IESE professor Jordi Gual

Former CaixaBank Chairman Jordi Gual to rejoin IESE Business School

Jordi Gual will rejoin IESE Business School as a professor of economics at the end of this week. He rejoins IESE´s faculty after finishing his duties as Chairman of CaixaBank, a position he has held since June 2016.

Prof. Gual first joined IESE´s faculty in 1987, where he developed his academic activity until 2005, the year in which he joined the ‘la Caixa’ group. Before taking on the post of Chairman, he was CaixaBanks´s Chief Economist and Executive Director of Strategic Planning, and Director-General of Planning and Strategic Development of CriteriaCaixa.

Among other positions, Prof. Gual is currently a member of the Board of Directors of Telefónica, Vice President of the Círculo de Economía and a member of the Board of Trustees of the Real Instituto Elcano and the Barcelona Mobile World Capital Foundation.

He has been an Economic Advisor at the Directorate-General for Economic and Financial Affairs of the European Commission in Brussels, and a member of the Advisory Council of Economic Reactivation and Growth (CAREC), of the government of Catalonia

Jordi Gual holds a PhD in Economics from the University of California (Berkeley) and is a Research Fellow of the Center for Economic Policy Research (CEPR) in London. He has published extensively on banking and European integration, regulation, and competition policy.

IESE Business School´s Fellowships for Journalists Now Open

  • #1 Ranked Business School by the Financial Times to Award Five Fellowships to Elite Group of Journalists
  • Deadline for applications is June 14, 2021

IESE Business School has announced that the seventh edition of its Fellowships for Journalists program is now open for applications. Created to support journalists interested in expanding their training, the fellowship program will award up to five journalists from around the world with a scholarship to study one of the school´s highly regarded executive education programs.

IESE Business School, which has campuses around the world, has been rated the number one business school in the world for executive education by the Financial Times for a record six years in a row (from 2015-2020.) By participating in one of these executive education programs, selected fellows will be able to advance their professional development and build a solid foundation of general management and business knowledge, which will help in analysis and reporting. In addition, they will have the chance to experience IESE´s world-renowned executive education programs first-hand, all the while networking with high-level executives and business leaders.

This year´s edition of IESE´s Fellowships for Journalists will award five journalists with scholarships covering 80% of the academic fees of an executive education program at IESE. Fellows, depending on experience levels, can study the PMD or AMP in English and the PDD, PDG or PADE in Spanish. 

The fellowship program is open to journalists with at least ten years professional experience who are full-time editorial employees of newspapers, magazines, wire services and broadcast news organizations, as well as freelance journalists. To date, around 30 journalists from the most relevant international media organizations have taken part in IESE programs thanks to this fellowship. Take advantage of this opportunity to train in one of the best business schools in the world.

IESE will particularly favor candidates whose work demonstrates high standards of journalism, ethics and responsibility in the media. In line with IESE’s mission, the school will favor journalistic work that has helped promote ethical business practices or improve situations of social injustice.

The deadline for submitting an application is June 14, 2021. For more details and how to apply, visit:

COVID-19 Management at Vall d’Hebron University Hospital: a new case study by IESE

  • This week a case study exploring how Vall d’Hebron University Hospital was able to effectively manage the COVID-19 crisis was discussed for the first time in an IESE MBA class
  • The case is available for sale from today on the portal IESE Publishing, allowing it to be debated by students from business schools across the world.
  • IESE Business School has been using the case method as a learning methodology in the business world for more than 60 years.

 A case study exploring how Vall d’Hebron University Hospital managed the first wave of the COVID-19 crisis was presented today in class to IESE MBA students by IESE professor and author of the case, Jaume Ribera, and the managing director of the Vall d’Hebron University Hospital, Albert Salazar.

During the class, Dr. Salazar explained how Vall d’Hebron was able to transform itself during the first wave of the pandemic so that it could manage the greatest health crisis experienced by the Hospital. In this class, Dr. Albert Salazar presented the Vall d’Hebron management model and the main operational decisions that made it possible to face the first wave of the health crisis. For his part, Jaume Ribera, IESE professor and Academic Director of the Center for Research in Healthcare Innovation Management, led the discussion of the case, attending to all the proposals, presentations and questions from the students, and drawing out the learning points for other hospitals and business managers.

