The Payoffs of Planet-Friendly Initiatives
More campuses are pursuing socially and environmentally responsible programs, underscoring the value of measuring sustainability impacts.
By Dave Newport and Larry Litten
On the other hand, college and university business officers increasingly want to know whether they are getting the sustainability results they do pay for. Sustainability involves decision making that integrates environmental, social, and economic opportunities across campus and within the broader community. These can range from green facilities to enhanced recycling to student-led energy initiatives that cut costs.
Today, many more institutional stakeholders—current and prospective students, donors, and trustees—are looking for strong sustainability programs on campus. While measuring sustainability is not easy, a growing number of institutions are attempting to quantify the added value of their initiatives using a campus sustainability assessment (CSA) to develop benchmarks and chart progress across time.
Historically, many CSAs were published by non-administrative campus groups seeking action by college or university administrations. Now these assessments are increasingly championed by forward-thinking business officers to guide strategic planning and implementation. Because sustainability metrics provide the rationale for work on a variety of campus programs that either save money, make money, or rally constituencies around sound long-term institutional well-being, CSAs present business officers with opportunities to add substantial value to campus operations and enhance the value of their sustainability dollar (see sidebar, “Quantifiable Commitment”).
Paybacks on campus sustainability initiatives range from direct income or cost savings to more strategic advantages consistent with the educational missions and core business values of colleges and universities.
Accountability. Many college and university trustees have deep roots in the business world, where increased sustainability reporting and transparency are becoming the norm—and in some countries, a requirement. As such, campus governance is increasingly asking “green” questions and is growing attuned to the need for sustainability reporting. In one example, former University of Florida President Charles Young, a member of Intel’s board of directors, commented during discussions about UF’s CSA that he was fully aware of the need for transparency because of discussions Intel’s board had on this issue. Assessments of sustainability initiatives can inform and quantify institutional response to sustainability-related inquiries from trustees and other campus stakeholders.
Meanwhile, a European Union proposal (the EU Transparency Initiative), currently being floated for comment, may increase sustainability-related requirements for public institutions across Europe. Expectations for increased reporting requirements by U.S. colleges and universities could follow.
Physical plant. At Pennsylvania State University, CSA metrics involving the university’s carbon emissions provided a wake-up call that translated into increases in physical plant budgets for deferred maintenance projects with high returns on investment that had been overlooked. Among those activities was recommissioning existing buildings. Improvement costs totaling about $742,000 resulted in annual energy cost savings of approximately $196,000, representing a 3.8-year payback. Funding was also made available for physical plant staff to improve waste reduction and recycling, repair steam traps, improve mechanical systems with controls, and enhance training of maintenance crews. The university also committed to purchasing at least 7 percent of its energy from green sources.
Operating costs. CSAs provide quantitative feedback on achievements that keep facility managers focused on operational savings long after construction is completed. The University of British Columbia uses its CSA to motivate hundreds of student sustainability coordinators who manage dorms and other facilities and who mobilize student efforts toward more sustainable behaviors, such as turning off lights and computers. The CSA is also used to track operational savings—now totaling more than $7 million since April 1999—by calculating tons of greenhouse gas emissions reduced as well as sheets of paper, kilowatt hours of electricity, and liters of water saved. The university updates both consumption and savings of these resources in real time on its Sustainability Office Web site (see sidebar, “Follow the Leaders”).
Community outreach. CSAs help connect the concepts of sustainability to the real needs of people. For instance, some universities donate to charities the proceeds of their collected recycled materials, thereby winning new friends in their communities. Similarly, a program at UF designed to motivate long-term energy conservation has won support from fraternities and sororities that are pledging saved dollars to social service programs.
Management. The process of compiling a CSA requires increased sharing of data, policy, and planning information across otherwise isolated organizational units, yielding management efficiencies and risk reduction.
Finances. The enhanced coordination stimulated by sustainability reporting may have a measurably positive effect in an unexpected area: credit ratings. A recent survey by the international consulting group SustainAbility examined the S&P credit rating of companies with exemplary sustainability reports. The result showed the average rating was A- for the leading sustainability reporting firms compared with the average credit rating of B- for companies in general. In fact, the sustainability business model is seen as profitable enough that for five years Dow Jones has traded the best-in-class corporate sustainability leaders in a discrete index, the Dow Jones Sustainability Index. This index (www.sustainability-indexes.com) has consistently outperformed the Dow Jones World Index.
One obvious implication for campus business officers is the need to understand the degree to which university investors—donors, alumni, grant patrons, current and prospective students, governments, and so forth—are increasingly making investment decisions based on perceptions about an institution’s sustainability commitments.
Stakeholder relations. Quantifying the sustainability-related attributes of construction projects, facilities management, fleets, and energy projects gives all stakeholders reason to be proud. And that source of pride can have a lasting impact on others. For example, as they woo prospective students, more campus tour guides are now touting the “greenness” of dorms and pointing out how much wind or geothermal energy their institutions are buying.
|While no uniform how-to guide exists for higher education sustainability reporting, three ongoing projects offer resources for business officers and others leading campus sustainability initiatives.
