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Business Officer Magazine

Financial Climate Change

Pending legislation would impose a number of new accounting and financial requirements on college and university clean-energy projects. Two new books from NACUBO provide guidance on leveraging sustainability activities, assessing their risk and cost, and understanding financing options available for such projects.

Introduction by Joe Grasso

*Last June, the U.S. House of Representatives passed the American Clean Energy and Security Act of 2009 (HR 2454), which calls for power-producing entities—including most of the 4,000 higher education institutions in the United States—to internalize the cost of carbon by adhering to a cap-and-trade system. If the House and Senate can agree on this legislation and it is signed into law, higher education will be transitioning from what has been a voluntary goodwill program to a mandatory compliance regime.

Once this legislation is enacted, those colleges and universities that are emitting greenhouse gases will likely have to record new liabilities on their balance sheets. Others that are net producers of renewable energy credits may find themselves recognizing new revenues and new assets. Those institutions that are buying or selling emission allowances may be subject to accounting for vintage year swaps—if only the “vintage” referred to cabernet rather than carbon! The Financial Accounting Standards Board (FASB) currently has a project on its agenda to provide comprehensive guidance on these accounting issues.

In addition to financial statement issues, a wide range of new tools is available to us for financing clean energy projects, such as clean renewable energy bonds, or CREBs. There are also a number of expanded tax credit options along with third-party finance, installation, and ownership arrangements. Our institutions' bond ratings may be altered by the liabilities on our balance sheets, and our investment committees may shift their investments based on the added cost of compliance in certain industries. We will also need to be aware of new philanthropic opportunities related to sustainability, which can help offset some of the cost of clean energy and efficiency projects.

Two recent NACUBO publications, Boldly Sustainable: Hope and Opportunity for Higher Education in the Age of Climate Change and Financing Sustainability on Campus, provide the business officer with clear guidance in a world of climate-related change. Boldly Sustainable presents the case for higher education to embrace sustainability efforts and leverage them for various purposes. Written in partnership with Second Nature Inc., Financing Sustainability on Campus presents a comprehensive framework for assessing the risks and costs we will likely face with the new legislation. It also delves into the details of financing clean-energy projects, whether it be through creating revolving loan funds, purchasing carbon offsets, monetizing renewable energy credits, or adopting other financing methods. With these tools provided by NACUBO, I hope we can convert this challenge to an opportunity, reduce our energy costs, minimize our environmental liabilities, and sustain financial and environmental equilibrium.

JOE GRASSO is assistant dean for finance and administration, Cornell University, Ithaca, New York, and chair of NACUBO's Sustainability Advisory Panel.

New Titles Teach Energy Technicalities

With pending legislation that can literally change voluntary sustainability efforts to forced compliance issues overnight, NACUBO introduces two new books to instruct institution leaders in proper and practical responses.

Take a Stand for Sustainability

Boldly SustainableBoldly Sustainable: Hope and Opportunity for Higher Education in the Age of Climate Change examines how colleges and universities can leverage their commitment to sustainability. By doing so, they can not only save money and have a positive impact on the environment, but also carve out a distinctive niche in the marketplace. Citing real-world examples of innovative solutions in higher education, Peter Bardaglio and Andrea Putman illustrate how building a culture of sustainability through creative leadership, offering a signature curriculum, connecting the classroom and campus operations, and reaching out to the surrounding community can help institutions to distinguish themselves from the pack, bolster their value proposition, and enhance organizational effectiveness. They make the case that sustainability makes sense even in tough economic times. Geared to both newcomers and experienced practitioners, this book provides path-breaking concepts, strategies, and tools that produce a sharper vision, an energized mission, and a firmer footing in the marketplace.

The book is $39.95 for NACUBO members and $50 for nonmembers. To order, go to phone 800.462.4916.

Finding Funds for Energy Efficiency

Financing Sustainability on CampusTo shatter the myth of “funding first, operational change second,” Ben Barlow, with guidance from Andrea Putman, provides higher education leaders with the comprehensive handbook Financing Sustainability on Campus. Real-world examples and creative strategies are coupled with clear explanations of a wide variety of financial tools and programs.

This book, written in partnership with Second Nature Inc., offers a first-of-its-kind look at how leading-edge colleges and universities are responding to the challenges of financing sustainability efforts. How can institutions blend financing options? How can a campus utilize a tax-exempt lease purchase contract? What tax incentives are available? When is bond financing your best option? What new liabilities will institutions need to recognize on their balance sheets? Geared to both newcomers and experienced practitioners, this guide walks you through the process—from identifying and analyzing the economics of proposed projects to execution—with examples from numerous individual campuses.

The publication is available in two formats—as a soft-cover book for $49.95 for NACUBO members and $75 for nonmembers and as an e-book for $35 for NACUBO members and $50 for nonmembers. To order, go to or phone 800.462.4916. A Kindle version is also planned.

Read excerpts from Boldly Sustainable: Hope and Opportunity for Higher Education in the Age of Climate Change and Financing Sustainability on Campus.