The IESE professor explained that “investigating how the pandemic was managed in a hospital like Vall d’Hebron is important, since up to now there has not been anything written about pandemic management in a hospital.” With this case study, “we have been able to see a real example of the evolution of the different phases of a crisis, and how it fits into the future strategy of a hospital center.”

The case method

The case method is a learning methodology based on learning by doing, which aims to prepare students for making strategic decisions in companies through the practice of real situations. It is the main learning methodology at IESE, but not the only one.

The students who have discussed the case in class belong to the IESE MBA Program, which is made up of more than 700 students, more than 80% of whom are international. They have an average age of 29 years. The program, which is taught in English and lasts between 15 and 19 months, was chosen by The Economist as the best MBA program in the world this past January.

This case joins the more than 200 case studies written by IESE professors in the last three years, reflecting IESE´s aim of always being up-to-date in the analysis of business problems that arise in the classroom, which include cases of current topics, like Netflix, Barça or Spotify, among many others. At IESE, the cases students study are not just based on superstar big name leaders but the real practical problems faced by managers in variety of contexts, including in developing countries, in small businesses, and in environments where corruption is rife, helping to bring to life the varied situations leaders may encounter.  

A radical transformation of Vall d’Hebron since the beginning of the pandemic

The management of the pandemic has been based on two axes, according to Dr. Salazar, managing director of Vall d’Hebron: “the need to work on any project in collaboration with all the region´s actors and, internally, to strengthen multidisciplinary teams. COVID-19 has shown us that breaking the traditional silos, sharing knowledge and working jointly across specialties, levels, doctors and nurses, can make it possible to achieve far superior results in terms of patient care.”

In Vall d’Hebron, the transformation started very early, even before there was a single case in Catalonia. The Hospital anticipated the arrival of the pandemic by drawing up protocols for action against COVID-19 and contingency plans that proposed up to a dozen scenarios in which, in the worst cases, ICU beds would triple and hospitalization would double. At the end of January 2020, a Coordination Committee was also created made up of the Hospital’s management team and the leaders of the specialties most directly involved in the pandemic. In the committee meetings, which are still held, the evolution of the pandemic is analyzed and management decisions are taken based on the situation.

In anticipation of the avalanche of incoming demand, hospital management believed that all of Vall d´Hebron´s professionals (doctors, medical residents, nurses, etc.) should participate in the challenge. To this end, an innovative decision was made: instead of areas of specialty, everyone would participate in “COVID-19 teams;” each team would be led by a doctor in a specialty key to managing the pandemic (such as infectious diseases, epidemiological preventive medicine, pulmonology, etc.), with anesthetists supporting intensive care doctors (since their work in the operating room had been greatly reduced during the pandemic with the postponement of nearly all scheduled procedures.) These teams, which participated in emergency, hospitalization and critical care services, were key in managing the crisis; without the collaboration of professionals from other specialties, it would have been impossible to meet all the pandemic needs.

Likewise, an emergency public procurement model was designed in order to obtain the necessary PPE supplies, services and materials. Around 800 workers, including those in administration, doctors, pharmacists, etc. were sent home to continue their work remotely and thereby mitigate the risk of contagion. All outpatient visits were suspended and appointments were conducted online or by telephone. The home delivery of medications was also promoted. Family visits to patients were also suspended. As of today, non-COVID-19 patients are allowed visits in certain time slots, but COVID-19 patients are only allowed visits during the end-of-life process.

Another key aspect is internal communication. Through weekly, streamed information sessions, all hospital professionals are kept informed of the latest news and any changes that may be applied to face the crisis. All information is also hosted on a sub-intranet, which was created ad-hoc for all communication related to the coronavirus.

Future challenges and new collaboration with IESE

Coping with the pandemic is an on-going challenge. During the first and second waves, Vall d’Hebron continued its transformation to face the challenge of different future scenarios. As part of this, on February 16 2021, the hospital inaugurated its new Garbí building, a multipurpose space dedicated to the care of patients with COVID-19 in Vall d’Hebron. The building has 56 acute beds and 32 critical and semi-critical beds and concentrates the care of patients with COVID-19.

