How a Course on Tough Tradeoffs Prepares Students to Lead in a Resource-Constrained World
In Natural Capital, students in a global classroom examine how water, energy, and other resource systems shape business decisions—and learn how to navigate the choices involved.
“You are Microsoft,” Todd Cort, senior lecturer in sustainability, tells his class as he introduces a case study on cobalt sourcing. “You need to decide what to do.”
Microsoft, like other tech companies, needs cobalt for the lithium-ion batteries that power phones and computers. Most cobalt comes from land-based mining, which has been linked to child labor, environmental damage, and economic inequality. Deep-sea mining could provide another source—but it presents a different set of environmental and social risks, which are not yet fully understood.
In the course Natural Capital: Risks and Opportunities in Global Resource Systems, Cort’s students weigh these options and the tradeoffs each one involves. How can the company secure the cobalt it needs while accounting for environmental and social impacts?
The Microsoft case is one of many business dilemmas students tackle in the course, which asks them to view the environment, business, and society as interconnected systems. Offered by Yale SOM virtually each year through the Global Network for Advanced Management (GNAM), Natural Capital brings together students from business schools around the world to study the resource systems that businesses depend on: materials, energy, food, water, climate, and natural areas. First, students are introduced to the pressures affecting each system. Then, they explore business implications through guest speakers, individual assignments, and case studies.
“There’s no one right answer,” says Cort, who also serves as faculty co-director for the Yale Center for Business and the Environment. “There are always tradeoffs and challenges associated with any solution. I want them to see that.”
In an energy module, students examine how a green bank can attract capital for clean energy projects. Later, in other modules, they consider how an energy company should balance investments in renewable power and fossil fuels and how a coffee supply chain might become more resilient. A series of case studies shows how business decisions are shaped by, and can reshape, ecosystems and communities.
Cort compares this dynamic to the experience of sitting on a waterbed. “If you push on one thing to try and solve it, then the rest of the system adjusts as a result, and you can make something else worse or better,” he says. A decision to reduce emissions, for example, may increase water use or affect local employment.
While business decisions often involve social or environmental ramifications, students in the course also study how macroeconomic trends shape natural capital and, in turn, business conditions. For example, as the global consumer class grows, more people are buying more goods, including resource-intensive ones. Increased demand for meat puts stress on land, water, and other resources. The constraints that result can contribute to supply chain disruptions and increased costs.
Cecilia Shutters ’23, a graduate of the MBA for Executives program, sees this systems perspective—recognizing tradeoffs, feedback loops, and dependencies across sectors—as her biggest takeaway from the course. “Natural Capital reinforced that environmental, social, and economic outcomes cannot be separated,” she says.
Shutters, now head of sustainability at Revlon, says this insight has shaped how she approaches her work: “It gave me a more integrated perspective when evaluating projects, strategies, or investments, and helped me communicate the importance of ecosystem services in business and policy conversations.”
Because it’s a virtual course, Natural Capital is open to students from GNAM institutions around the world. The range of backgrounds and professional experiences represented among participants prepares students for the global teamwork that natural-capital challenges require. “We can’t all work in isolation on the same problems and get to the right solution,” Cort says.
For Shutters, working with peers from other countries highlighted how natural capital challenges and opportunities are shaped by local contexts. “Hearing perspectives from different regions made the interdependencies even more tangible and reinforced that solutions must be both locally informed and globally aware,” she says.
In one case study, students consider whether a U.S. model that generates revenue from protected land could work in another country. In small teams, they select a country—typically one represented by a team member—and examine its market conditions and regulations.
“Everyone gets to learn about the context that somebody else is living in,” Cort says. “To achieve that level of understanding, even around one problem, is a very strong value of the Global Network.”
In class, Cort emphasizes the business case for sustainability. He points to the trillions of dollars in annual investment that the energy transition will require, as well as studies showing that companies tend to be more competitive and profitable when they address environmental risks.
He wants students to leave the course—and business school—with the tools to incorporate environmental considerations into decisions about investment, operations, and strategy.
“It’s a big challenge,” Cort tells his students. “Go figure out how to translate it into short-term action. You have this class to do it and then your entire career to do it.”
