Not long ago, business schools were clambering to launch environmental, social, and governance (ESG) courses to meet ballooning demand. Fuelled by regulatory momentum, investor scrutiny and a wave of student interest in aligning purpose with profit, growth accelerated from the late 2010s onward.
More recently, however, ESG education has encountered pushback, particularly in the US, where political resistance and shifting employer priorities are reshaping how these subjects are taught and framed for the world’s next generation of financiers.
Now, schools face a more sobering question: is the ESG boom in business education heading for a correction, or just entering a new phase of maturity?
At Yale School of Management in Connecticut, the answer is more evolution than retreat. Todd Cort, a senior lecturer in sustainability, says the curriculum still treats ESG as a core element of financial risk, with students expected to look beyond shareholder returns.
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But the job market that students are entering is shifting beneath their feet. In the US, there is political backlash against ESG, particularly in conservative-led states, pushing some employers, mainly in finance and energy, to downplay their ESG strategies.
“Long-term risks are being discounted,” says Cort.
After a period of strong growth, big financial institutions, including Wells Fargo, HSBC and Barclays, have scaled back ESG-specific roles or restructured their sustainability teams. Yet hiring has not stopped. Banks continue to seek ESG expertise, particularly in risk and compliance, with many roles now folded into broader business functions.
That shift is starting to echo in the business classroom. Schools are not scrapping ESG courses, but they are adjusting them, moving away from broad messaging towards a more pragmatic focus on material risk, regulation and financial performance.
Ivo Welch, chair in finance at UCLA Anderson School of Management in California, says ESG teaching has always followed market signals. If employer demand fades, he expects student interest to follow — and with it, a likely pullback in course offerings.
“The market demanded these skills and the schools delivered,” Welch says. “As the market demands less, the schools will deliver less.”
For some recent graduates, the gap between classroom theory and workplace reality is becoming clear. Yiwen Liu, a 2023 graduate of the MSc in sustainable and green finance at the National University of Singapore, says her academic training provided a strong foundation. But applying it in practice demanded more than academic theory.
“In university, ESG is often presented through clean frameworks and idealised models. In reality, things are rarely that straightforward,” says Liu, now a sustainable finance analyst at Deutsche Bank in Singapore. She says regulations change quickly, stakeholders sometimes pull in opposing directions, and commercial pressure can make consensus difficult.
Her experience reflects a broader shift described by some educators as ESG’s transition into a maturity phase: less idealism, more realism.
Yet this evolution has not led to a retreat. There is no clear evidence that business schools are cutting ESG courses in any significant way. In fact, many are still growing their sustainability offerings. But the emphasis is shifting towards how sustainability shows up in everyday business decisions.
At New York University’s Stern School of Business, Tensie Whelan, founding director of the Center for Sustainable Business, says student interest remains strong. “We have yet to see a drop-off in demand for these classes,” she says.
The school has sought to avoid the ESG label, focusing on sustainability, a term Whelan argues is more firmly tied to business principles. “I see ESG as solely a system of measurement and divorced from profitability,” she says.
“Sustainability needs to be taught as a form of good management that . . . drives better financial and societal performance,” she adds.
At the University of Oxford’s Saïd Business School, the language may differ, but the shift in emphasis is similar. ESG remains part of the conversation, but the UK school’s focus is broader, anchored in holistic sustainability and systems thinking.
That approach predates the US backlash against “woke capitalism”. “Our core focus on the connection between sustainability and business value is unchanged,” says Mary Johnstone-Louis, a senior fellow in management practice at Saïd.
She adds that demand has held steady. The school’s pre-MBA climate boot camp and climate summer school have seen record interest, and its executive programme, Oxford Leading Sustainable Corporations, has trained more than 5,000 participants to date.
The CFA Institute, which runs the chartered financial analyst exams, also sees no sign of a pullback in ESG education. “Anecdotally, we do not hear any talk of ESG content retreat from universities,” says Richard Fernand, head of learning content and innovation.
ESG, he adds, is becoming more deeply embedded in finance training. More than 70,000 people have filed for the CFA Institute’s sustainable investing certificate, and another 1,500 have taken up its climate risk certification.
“There is exceptionally strong interest in the Asia Pacific region,” Fernand says, with Hong Kong standing out thanks to a government reimbursement scheme that covers up to 100 per cent of the cost for approved ESG training.
That momentum is playing out on the ground. Jean Sau, a 2023 graduate of the MSc in climate change, management and finance at Imperial Business School in London, now works in EY’s climate change and sustainability consulting practice, based in Singapore.
Since graduating, Sau has seen rising interest in ESG in south-east Asia, with clients increasingly reaching out for guidance. “There are a lot of opportunities in this space,” she says.
Still, she says some technical areas, such as the mechanics of carbon markets, were barely covered during her degree, and had to be learned on the job. For Sau, it shows the need to integrate more technical depth into finance.
That call for greater rigour is echoed at the institutional level. Jad Bazih, head of the financial strategies and responsible investments masters programme at Audencia Business School in France, refers to the political pushback in the US as a “stress test” for ESG training.
“Superficial ESG rhetoric is being flushed out,” he says. The next phase, he suggests, will move away from ESG as a symbolic credential and towards a discipline grounded in hard numbers and clearer links to financial risk and return.
Business schools rode the ESG wave in its early stages. Now, they are under pressure to show it holds water.