IESE and Vall d’Hebron will also continue their collaboration to transmit the Hospital’s management model during this pandemic. In the near future, Dr. Salazar will offer other classes at IESE that delve into the key aspects of Vall d’Hebron management.

About IESE Business School

IESE is the graduate business school of the University of Navarra. It is one of the world’s most international business schools, with campuses in Barcelona, Madrid, Munich, New York and São Paulo, and programs offered throughout Europe, Africa, Asia and the Americas. For more than 60 years, IESE has been at the forefront of management education and leadership development. It has done this through offering transformational educational experiences to more than 50,000 entrepreneurs and executives. IESE´s mission today remains the same as it was back when it was founded in 1958: to educate and inspire leaders who wish to have a positive and lasting impact on people, business and society. This effort has been recognized by the Financial Times ranking, which for the sixth consecutive year has positioned IESE as the number 1 school in the world for executive education. Web:

IESE ranks among the best business schools in the world

Financial Times ranks IESE’s MBA fourth in the world

  • Result follows recent no.1 ranking in The Economist, consolidating IESE´s positon as one of the world´s top business schools
  • FT ranking highlights IESE´s focus on responsible business, career outcomes for graduates and the program´s internationality

February 08, 2021. The FT Global MBA Ranking 2021, released today by the Financial Times, has ranked IESE Business School´s full-time MBA in the top five programs in the world, and third in Europe. This latest result, which comes off the back of ranking no.1 in the world by The Economist, consolidates IESE´s position as one of the best MBA programs in the world.

According to the FT´s 2021 ranking, IESE´s full-time MBA ranks joint fourth in the world, alongside Yale School of Management. Insead, followed by London Business School in second and Chicago Booth in third, complete the top five spots. 

No.1 in the world for CSR

This latest ranking by the Financial Times particularly highlights IESE’s strength in developing responsible business leaders. IESE’s MBA is ranked first in the world for Corporate Social Responsibility (CSR) for the second year in a row. The CSR metric looks at course content dedicated to CSR, ethics, and social and environmental issues. It means that since this criterion was introduced by the FT in 2019, IESE has only ever ranked first or second in the world on this measure.

“Coming first in the world for Corporate Social Responsibility for the second year in a row reflects our focus on social impact,” says Marc Badia, Associate Dean for MBA programs at IESE Business School. “Throughout the MBA, students take courses covering all aspects of social, environmental and ethical issues in business.  That includes dedicated courses on topics like social impact consulting, or our new joint MBA course on the Future of Capitalism, where students critically observe the current state of capitalism and explore the roles of business leadership required to create a better future.”

The career outcomes for IESE MBA students also stood out as key to IESE´s good performance in the ranking. IESE ranks no.5 in the world for the career progress of its MBA graduates. There was also a 131% salary increase on average for IESE graduates, the highest increase of any school in Europe according to the ranking.

IESE also ranked no.8 in the world for International Course Experience, as well as performing well on the international mobility of its alumni (no.12 overall), reflecting the strong international approach of the program which prepares its graduates to take up positions across the globe. On the IESE MBA, students have the opportunity to gain first-hand experience of business across different continents and interact daily with international faculty and peers.

“While there are always a number of factors that determine a school´s ranking position in any given year, this excellent result combined with our solid performance in the major international rankings year-on-year, confirms the strength and depth of our program,” says prof. Badia.

This latest result continues IESE´s strong performance in the major international rankings over a number of years. Including:

  • 1st in world according to The Economist 2021 MBA ranking
  • 1st in the world for executive education for six straight years (2015-2020), according to the FT Executive Education ranking
  • 3rd in Forbes for the two-year international MBA

See the complete FT ranking here


WHU and IESE join forces

Boosting Board Member Performance: WHU and IESE Join Forces to Launch New Program

  • WHU – Otto Beisheim School of Management and IESE Business School are launching a unique Executive Education program aimed at improving corporate and supervisory board member effectiveness. The international program, which starts in May 2021, will be taught in Düsseldorf, Munich and Barcelona.

