The Business Simulation Blog

Teaching sustainability with business simulations

Posted by Cesim Team on Tuesday, March 01, 2022 | Reading time: 5 min.

Sustainability with business simulationsDuring the last decades, sustainability has become a major aspect in the strategy and operations of many businesses around the world. Understood as the idea of conducting a business while avoiding a negative impact in the environment, the community and the society, sustainability has also become an essential part of business education. Using business simulations can help students incorporate sustainability in their business vocabulary, as well as support them on how to integrate this knowledge in the business life in the real world.

What is sustainability and why it matters

A sustainable business strategy aims at generating a positive impact in the environment and/or society, embracing the idea that it will promote the success and longevity of a company. A business strategy that doesn't include sustainability will fail to recognize how short-term profits seeking may affect the business negatively in the long run, besides of leading to issues such as environmental deterioration and social inequality.

Sustainability strategies vary greatly depending on the industry sector, and can affect different parts of the business' operations. For example:

  • Using sustainable materials in the manufacturing process
  • Reducing waste and minimizing its footprint
  • Improving water efficiency
  • Optimizing supply chains to reduce greenhouse gas emissions
  • Relying on renewable energy sources
  • Sponsoring development programs in the local communities

In 2019, executives from Apple, Pepsi and Walmart, among other nearly 200 executives gathered by the American association of CEOs Business Roundtable issued a joint statement which mentioned that a company should no longer care only about the interests of shareholders, but also invest in the wellbeing of their employees and the protection of the environment, as well as make sure of having an ethical chain of supply. The statement also referenced how the success of a company was tied with that of their communities and countries of operation.

For over 20 years, the Business Roundtable joint statement had alluded at the duty of a company to serve the interests' of it's stockholders. However, by 2018, different businesses belonging to the organization had started to shift their attitudes towards goals related to fighting climate change, reducing income inequality, and improving public health. Public perception and increased transparency practices may have had a role to play in this change, making this approach to doing business even more relevant in the short and mid term.

Moreover, many of today's investors take into consideration environmental, social, and governance (ESG) metrics to analyze an organization’s ethical impact and sustainability practices, which include but are not limited to:

  • carbon footprint
  • water efficiency
  • community development efforts
  • board diversity

The reason for evaluating a company's worth based on these metrics is because high ESG ratings can help a company improve its financial performance. Some of this boost can be derived from the positive public perception, but also from the openness to approach new growth opportunities.

It is also important for a business that truly aspires at becoming sustainable not to fall in the pits of greenwashing, which takes place when a company purposely provides false or misleading information about how environmentally or climate friendly it is. The goal of greenwashing is to capitalize on the growing demand for consuming products from companies whose operations have little or no negative impact in the environment.

Teaching sustainability: a new paradigm

As previously mentioned, there is a growing relevance of integrating practices such as circular economy, cleaner production, and sustainability in business operations. As such, there is also an increasing need to effectively integrate sustainable development in higher education, and corporate sustainability in particular in the case of business education. The students' interest in business education has steadily being shifting from topics such as game theory, valuing securities and negotiating mergers, towards education on climate finance, impact investing and social entrepreneurship.

This trend is a consequence of an increase in job positions that require knowledge in ESG topics, and decision-makers in the business higher education sector consider very likely for this tendency continue. Businesses are opening positions related to financing renewable energy projects and evaluating climate change related risks. At the same time, investment firms are also hiring professionals to evaluate environmental and social issues such as exposure to climate change and sustainable investments.

Including sustainability in education affects not only its contents, but also its process and outcomes. Known as Education for Sustainable Development (EDS), this new approach to instruction requires a new learning culture based on participative processes and new teaching techniques, among which experiential learning is perceived as one of the most promising.

As discussed in a previous blog post, business simulations generate not only positive cognitive and affective learning outcomes, but also improve the participants' skills for critical thinking. What is more, business simulations can also make a course more attractive to students. Research shows that motivation plays a crucial part in the effectiveness of a student’s knowledge retention and attitudes toward sustainability. Particularly, students with higher level of motivation and interest in attending a sustainability-based course attain better learning outcomes, especially when a simulation is incorporated in the learning methods.

Moreover, student engagement in business simulations plays a very important role in explaining not only the transfer of knowledge from higher education to business know-how, but also to the fast adaptation to work environment culture. Research shows that students who have participated in a business simulation have a better performance in a real work environment because they understand how to bridge theory and practice. Moreover, highly engaged students are eager to experiment innovative ideas in their companies, which include following the path of sustainability.


Cesim Global Challenge ESG

Our Strategy & International Business Simulation Cesim Global Challenge now includes new environmental, social, and governance decisions as part of the core business strategy. With fully integrated ESG decisions, teams can incorporate sustainable development goals into their strategy while improving financial performance and delivering value for all stakeholders. A key aspect of the ESG implementation in the simulation is to highlight sustainability and corporate responsibility decisions as fundamental part of the strategy and operations, not as a separate policy.


Request a live demo

Access a free walkthrough of
Cesim Global Challenge ESG

Learn more

Read more:

Tags: Why use business simulations, Generation Y, Millennials, Student engagement, student motivation, business simulation, Higher education, higher ed, ESG, Climate change, sustainability

Subscribe to our blog

Compare our
business Simulations

Which Cesim simulation is right for you?


Learn more

Recent posts:

Demo CTA general

Live demo

Get an unlimited trial account and a walkthrough
of our business simulation games.

Request a demo