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October 31, 2007

Are Colleges Only Green Skin Deep?
    by Anne Moore Odell

The Sustainability Report Card 2008 examines colleges and universities dedication to sustainability, on campuses and in endowment portfolios. -- More venues of higher education are responding to calls to align environmentally friendly practices on campuses with sustainable investments in their endowments. However, the new College Sustainability Report Card 2008 finds that colleges still have long way to go when it comes to greener endowments. At the top of the sustainability curve, the Report Card names Harvard, Dartmouth, University of Washington, Middlebury, Carleton, and University of Vermont.

SRI Mutual Funds GuideFocusing on the top 200 largest endowments, equaling over $343 billion in endowment assets, the Report Card finds 68% of schools have improved their overall sustainability scores from last year. Concern over climate change and rising energy costs have helped drive colleges toward sustainability.

This is the second year the Report Card has been created by the Sustainable Endowments Institute, a special project of Rockefeller Philanthropy Advisors.

The highest grades overall were given to colleges in the five campus categories of Administration, Climate Change & Energy, Food & Recycling, Green Building, and Transportation. Colleges' grade point averages dropped, however, in two of the categories that measured colleges' endowments sustainability. Sixty-six percent of the institutions received "F" grades in the Shareholder Engagement category while in the Endowment Transparency category, 58% of the institutions collected "F"

Four prominent colleges and universities failed with "F" grades": Juilliard School, Howard University, Regent University, and Samford University. Twenty-one other schools also flunked, with "D" grades in sustainable practices.

Profiles for each school were based on two research areas: campus operations and endowment shareholder practices. A significant amount of information was available from public sources about campus operations. Much less information was available about endowment shareholder practices explained Mark Orlowski, Founder and Executive Director of the Sustainable Endowments Institute.

"The Report Card is the only independent sustainability evaluation of campus operations and endowment investments," Orlowski "We seek to offer opportunities for schools to learn from each other's experiences and to adapt best practices. We hope that by releasing the Report Card, we can help spark discussions about the role of endowment practices in sustainability leadership," he added.

Middlebury College, a liberal arts college with 2400 students in Middlebury, VT, was named one of the 25 College Sustainability Leaders by the 2008 Report Card with an overall grade of "A-." Jack Byrne, the Campus Sustainability Coordinator for Middlebury College, explained how the college recently revised its greenhouse gas reduction goal from 10% below 1990 levels by 2012, to carbon neutrality by 2016.

"A Steering Committee is presently developing an implementation plan for achieving carbon neutrality by 2016," Byrne detailed. "We will be looking closely at making gains in energy conservation, the efficiency of the built environment, engaging the entire College community more fully in how to reduce GHG emissions, and how to offset any GHGs that we are not able to eliminate by the way we operate."

Almost 45% of colleges in the report are committed to cutting carbon emissions in the attempt to slow climate change. Green buildings are the new norm with 59% of colleges reporting green construction. Colleges are also buying more local foodstuffs (70%) and serving fair trade coffee (64%).

Another earmark of the increase in schools' commit to the environment and sustainability is that more than one-third of all surveyed schools have full-time sustainability staff, and more than two-thirds have a web-site dedicated to campus sustainability. Yet only a handful of colleges have full-time staff devoted to endowment sustainability matters.

However, a commitment to greening the campus alone does not a sustainable college make, as many colleges have not greened their endowments. Only three colleges qualified as Endowment Sustainability Leaders: Carleton College, Dartmouth College, and Williams College. With billions of dollars in assets, endowments can weld a lot of say in the ownerships of companies, and could help move companies told more sustainable practices.

One reason many institutions prioritize campus sustainability is due to competition amongst schools in the sustainability arena. Also, greening campus operations is very visible in most cases, whereas, changes in endowment policies are largely invisible, Orlowski said.

"There is a large and prevalent misconception that anything related to endowment sustainability equals divestment," explained Orlowski. "When endowment policies are raised, many trustees and senior administrators automatically think of divestment campaigns. Few university officials understand that they are missing important opportunities in proxy voting to align endowment shareholder votes with existing campus policies on sustainability such as improving energy efficiency."

The drive toward sustainability is coming from various groups. Students at many schools are helping create new policies and initiatives around sustainability. In some cases, alumni are raising questions about sustainability in response to fundraising initiatives by schools.

Orlowski offered, "In some cases, alumni are raising questions about sustainability in response to fundraising initiatives by schools. Alumni and others considering donations can help call attention to the importance of sustainable campus and endowment practices. First, they can check how the school performed on the Report Card and, if the grades are less than stellar, ask the school how it plans to improve."

More than two out of three schools have multi-stakeholder campus sustainability committees, but just one in eight have a similar committee focused on endowment sustainability issues.

Orlowski suggested students, alumni, staff, and other concerned stakeholders propose an advisory committee on shareholder responsibility or a similar committee structure to help move college endowments toward sustainable investing. These committees are usually comprised of student, faculty, administrator, and alumni members. Almost two dozen schools, including Dartmouth, Harvard, Stanford and Williams, have already created advisory committees. In the past year, Middlebury has established a committee and earlier this year, the Tufts University board of trustees voted to establish such a committee.

Middlebury's advisory committee-composed of students, administrators, faculty, alumni, and trustees-makes recommendations to its investment committee concerning the ethical implications of social and environmental responsibility when investing endowment funds, Byrne explained. For example, in 2006 the College adopted a policy to not invest in companies whose activities support Sudanese government and policies in Darfur.

Currently, information about Middlebury's endowment is only available to trustees, senior administrators and other select members of the school community. Some institutions, for example Dartmouth College, Michigan State University and Pennsylvania State University, have opened up their portfolio and proxy voting records to the public. Almost 25% of schools make lists of endowment holdings available to the campus community with 15% of schools making proxy-voting records available.

Middlebury has also established a Green Fund as part of its current capital campaign to which the Class of '07 and other donors have directed gifts and to which future donors may direct gifts.

Byrne told "Middlebury recognizes the challenge society faces in living in balance with the capacity of the earth's ecosystems and in creating a more socially just and peaceful world. By learning how to do this in the way it operates and in how it educates, we are providing students with important knowledge, skills, and experiences that they will apply in their adult lives for positive change."

" It is also important to the College because its stakeholders, i.e., prospective and current students, are increasingly looking for higher education institutions that walk the talk," Byrne concluded.

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