February 2, 2021. The joint High-Performance Board Member Program of WHU – Otto Beisheim School of Management and IESE Business School enables participants to enhance their executive impact by focusing on the critical issues and strategic challenges facing organizations today: digitization, stakeholder management and how to successfully counteract corruption. The program combines a dynamic practical approach with methods academically proven to get results, including interactive lectures, team-based projects, case studies and guest speaker sessions with distinguished supervisory board members from some of Europe’s largest companies.

“In a business landscape characterized by constantly evolving challenges, the High-Performance Board Member Program provides top-level executives with critical strategic tools for shaping the future of their organizations to secure long-term success,” states Professor Dr. Serden Ozcan, Chair of Innovation and Corporate Transformation at WHU. “Participants will benefit from the cooperation between the two highly ranked Business Schools,” he adds.

The program is designed for senior-level executives who currently serve on corporate boards and those who aspire to transition into this role, as well as senior managers who seek to engage more effectively with their board.

Marc Sachon, professor of Production, Technology and Management at IESE Business School, says, “by drawing on the deep expertise of both institutions and by collaborating with their high level C-suite peers, participants will learn how to boost overall board performance and drive business value.”

The three modules of the High-Performance Board Member Program will take place on the WHU campus in Düsseldorf, followed by IESE Business School´s campuses in Munich and Barcelona, comprising seven days in total from May 31, 2021 to September 08, 2021. Participants will be taught by world-class faculty from both institutions, including the program´s Academic Directors: Professor Dr. Serden Ozcan, Chair of Innovation and Corporate Transformation, as well as, on the part of IESE Business School, Professor Marc Sachon, Ph.D., Professor of Production, Technology and Management.

About WHU – Otto Beisheim School of Management:

WHU – Otto Beisheim School of Management is an internationally oriented, privately financed business school with university status, located in Vallendar and Düsseldorf. At WHU, more than 50 faculty members research and teach in the fields of management, finance and accounting, economics, entrepreneurship and innovation, marketing and sales, and supply chain management. WHU’s high level of research competence is the result of a focus on three fundamental research principles: quality, internationality, and relevance for teaching and practice.

WHU’s strategy is based on four core values: excellence, entrepreneurship, strong cohesion, and a cosmopolitan culture. An atmosphere characterized by openness, curiosity, diversity, and equal opportunities is of utmost importance to WHU. Further information.

About IESE Business School:

IESE is the graduate business school of the University of Navarra. It is one of the world’s most international business schools, with campuses in Barcelona, Madrid, Munich, New York and São Paulo, and programs offered throughout Europe, Africa, Asia and the Americas. For more than 60 years, IESE has been at the forefront of management education and leadership development. It has done this through offering transformational educational experiences to more than 50,000 entrepreneurs and executives.

IESE´s mission today remains the same as it was back when it was founded in 1958: to educate and inspire leaders who wish to have a positive and lasting impact on people, business and society. This effort has been recognized by the Financial Times ranking, which for the sixth consecutive year has positioned IESE as the number 1 school in the world for executive education. Further information.

The Future of Capitalism MBA course

IESE and Shizenkan Launch MBA Course on The Future of Capitalism

  • Students critically examine today´s socio-economic system and then present their vision for the future of capitalism to a group of prominent business leaders and CEOS
  • Guest speakers include formerly homeless children and former child soldiers, as well as top executives, entrepreneurs, policy makers, academics and activists of various backgrounds
  • The course is a joint initiative between IESE Business School, Spain, and Shizenkan University, Japan, in cooperation with the School of Inspired Leadership (SOIL), India and Fundação Getulio Vargas (FGV), Brazil

January 26, 2021. IESE Business School and Shizenkan University, in cooperation with the School of Inspired Leadership (SOIL), India, and Fundação Getulio Vargas (FGV), Brazil, have joined forces to deliver an MBA course designed to help students critically observe the current state of capitalism and explore the roles of business leadership required to create a better future. The course will explore the key issues society faces within the capitalist system today, and invite students to reflect and come up with a plan on how business (and themselves as future business leaders) can have a more positive role in society. At the end of the course, students will present their own vision for a more equitable form of capitalism to a group of prominent business leaders and CEOs.  

The Future of Capitalism is an optional MBA course open to second year IESE MBA students, as well as MBA students at the three other participating schools. The three-month long course kicks off this week on January 26 with 81 students from 22 different countries.