Other groups active in sustainability assessment and reporting initiatives include
Development. Training university development personnel how to communicate a sustainability message can yield support for related projects. Arizona State University recently received a $15 million gift from one of its foundation board members for an international sustainability institute. ASU promptly rolled out a two-year plan to become the world’s first university with a school fully dedicated to research, education, and solutions to real-world sustainability issues. Many other universities have won support for smaller sustainability programs and projects.
Research. Several years ago MIT, the University of Tokyo, and the Swiss Federal Institute partnered with the World Business Council for Sustainable Development, an emerging global business group devoted to sustainability. The result was millions of dollars in corporate-funded sustainability research pipelined to the alliance institutions. Universities with sustainability-related resources have similar chances to become go-to sources for public and private organizations within their circles of influence.
Leadership. Perhaps most important, CSAs provide an opening to articulate the language, create the literacy, and demonstrate leadership in an emerging global issue—with substantial immediate and long-term benefits to an institution. When UF’s president and faculty senate articulated a mission to “become a global leader in sustainability,” that inspired considerable activity, planning, and external recognition. At many other universities, leadership initiatives more profound than Florida’s have increased the standing of those institutions among their peers while also lowering operating costs and unifying broad campus and community constituencies around a shared sustainability agenda.
According to CorporateRegister.com, more than 1,500 sustainability reports are published annually by corporations worldwide, across all industry sectors. Sustainability reporting among the more than 4,100 North American institutions of higher education has been slower to develop, but it is gaining ground. Researchers for the Campus Sustainability Assessment Project, a clearinghouse of campus sustainability assessments, estimate that as many as 250 new CSAs of widely varying depth and focus are being produced each year by North American colleges and universities.
|Follow the Leaders|
Many colleges and universities are breaking new ground in sustainability initiatives. Here are several varying examples of sustainability leaders within higher education.
While the corporate sector is arguably well ahead of higher education on the reporting front, corporations also have been under much greater public pressure to confront issues of sustainability. Corporate sustainability reporting in the United States emerged during the early 1990s largely in response to a growing number of socially responsible investors asking for greater disclosure of the environmental, social, and fiscal performance of corporations.
The de facto standard reporting format adopted by the corporate world—the Global Reporting Initiative (GRI) guidelines (www.globalreporting.org)—prescribes specific statements of organizational policy and governance along with indicators and metrics related to social, financial, and environmental performance. These guidelines also provide a broad base of credibility and induce a stakeholder inclusion process as a crucial element.
Unlike the GRI standard, which allows for ready benchmarking, higher education’s approach is still largely fragmented. At least 11 reporting formats exist. Accordingly, most of the 1,200-plus CSAs published by North American colleges and universities since the early 1990s include ad hoc metrics and formats. Intercollegiate benchmarking suffers as a result.
Even so, individual institutions have forged ahead. In 2001, UF published the first CSA compiled to the GRI standard. Dartmouth College has written a guide to adapting the GRI to higher education. Several other institutions have loosely complied with its tenets, and more are doing so. An ad hoc international working group of sustainability reporting practitioners that UF and Dartmouth helped form has made some progress toward codifying a GRI standard for higher education (see www.sustainable.ufl.edu). Interest in that standard has increased recently, and a GRI higher education standard could be ratified as early as 2007.
One benefit of publishing a sustainability assessment according to the standard adopted by business is that it allows a college or university to begin conversations with corporate contacts using a common vocabulary. This helped UF win new support from at least one corporation looking for sustainability-related services. And with sustainability high on their agendas, corporations will continue looking for related expertise from campuses.
Ultimately a CSA is about value, not cost. A CSA is not free, however. In the corporate world, sustainability assessments routinely cost upwards of $50,000 per report. Higher education reporting appears more economical. At UF, for instance, two individuals produced a GRI report for a combined one-half FTE during the course of a year, with modest printing and distribution costs for a paper version. Dartmouth’s GRI evaluation project was in line with UF’s experience, with estimates ranging from 310 to 670 hours of staff time to produce GRI reports of varying complexity.
Sustainability reporting is about making known to all stakeholders your institution’s commitment to and progress on key economic, environmental, social, and education-related concerns. While a comprehensive campus sustainability assessment will include statements and measurements related to those four areas, a more focused CSA may address only one or two. Additionally, CSAs can cover organizationwide metrics or those associated with only certain facilities or groups of facilities.
CSAs are more valuable as strategic documents coupled with high-level planning than as routine reports that add to workload and show only incremental changes. A five-year cycle typically provides meaningful assessment. The best CSAs also benchmark against strategic goals and are sufficiently longitudinal to illustrate trends.
Accordingly, one hallmark of a good CSA is an upfront statement from an institution’s president outlining goals and specific commitments to sustainability-related principles and practices. Similar statements of management policies and principles along with basic institutional facts accompany the president’s statement, followed by performance indicators for the chosen categories.
