markets and make a profit, are also committed to having a positive impact on the world.

For example, we have incubated a well-known startup called 900.care, which produces cosmetic products without using any plastic packaging. You can imagine the positive impact this has on the environment.

How is the RED Methodology taught in the curriculum? Is this something every EDHEC student is learning, or just those interested in entrepreneurship.

Entrepreneurship is part of the curriculum offered to all students. Yes, all of our students are educated in entrepreneurship and trained in the net positive and RED methodology. So they are all familiar with it, and hopefully, once they enter their professional lives, they will apply it in very practical ways.

Do you think the methodology is setting EDHEC apart from other business schools? What kind of impact have you been able to see or measure?

Our RED methodology is a strong differentiator for the school. I’m proud to say it’s an open-source methodology, and it’s now been downloaded by more than 1,000 startups worldwide.

EDHEC has also launched a venture fund, GENERATIONS Powered by EDHEC, with the goal of investing €40 million in startups that are responsible by design. This is a very concrete way to foster the creation of net positive startups that will positively impact the world.

I believe this to be a huge revolution for business schools. I travel around the world, visiting and auditing business schools, and not all of us are at the same stage in this journey. While we all want to move in the direction of having a positive impact on the world, we are not all at the same level.

Founders and team members work at EDHEC’s STATION F hub in Paris. EDHEC has 110 workstations at the famous incubator, its second largest program partner. EDHEC is investing heavily in sustainable and impact-driven startups from STATION F and its other incubators.

You also previously told Poets&Quants that you would like EDHEC to be a leader in Climate Finance. Any new developments to discuss in that regard?

EDHEC is quite renowned in the field of asset management, and we very often take that for granted. We continue to invest heavily in the field, particularly on improving asset managers’ practices, and I believe we’ve been successful in that. But there’s now a significant shift toward focusing on climate finance.

We are about to invest €60 million in the discipline. We have spin-offs in the field of climate finance and in infrastructure as an asset class, which has a huge impact on the environment and climate change. Our goal is to ensure that investors, when making decisions, will properly consider ESG criteria and climate change into consideration.

How does this investment feed into the classroom?

Very concretely, we ask our research engineers and professors to incorporate the results of their research into the programs they teach – whether it’s on climate finance or ESG investing. This is heavily integrated into the curriculum.

As an example, recent research from our Climate Impact Research Center examined the effect of climate change on the valuation of infrastructure assets.

Take the Nice Airport, for example, which is located by the sea. If the sea level is expected to rise by one, two, or even three meters in the coming decades, it’s easy to see how the value of that airport could decrease. As an investor looking to invest billions of dollars in infrastructure assets, you must take these factors into account. This is something we teach very concretely to our students.

Another example: Three years ago, we created a joint specialized master’s in climate finance with MINES Paris – PSL, a renowned engineering school in France. In this program, they teach climate science, and we teach finance. The graduates of this program are easily placed in the finance industry, where they can start to change the industry from within.

In your opinion, do you think European business schools generally – and perhaps French business schools in particular – are putting more urgency and resources behind their sustainability efforts than business schools in the United States?

Usually, when we want to anticipate trends, we look to the U.S. But on this particular issue of net positive business, I think it’s the opposite. Europe, in my view, is a step further in implementing net positive business practices and ESG criteria.

I believe the reason for this is historical: Europe has a tradition of social democracy, and we’ve been educated to incorporate the idea of positive social impact, even in business.

On a personal note, my background is in sociology, and my first research was a study attempting to positively link social performance with economic performance. This was 30 years ago, and I never imagined it would one day become a major trend in both society and business.

You’ve clearly been thinking of these types of issues for a long time. What is it like now leading a business school into, perhaps, a new way of doing business and thinking about business?

I joined EDHEC 30 years ago, and I chose the school for two main reasons. First, for its true entrepreneurial spirit. Second, because it’s a school that really focuses on the human side of business. It really resonated with my values at the time, and it does so even more strongly today.

From where I stand now, I feel that, thanks to the research of our professors, thanks to the students we educate who will become decision-makers in the very near future, I can have a positive impact on the world through education.

Nelson Mandela said, “Education is the most powerful weapon you can use to change the world.” and this is something I can lead on a daily basis.

Business students these days have so much choice, even just in France. Why should they choose EDHEC?

I think our motto, which we decided on more than 10 years ago, sums it up perfectly: ‘Make an Impact.’ This is why someone should choose EDHEC.

We truly walk the talk here. We aim to change the world, and this is concretely reflected in our research, our research centers, and our programs. Our mission is to ensure that by the end of their learning journey, our students are equipped to have a real positive impact on the world.

 

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