During the course, students will engage in virtual conversations with a variety of guest speakers from around the world, including people dramatically affected by our current capitalist system, such as formerly homeless children and former child soldiers. They will also hear from top executives, entrepreneurs, policy makers, activists of various backgrounds, and academics, among others.

Some of the sessions include:

  • Hearing from former child soldiers in Uganda who were kidnapped and forced to participate in military actions. This session will be coordinated in cooperation with Shingo Ogawa, President of Terra Renaissance, a Japanese NGO that offers vocational training for former child soldiers in Uganda.
  • A dialogue with formerly homeless children in Bangladesh, coordinated in cooperation with Shubhashish Roy, Founder and CEO of Ekmattra Society, a Bangladeshi NGO promoting the advancement of underprivileged children.
  • A discussion about capitalism, democracy, and the role of the media with Mark Thompson, former CEO of New York Times and Director-General of the BBC
  • A session discussing climate change and environmental sustainability with Jennifer Morgan, Executive Director of Greenpeace International

The program has been designed and led by Tomo Noda, Professor and Chair of the Board of Trustees at Shizenkan University, and Franz Heukamp, Dean of IESE Business School. Together they, along with the other co-academic directors, will lead and facilitate the discussions in class.

Throughout the course, students collaborate in teams to work on a final output, where they develop an outline of how business can build a bridge between the current status quo and their future vision of capitalism. Two finalist teams will then present their outputs to a group of prominent business leaders who are supporting this MBA initiative. These include, among others:

  • Paul Polman, Honorary Chair of International Chamber of Commerce and former CEO of Unilever
  • Tak Niinami, CEO of Suntory Holdings
  • James Higa, Executive Director of Philanthropic Ventures Foundation and former Senior Director of Office of the CEO at Apple
  • B. Muthuraman, former Vice Chairman of Tata Steel and Chairman of Tata International
  • John Elkington, Founder and Chief Pollinator of Volans; among others

The business supporters and academic directors will then discuss the findings in a roundtable discussion with the whole of the class.

In addition to teamwork, each student is also expected to reflect upon the responsibility of business leaders, and translate the inputs from the sessions into a personal commitment for the betterment of society and an actionable plan to bring about changes to their future professional environment, further boosting the impact of the course.

Franz Heukamp, IESE Business School Dean and co-Academic Director, said:

“It is crucial that business works for the good of every one of us, not just a select few. In the past, many business programs have not done a great job overall with the ´why´ of business. Many have been very good for the most part with the ´what´ – the technical, managerial, entrepreneurial education of business leaders. But most schools would probably admit that they have not gotten their best grades when it comes to purpose, to business ethics, to teaching people how to use their powerful positions in order to make the world a better place. That is why we are happy to partner for this innovative MBA course, which enables the next generation of business leaders to think about these issues in the first person, and gain insights on how to reshape the future of capitalism to have a more positive impact for all.”

Despite the covid-19 pandemic creating logistical difficulties for meeting in person “this initiative also show how we can continue to bring together relevant people from different parts of the world to deliver educational experiences across the globe”, he added.

The Economist Ranks IESE’s MBA no.1 in the World

  • The Economist’s 2021 WhichMBA? Full-time ranking highlights the educational experience of the program, potential to network and career opportunities for graduates

Madrid/Barcelona. January 21 2021. IESE Business School´s MBA program has been ranked the best MBA program in the world, according to The Economist´s WhichMBA? 2021 Full-time ranking, released today.

The Economist ranking assesses full-time MBA programs across four broad areas: the creation of new career opportunities, personal development opportunities and educational experience, salary enhancement, and the potential to network. IESE´s position at the top of the list reflects its high scores across all four categories.

In particular, the ranking highlighted the exceptional educational experience that IESE´s MBA offers its participants, which is based on close collaboration with diverse classmates and faculty, innovative learning methods and personalized feedback. It also highlighted the rich opportunities for networking, due to the global reach of IESE´s international alumni network of more than 50,000 executives across the globe.

IESE´s program also scored well for the post-graduate salary of its MBA alumni, and for the new career opportunities that are opened up for graduates after studying an IESE MBA. In fact, 96% of IESE´s MBA class of 2019 received a job offer within three months of graduation, according to MBA CSEA reporting standards. This reflects the work of the school´s Career Development Center, which organizes numerous activities, resources, support, career forums and fairs throughout the year for students.