Economic metrics typically come from existing annual reports on revenues, research awards, payroll, total expenditures, and so forth. Specific measurements may include income (especially net of financial aid); expenditures (especially in relation to income); debt levels; efficient and effective use of resources to achieve mission components (cost-benefit ratios); economic impacts on local communities and society; and employee productivity and morale.
Environmental metrics usually are extracted from environmental health and safety reports on hazardous materials uses and other existing administrative reports detailing solid waste disposal and recycling, energy use, various water-use statistics, and so forth. Specific measurements may include use of renewable versus nonrenewable or sustainably harvested resources, emissions or pollution levels (regulated and otherwise), efficient resource use (especially the reuse of waste), and natural habitat preservation.
Social metrics include labor relations issues, employee training and retention, diversity issues, community service statistics, campus crime rates, and so forth. Specific measurements may include equitable salary and wage structures, nondiscriminatory practices, employee and student health protections, social and cultural benefits and impacts on the community, and community support levels.
Education-related metrics may include graduation rates, student inclusion (demographics), student learning and development, student satisfaction, sustainability-related coursework and research, research activity and effectiveness, faculty development opportunities, and outreach activities. (Some CSAs combine social and education-related metrics.)
Two other points about CSAs are worth bearing in mind. First, allowing stakeholders to help define the scope of the report bonds the strength of diverse campus constituencies and boosts the effectiveness of a shared sustainability focus. Second, while data collection can be daunting the first time through, it will get easier as staff take pride in quality outcomes. An institution’s first report need not cover everything. Plan for incremental improvement of the breadth and quality of your reports across time, refining metrics in subsequent reporting projects.
While CSA practitioners work to evolve a standard format for higher education, institution-specific CSAs still present significant possibilities for tactical and strategic enhancements to an organization’s operations and performance. As business officers look to student organizations, community interests, faculty, and staff for participation in a diverse working group, excellent resources are available to guide campus sustainability assessments (see sidebar, “Reporting Resources”).
Sustainability As Opportunity
At least two emerging trends indicate that business officers see the merit of adding value with campus sustainability initiatives. In the five years since the U.S. Green Building Council launched its Leadership in Energy and Environmental Design standard for new construction and major renovations, the higher education community in the United States has built 256 projects totaling more than 23.2 million square feet in accordance with the standard. Similarly, student-led green energy initiatives at more than 50 institutions and within at least three state university systems have resulted in significant campus commitments for green power purchases.
Sustainability as an ethic and as a business practice has clearly matured in recent years. Sustainability historically was pitched as a moral responsibility to be wise stewards of the planet. Yet, as sustainability practitioners note, a motivation of responsibility propels an organization only so far toward creating value. Motivated solely by responsibility, organizations may dutifully minimize wastes and use resources more efficiently, but this is akin to eliminating organizational activities that don’t create value in the first place.
Once opportunity becomes the sustainability watchword, significant organizational advances can follow. That approach now powers Procter and Gamble, Dupont, and other corporate leaders toward sustainable practices internally and guides the creation of new products and services that advance sustainability within society. Both dimensions of sustainability add profit to their bottom lines. And as their understanding of sustainability matures, leading corporations are moving beyond invoking sustainability as risk-reduction and public relations activities to incorporating sustainability into core business practices.
Higher education has this same opportunity. How much and how well colleges and universities are integrating sustainability concepts and practices is likely to get greater attention thanks to the March 2005 launch of the United Nations Decade of Education for Sustainable Development.
One certainty regarding campus sustainability is that institutions will see and hear much more about it in the years to come. As demands for assessing and measuring sustainability increase, so do the benefits of responding. For institutions that understand sustainability’s enduring value, time and effort spent developing a good CSA can help reduce operational costs, identify new outreach and development possibilities, galvanize stakeholder participation, and leverage institutional leadership on an emerging world stage.
Author Bios Dave Newport is director of the Office of Sustainability for the University of Florida College of Design, Construction and Planning, Gainesville. Larry Litten is director of institutional research at Dartmouth College, Hanover, New Hampshire.
E-mail email@example.com; firstname.lastname@example.org
- NACUBO Expresses Concerns with ED Proposal to Expand Federal Financial Responsibility Rules
- IRS Proposes Modifications to 1098-T Reporting
- ED Policy to Require Annual Student Aid Compliance Audits Beginning FY17
- 2016 Intermediate Accounting and Reporting Fall
October 24-25, 2016
- ON-DEMAND: The CBO's Role in Diversity and Inclusion on Campus
- ON-DEMAND: The Clery Act: Strategic Planning to Mitigate Institutional Risk
- ON-DEMAND: Title IX: Key Issues Surrounding Institutional Compliance
- ON-DEMAND: NACUBO Live! Higher Education Accounting Forum
- ON-DEMAND: Responsibility Center Management: Two Different Perspectives