by Mitchell Thomashow
ThomasNet Green & Clean Guest Columnist
Director, Second Nature Presidential Fellows Program

Mitchell Thomashow of Second Nature

If you want some green-infused inspiration, check out what’s happening on college campuses across North America. There are three extraordinary organizations that are having a major impact on sustainability, energy efficiency, and climate action planning.

One important example is Second Nature, which organizes the ACUPCC (American College and University Presidents’ Climate Commitment), a peer-reviewed, executive approach that pledges its 670 (and growing) signatories to a rigorous climate action planning process. Another is AASHE (Association for the Advancement of Sustainability in Higher Education), which puts on a major annual sustainability conference and oversees the STARS (Sustainability Tracking, Assessment and Rating System) program, a way for college campuses to quantify their sustainability initiatives.

And if you aren’t already overwhelmed by all of these acronyms, get ready for a couple more! The Sustainable Endowments Institute (SEI) has just launched the Billion Dollar Green Challenge (BDGC). This is a uniquely innovative campus-based green revolving-fund investment program; it supports the work of both Second Nature and AASHE.

The Billion Dollar Green Challenge is of great interest to any organization or company that owns buildings and is seeking to save energy and money. It is a savvy way to maximize returns on investment while improving existing building infrastructure. Hence its relevance not only for college campuses, but for any campus-based organization, from health care facilities to residential complexes. It literally capitalizes on energy savings to promote an entire catalog of potential campus improvements, linked to bottom-line savings, innovative investments, and cross-sector partnerships.

In many ways, the campus sustainability movement is a wonderful model for market-based green entrepreneurship, innovation, and grass-roots organizing. Many of the most interesting ideas for infrastructure improvement, clean energy research, and educational programs have come from students, staff, and faculty. Savvy and visionary executives know how to tap that expertise. But make no mistake, the most exciting “green” ideas emerge from the innovative, experimental, experiential, problem-solving spirit of campus sustainability programs. (Photo: Arizona State University is installing solar panels across its campus. Credit: Kevin Dooley, CC BY 2.0)

The Billion Dollar Green Challenge is maximizing the potential of that entrepreneurial energy. Here’s how. Over the last five years, but stretching back in some cases to the 1990s, over fifty colleges and universities have established green revolving funds to finance campus-based sustainability initiatives. This includes the California Institute of Technology’s Energy Conservation Investment Program, Harvard University’s Green Loan Fund, Stanford University’s suite of programs, as well as programs at small institutions like Unity College in Maine and Green Mountain College in Vermont. These fifty schools range from very well endowed institutions with copious resources, to state colleges and universities whose budgets are approved by legislatures, to smaller, resource-strapped colleges whose revenue is derived almost exclusively from enrollments.

The money for these funds comes from a variety of sources — administrative budgets, student green fees, endowment investments, utility rebates, and donations. Essentially these funds are used to finance a variety of sustainability projects on campus. Projects range in scope from quick payback investments such as lighting fixtures in a residence hall or installing composting equipment, to more systemic projects like comprehensive energy retrofits or investments in alternative energy sources. The money saved in the utilities budget by the implementation of these projects is then returned to the loan fund, allowing the money to be reinvested in the next round of projects. The main challenge for each campus is to determine where the start-up capital will come from, and then to develop the procedures and protocols for determining how the money will get used and reinvested.

Here’s the bottom line! Schools have reported average payback periods ranging from one to ten years, with a median of four years. After these loans are repaid, additional savings accrue to the school’s operating budget. College executives, most particularly CFOs and Board of Trustees finance committees, will be pleased to know that Green Revolving Funds (GRFs) provide reliable returns on investment ranging from 29 to 47 percent with a median of 32 percent. Even the most sophisticated endowment managers will have a hard time matching those returns.

The Billion Dollar Green Challenge is an effort to maximize these efficiencies and innovations through a nationwide campus coordination effort. Its bold “Billion Dollar” aspiration is not as audacious as it might first appear. Their preliminary research indicates that college endowments can easily generate the sufficient start-up capital. Indeed, the Founding Circle of BDGC members includes 32 colleges and universities that have either committed or already established green revolving funds with a combined total of $65 million. For a full list of these colleges and brief profiles, check out the BDGC website.

This coordination is based in several projects that provide expertise and support. It’s worth mentioning all of them here. For starters, check out the capstone report, “Greening the Bottom Line: The Trend toward Green Revolving Funds on Campus.” Once you’re at the website you can download some very helpful case studies of exemplary GRFs. Most important is what’s forthcoming. A “Green Revolving Fund Investment Primer” is set for December 2011 publication. Shortly thereafter comes “The GRF Implementation Guide: Step-by-Step Strategies for Financing Energy Efficiency.”

Ultimately the most useful service will be the Green Revolving Investment Tracking System (GRITS), a web-based platform providing real-time comparative data on performance of GRFs at participating institutions. This best-practices approach epitomizes the collaborative power of GRFs. The main stumbling block regarding sustainability initiatives is almost always the lack of financial capital for new projects.

The GRF program with its technical support is designed to provide the shared experience, expertise, and know-how to overcome any such obstacles. GRFs are an outstanding way to build collaborative partnerships between colleges, businesses, and communities. As campuses usher in a new era of green research, innovations, and investments, they can catalyze green community development. Towns and cities have similar infrastructure challenges. Businesses have ready-made markets for green products and processes. Together they can create an economy of scale for investments, workforce development, and sustainable entrepreneurship. Further, such partnerships allow for dynamic, profit-based capital investments. It will be of great benefit to campuses nationwide if they can share their experiences, compare financial tools, better understand returns on investment, and optimize their innovative technological solutions.

There are major curricular implications as well. Students, staff, and faculty who administer and implement GRFs get an instant, hands-on lesson in business planning, infrastructure development, and community engagement. It’s a terrific way to get business schools directly involved in the financial challenges of their campuses and communities.

The Billion Dollar Green Challenge will be a catalyst for campus sustainability initiatives, and perhaps the transformation of college campuses. We should watch its progress carefully as it may open paths that will be of great interest way beyond higher education.

About Mitchell Thomashow:

Dr. Mitchell Thomashow is director of the Presidential Fellows program at Second Nature, a non-profit organization dedicated to supporting higher education leaders in sustainability efforts. Previously he served as president of Unity College in Maine and at Antioch University New England as chair of the Doctoral Program in Environmental Studies and associate dean for institutional advancement. He is author of Bringing the Biosphere Home: Learning to Perceive Global Environmental Change (2003) and Ecological Identity: Becoming a Reflective Environmentalist (1996).

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