Marc Badia, Associate Dean for MBA programs at IESE Business School, said:

“At IESE, our focus is on creating a transformational educational experience for students, one where they get stretched and challenged both in and outside the classroom. This result is a confirmation of our ability to maintain the highest standards across all aspects of our MBA. It takes a tremendous team effort to make the MBA so transformational for students, and it’s great to see that recognized.”

This is the fourth time that IESE´s MBA has been ranked no.1 in the world by The Economist. The result also follows a continued strong performance in other international rankings for IESE´s MBA and other programs in recent years, including being ranked no.1 in the world for a record sixth straight year by the Financial Times for Executive Education.

When IESE Business School launched its full-time MBA program in 1964, it was Europe’s first two-year MBA program. Since its inception, it has continually innovated. Today, the program offers students a unique international experience, with roughly 85% of the class coming from abroad. The curriculum also covers the latest business topics such as AI and big data, and allows students to customize the program further to their needs by earning a concentration in specific topics (such as Data Analytics & Digital Business or Entrepreneurship & Innovation) along with their MBA diploma.

IESE´s full-time MBA is taught in English from the school´s campus in Barcelona, with the option of completing the program in either 15 or 19 months, offering even greater flexibility and choice to participants.

Full information on The Economist’s WhichMBA? 2021 Full-time ranking.

More information on IESE’s latest rankings.


Employment Report 2020 shows power of IESE MBA to boost careers

  • Nearly 90% with employment three months after graduating; third of MBA Class of 2020 make ´triple jump´ career switch

December 21, 2020. A pandemic and resulting economic crisis may not seem an optimal time for anyone’s career prospects, let alone if you are trying to make an ambitious career change. Yet IESE MBAs continue to be highly sought after by recruiters worldwide.

Despite the massive disruption to recruiting caused by COVID-19 this year, 87% of IESE’s MBA Class of 2020 found employment within three months of graduation (as calculated according to the MBACSE rules.) What is more, a significant portion of the class used their MBA experience to make a substantial career switch this year.

A class of career changers

According to IESE’s 2020 MBA Employment Report, Europe was the most popular career destination for the Class of 2020, with 46% of graduates accepting jobs on the continent (26% in wider Europe, 20% in Spain.) Latin America (22%) and Asia-Pacific (20%) were the next most popular regions for alums.

In terms of sectors, consulting continues to reign supreme with around 33% of the class, followed by industry (29%), financial services (23%), and technology (15%.) Of those who chose consultancy, around 80% were career changers without prior experience in the sector.

And career change is a key theme for the class of 2020. About a third of the class made a notoriously difficult “triple jump” career switch this year – changing sector, function and geographic location all in one go. (An increase from 21% of the class last year.)

The figures highlight the power of an IESE MBA for those thinking of changing their career path. On the program, students have access to a dedicated careers center with expertise in different sectors and regions. They also are able to take a corporate internship between the first and second year, giving them a chance to test and try out different career options.

One such triple jumper is Rohit Gokul. With a background in engineering, he was an entrepreneur working in the United Arab Emirates prior to studying at IESE. He says the career support offered on the IESE MBA, including providing sector-specific and regional expertise, was key to landing his current position at Citigroup Corporate and Investment Bank in the U.K.

“Coming from a non-traditional background…I can confidently attest to the fact that the career services and Finance Club take all the credit for my successful transition into investment banking,” Gokul said. “Having closely worked with the Career Development Center, I have witnessed first-hand how the entire team goes the extra mile, making all the difference.”

Connecting recruiters with IESE MBA talent

In a year marked by uncertainty, the latest report shows the trust the world’s leading companies place in IESE for its recruiting needs. Around 300 companies currently recruit at IESE, including: 

A.T Kearney, ABInBev, Amazon, Bain, BCG, Citigroup, EY, Google, Johnson&Johnson, Mastercard, McKinsey, Michelin, Microsoft, Nike, Novartis, PepsiCo, Unicef, Werfen and ZS Associates.

