By Cho Jin-seo
Staff Reporter
The Korea Advanced Institute of Science and Technology (KAIST) and Korea University will get state funding to start MBA programs with focus on "green" financial products and services, such as new-energy investment funds and carbon-credit trading.
The so-called "Green MBA" is part of the Lee Myung-bak administration's plan to foster the "Green Finance" sector as part of the green growth in the economy. Despite the noble intention, the curricula look so dubious that questions arise about what "green"really means here and whether they really deserve the taxpayers' money.
The Financial Services Commission (FSC) said Monday that the two universities were chosen to get 500 million won and 400 million won in subsidies this year, respectively, for launching Green MBA (master of business administration) majors this fall. The subsidy can be renewed next year if they pass the FSC's audit next January.
Students enrolled in these courses will have to select five to six subjects on environment-related industries and studies, such as "Green Finance Valuation," "Green Derivatives" and "Carbon Trading - Case Study." They are not very different from traditional MBA subjects except for the introduction of the word "green."
The FSC official said these courses will make the two institutions global role models in the teaching of environmentally responsible finance.
"We want to educate global leaders. The majority of the courses will be taught in English, and the program will invite students from developing nations as well," said an official at the FSC's international affairs department.
The FSC said most of the courses will be about corporate finance and investment issues in new energy, recycling and other eco-friendly industries. But it does not explain how the "green" courses will differ from traditional MBA subjects in essence and how they will assess their usefulness.
In practice, financial theories and techniques used in green and non-green sectors are not much different. Investment funds specialized in new-energy firms are operated in very much the same way funds investing in traditional energy sectors are run and the same financial theories and techniques are used. It is also difficult to define what a "green" business actually is.
The Green MBA initiative stemmed from the President Lee's initiative for "low-carbon green growth," which was announced in 2008. Last year the FSC echoed the president's call with the "green finance" scheme.
In the beginning, many analysts such as Noh Hee-jin, senior research fellow of the Korea Capital Market Institute, thought that the FSC would come up with fundamental changes in corporate environmental disclosure rules, fiduciary duties for board directors on the environment, and accounting standards on environmental issues to ensure sustainable and green growth for the economy. But so far, efforts are mostly made on the "growth" part of the slogan, such as how to make money from investing and trading in the new energy sector.
For the Green MBA fund, KAIST and Korea University beat Hanyang and Chung-Ang universities. The FSC said there was a big gap between the top two and bottom two schools in the quality of their presentations.
This suggests that not many schools were seriously interested in applying to the fund, except KAIST, a state-owned school, and Korea University, the alma mater of President Lee.
The evaluation was conducted by a panel of 13 advisors selected by various government agencies and organizations.