Oct. 24, 2007

Progress Seen in College Sustainability

Less than a year after releasing its first College Sustainability Report Card, which measured campus greening efforts and related endowment practices, the group behind the report is out with another edition that evaluates twice the number of institutions and offers a generally positive assessment.

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The Sustainable Endowments Institute looked at the 200 colleges with the largest endowments in the United States and Canada, as measured by 2006 data from the National Association of College and University Business Officers. (More than half the institutions provided endowment data that will appear in the 2007 NACUBO survey, and those that did are noted in the sustainability report.)

Campuses are given a letter grade in each of eight categories — food and recycling, administration, green building, transportation, climate change and energy, investment priorities, shareholder engagement and endowment transparency — as well as an overall grade. The institute, which relies heavily on colleges’ self-reporting and public data, is aiming to show the correlation between an institution’s environmental practices and its investment decisions.

Much like in the first report, colleges this time generally fare better in the categories relating to green practices (building, recycling, etc.) than in those that measure shareholder voting procedures and willingness to share information about the use of endowment money. Just over 100 “F” grades were given out in five campus practices categories collectively, but what the report calls a “widespread lack of endowment sustainability activity” led to 131 flunking marks in shareholder engagement and 116 in endowment transparency.

Over all, the report says progress is being made – a conclusion also reached by the Association for the Advancement of Sustainability in Higher Education in its recent report on campus environmental action. In the latest institute survey, more than two of every three colleges improved their total grade over the previous year, and higher education’s overall mark improved from a C to a C+. Among the reasons why, according to the report:

• Colleges are committed to reducing their carbon footprint. Roughly half of the institutions surveyed have pledged to reduce emissions. Many have done so through the American College and University Presidents Climate Commitment.
• The percentage of colleges with green building policies rose from 48 to 69 percent.
• Many are adding hybrid or electric vehicles; and biodiesel fuel is made and/or used at 3 of every 10 institutions.
• Colleges fared best in the food and recycling category — with nearly 3 in 10 earning “A’s.” Purchasing locally grown food was among the actions rewarded.

“We could tell there were early signs of progress, but it’s encouraging and remarkable that about two-thirds of colleges have improved their overall grade, because several categories were made more difficult,” said Mark Orlowski, founder and executive director of the institute.

For instance, in the climate change and energy category, the report took into account whether colleges made carbon reduction pledges, whereas the previous version put little emphasis on that — in part, Orlowski said, because few colleges in the sample had begun to take that action. Therefore, a college that didn’t promise a carbon reduction but wasn’t penalized last year could lose points this year for essentially being inactive.

In all, about 10 percent of colleges saw lower scores than in the last report, in part because of the addition of the transportation category.

The top grade earners over all, each of which received an A-, are Harvard University, Dartmouth College, Middlebury College, Carleton College, the University of Vermont and the University of Washington.

Vermont earned high marks not only for signing the climate commitment but for actions such as running some campus shuttles on biodiesel and switching much of its fleet to natural gas. Since 1996, the university has assembled an environmental council made up of students, faculty, staff and community members that advises the president and other top administrators on energy purchases and other green initiatives.

Students in residence halls are paid to organize sustainability projects. The campus also has a full-time environmental coordinator, Gioia Thompson, who helps connect council members to university officials.

“If it were just me, I couldn’t possibly make everything happen,” she said. “All this goes on because of grassroots organizing and without a lot of money.”

The report says more than one in three colleges now has a full-time staff member dedicated to sustainability. When Thompson took the position in 1996, she said only a handful of other colleges had what equated to her position, and now she estimates that number to be in the hundreds.

Another major area of improvement, the report notes, is in the category of endowment investments — which takes into account prioritizing return on investment, investing in community development loan funds and investing in renewable energy funds.

Measuring only the 100 colleges included in the first report, the percentage of institutions with endowment investments in renewable energy funds, or similar investment opportunities, more than tripled, from 9 to 31 percent. In large part because of these investments, 38 percent of colleges received “A” grades in the investment priority category, as opposed to 13 from a year ago.

Looking at all 200 colleges, 19 percent report having endowment investments in renewable energy funds, and an additional 17 percent report exploring endowment investments in this area.

But the report notes that shareholder engagement and endowment transparency are still lagging. The engagement category measures how colleges conduct shareholder proxy voting, noting that about one in eight colleges has an advisory committee or shareholder responsibility committee, and 13 percent have a committee of several stake holders (students, faculty, staff) to inform trustees’ moves on shareholder proxy resolutions.

More than half of the institutions received a flunking grade in endowment transparency, which looks at how colleges control information about the investment holdings of their endowments. About one in four colleges makes its list of endowment holdings available to the campus, a modest improvement over the previous report’s findings, Orlowski said.

“We’re seeing progress, but we aren’t seeing the same jump in level of activity as we are seeing on the campus side,” he said. “It’s not all that surprising, because while colleges are dedicating more and more people to campus sustainability, I can count on one hand the dedicated staff for sustainable endowment and shareholder responsibility issues.”

College policies vary on how or if they make public information on endowment holdings. The public universities lauded in the report largely were located in states that have open records laws.

Matt Hamill, senior vice president of advocacy and issue analysis at NACUBO, said this is an area where expectations and market practices collide. For investment managers, he said, whether they are working on a college endowment or a mutual fund, the general practice is not to disclose investment strategies that can benefit a competitor.

Both Hamill and Thompson, the Vermont coordinator, said the report sheds light on important sustainability categories, and has furthered the conversation about what it takes to be green.

But Thompson also says the report has its limitations — most notably an ability to track the actual performance and outcomes of some campus efforts. “Having more [green] programs doesn’t necessarily mean you’re doing a good job,” she said. It can, for instance, indicate that a college had a long way to go in the first place to reach its environmental goals.

“I believe that nobody deserves an ‘A’,” Thompson said. “We could all be doing a lot more.”

— Elia Powers

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