Each year, IESE’s Career Development Center organizes numerous activities with these companies, offering structured recruiting opportunities as well as providing career guidance for students both before and during the MBA program, dedicated events, workshops and support, among others.

IESE’s MBA Class of 2020 counts 356 students of 55 different nationalities, with an average age of 31 at graduation.

Download the latest 2020 MBA Employment Report here.

Factory with air pollution

A way forward for reducing corporate carbon emissions?

  • New IESE research shows a strong link between the world´s largest asset managers’ engagements with companies and a reduction in CO2 emissions of their portfolio companies
  • Using new data, the paper “The Big Three and Corporate Carbon Emissions Around the World”, forthcoming in the Journal of Financial Economics, suggests company engagements by BlackRock, Vanguard and State Street can offer a complementary approach to tackling climate change

Climate change is one of the most pressing global issues we face as a society. While ´Big Business´ is frequently criticized for its role in increasing greenhouse emissions, in recent years leading corporate figures such as BlackRock CEO Larry Fink have publicly committed to focusing on environmental issues. Yet up until now, there has been scant data on whether these corporate efforts are starting to have any effect.

New research by IESE Business School professors, forthcoming in the Journal of Financial Economics, sheds light for the first time on the role that BlackRock, Vanguard and State Street Global Advisors (the so-called “Big Three” largest asset managers) are playing in reducing carbon emissions around the world. The Big Three have come to dominate the global corporate landscape in recent years. Significantly, the study´s findings suggest that the world´s largest asset managers are having a positive impact in reducing the CO2 emissions of their portfolio companies.

The Big Three and Corporate Carbon Emissions

The paperThe Big Three and Corporate Carbon Emissions Around the World”, accepted by the Journal of Financial Economics, is coauthored by IESE professors Jose Azar, Miguel Duro, Igor Kadach and Gaizka Ormazabal.

In the paper, the authors examine if: a), the Big Three are engaging with their portfolio companies on environmental concerns; and b), whether these engagements are actually effective in reducing carbon emissions at those companies. To do so, they analysed two novel datasets: carbon emissions data for a wide cross section of firms between 2005 to 2018, complemented with data on Big Three engagements with their portfolio companies. 

Unlike previous studies that look at institutional investors in general, the authors claim they focus only on the Big Three due to their unique characteristics and position in the global economy. Together the Big Three manage $16 trillion and control approximately 20% of the shares of the S&P 500. In addition, the authors focus on carbon emissions as opposed to environmental scores. According to them, this is important, “as changes to a firm´s environmental score could reflect “greenwashing” rather than actual environmental improvements.”

The key findings

The paper finds that:

  • The Big Three focus their engagement efforts on large firms with high CO2 emissions and in which these investors hold a significant stake.
  • Consistent with this engagement influence being effective, the study shows a strong and robust association between Big Three ownership and a subsequent drop in carbon emissions
  • This pattern becomes stronger in the later years of the sample period, when the three institutions have publicly committed to tackling environmental issues.

The paper also shows how, beyond altruistic reasons, there could be several economic incentives for the Big Three to engage with firms on environmental issues. One reason could be a belief that reducing CO2 emissions increases the value of their portfolio (reflecting a growing awareness of the financial implications of climate risk); another is that pushing firms to reduce carbon emissions can help attract or retain clients sensitive towards environmental concerns.

ESG engagement as a complement to carbon pricing

According to the authors, “one of the main conclusions of our research is that the Big Three, contrary to what many believe, have both the incentives and the means to get CO2 emissions reduced. And our empirical evidence suggests that, through engagement with their portfolio companies, they have already been playing a positive role in this important dimension of corporate governance.”

Still, they caution that the magnitude of these carbon reductions may not be enough on their own to tackle the climate challenge we face. As such, the authors stress that the research points to how the big three could contribute to reducing world carbon emissions, alongside other approaches already underway or under study, such as carbon pricing.

“Climate change is a major global problem which requires coordinated global action” say the authors. “That´s where the unique size and reach of the Big Three may help. While the Big Three´s importance to the global economy is controversial, their almost supranational status means that, when they engage with companies on environmental issues, they can avoid the global coordination issues that hinder the quick implementation of other full-scale regulatory solutions. In doing so, our research suggests that they can offer a complementary way of addressing climate change, alongside other efforts.”

Access the full paper The Big Three and Corporate Carbon Emissions Around the World.” 


About the authors:

Jose Azar is a Visiting Professor of Economics at IESE Business School and an Assistant professor at the University of Navarra. 

Miguel Duro is Assistant Professor of Accounting and Control and Academic Director of the Center for International Finance (CIF) at IESE Business School. 

Igor Kadach is Assistant Professor of Accounting and Control at IESE Business School. 

Gaizka Ormazabal is Associate Professor of Accounting and Control and holder of the Grupo Santander Chair of Financial Institutions and Corporate Governance, at IESE Business School. He also serves as academic director at the IESE Center for Corporate Governance. 

IESE Holds Europe´s Most Important Conference on Purpose

  • Three-day virtual event draws preeminent business executives and scholars including Former Unilver CEO Paul Polman and Nobel laureate Bengt Holmström

November 2, 2020. IESE Business School´s Center for Corporate Governance’s recently organized one of Europe´s most important conferences on corporate purpose, drawing around 2000 attendees from across the global business community. The conference ended on Friday after three days of debate on the link between purpose and governance and the best practices for both.

A trio of business leaders concluded the event, which was co-hosted by the European Corporate Governance Institute, with a discussion on the need to reemphasize the importance of the individual within a corporation and an organization’s ethical responsibility to the society surrounding it. Some of the key topics discussed included:

Purpose as an existential need

“When we talk about purpose, we’re talking about something that’s existential,” said José Viñals (Chairman, Standard Chartered) in a final session that considered how boards of directors can define and instill purpose. “This is about making organizations more human.” 

Baroness Denise Kingsmill (NED, Inditex and IAG) struck a similar chord. “It’s from the relationship with human capital that the upholding of corporate purpose takes place,” said Kingsmill, who’s also a member of the UK House of Lords.

“I think the next 10 years will be about acting, not about talking,” said Juvencio Maeztu (Deputy CEO and CFO of Ingka-IKEA).

Action is needed, he added, given the grave challenges currently facing the planet. “Building financial resilience is a precondition of creating sustainability.” 

While the IESE CCG conference’s six sessions included lively debate between prominent academics and executives regarding purpose and how to authentically pursue it, there was a consensus that the coronavirus pandemic and climate change were the key catalysts behind the current drive to do good while also doing well.

“The overwhelming reason why we have to bring ethics back into the picture is climate change,” said Professor Patrick Bolton (Columbia). “This is the biggest challenge that awaits us in the 21st century. What climate change and the pandemic teach us is that nature matters. And we have to take it seriously.” 

While the climate change crisis predates the pandemic, several speakers drew links between the two. “The COVID-19 crisis is just a symptom of our shortcomings. We cannot have healthy people on an unhealthy planet,” said Paul Polman (Founder, Imagine and Former CEO, Unilever).

The danger of inauthenticity

Despite agreement on the need for corporate purpose in the face of contemporary social and environmental crises, several speakers warned of the dangers of cheap talk, greenwashing and rushed, misguided action in response to public uproar amplified by social media.

“I’m worried about the court of public opinion being too extreme or too biased,” said Nobel Laureate Bengt Holmström (MIT), who also questioned how many companies would actually reduce shareholder benefits in order to do social good.

Professor Colin Mayer (Oxford) offered a franker appraisal of false purpose, beginning the conference by saying, “In many cases, corporate purpose statements are not just verbiage, but might also be described as twaddle.”

Yet his similarly blunt definition of authentic purpose as “not profiting by doing producing problems for the people of the planet” imagined an effective path forward.

Another recurring theme of the event was the connection between a fully formed purpose and better financial performance.

“It’s not an either/or between purpose and profits,” said Professor. Rebecca Henderson (Harvard Business School). “It’s a dynamic process.”

The conference, sponsored by the Social Trends Institute, featured panel moderators including journalist Henry Tricks (The Economist) and IESE Business School faculty members Mireia Giné, Joan Enric Ricart, Xavier Vives and CCG President Jordi Canals, who introduced and concluded each day of the conference with Marco Becht (Université libre de Bruxelles.) IESE CCG academic committee members John Almandoz and Fabrizio Ferraro moderated group discussions during the conference.