FOR IMMEDIATE RELEASE
New Report on Campuses and Endowments Investing in Clean Energy
Chicago, IL (November 2, 2016) –
Today the Intentional Endowments Network (IEN) announced the launch of a new report titled “Investing in Clean Energy: Campuses and Endowments” during a Forum at Loyola University Chicago. The report is designed to encourage conversation about the financial and societal benefits of clean energy investments higher education can make – both as a customer and an institutional investor through their endowments. It explores the current opportunities and barriers to such investments.
Clean energy investments include renewable energy generation, energy efficiency, energy storage, combined heat & power, and electrified transport solutions. With over $528 billion in assets, the ability to make illiquid investments, and long-term investment horizons, there are many options for college and university endowments to invest in clean energy. More 650 colleges and universities have committed to going carbon neutral in their campus operations, and many have made significant clean energy investments to move in that direction.
Chris O’Brien, who chairs the IEN Working Group that led the development of the report, said “More than 250 campuses are now voluntarily sourcing renewable energy. Renewables and a growing range of other clean energy investments are delivering benefits to the bottom line, in addition to reducing carbon and creating learning and research opportunities.” O’Brien is the Director of Higher Education Programs, Altenex, and Edison Energy company, and faculty and former Director of Sustainability at American University, where he helped managed what was then the largest solar power procurement in the sector.
The report outlines numerous clean energy financing and investing options for colleges and universities, as well as several challenges, including concerns about financial performance, which may be impeding endowments from making such investments. The report addresses identified investment challenges with current data and potential solutions, as well as snapshots of leading institutions that are driving the clean energy economy forward, detailing their current investments in clean energy on and off campus.
This report could not come at a more pertinent time. New investment in clean energy across all asset classes has grown from $62 billion in 2004 to a record $349 billion in 2015.Green Revolving Funds (GRFs) – pools of capital that fund clean energy investments on campus and are repaid with the savings - report a median annual return on investment (ROI) of 28%. Direct ownership in certain clean energy projects can produce returns in the 10-15% range. Power Purchase Agreements (PPAs), where a developer finances and owns a project and a campus purchases the electricity at an agreed upon price, have no upfront capital costs and the resulting electricity costs less than market prices.
"There has literally never been a better time for academia to consider investing in clean energy,” said Ken Locklin, another member of IEN’s Clean Energy Working Group and Director at Impax Asset Management, an investment firm with specialization in the clean energy sector. “The range of investment vehicles has never been wider, and the case for adding this class of investments to portfolios for both financial and societal reasons has never been more clear.”
Demand for electricity is expected to double by 2060, requiring infrastructure investment in clean energy and energy efficiency. Solar and wind could supply up to 39% of power generation by 2060, and coal and oil are expected to fade from the energy supply. This expected economic sector growth and development points to a long term market opportunity in the clean energy sector.
Through meetings and forums, the Intentional Endowments Network (IEN) has brought together hundreds of higher education and foundation leaders with investment experts to share information about ways to create sustainable investing strategies without sacrificing financial returns. Through outlining clean energy financing and investing options for colleges and universities, as well as addressing numerous challenges institutions may face, this report creates a starting point for colleges, universities and endowments to start the clean energy investment conversation on their campus.
This report was a collective effort of members of IEN and others in the field, specifically members of IEN’s Clean Energy Working Group, which was created to identify and share strategies for colleges and universities to invest in energy efficiency and renewable energy through campus operations and their endowments.
To read the full report, visit: http://www.intentionalendowments.org/clean_energy_white_paper
About the Intentional Endowments Network
The Intentional Endowments Network (IEN) is a collaborative network supports colleges, universities, and other mission-driven organizations in aligning their endowment investment practices with their mission, values, and sustainability goals without sacrificing financial returns. IEN is an initiative of The Crane Institute of Sustainability, a tax-exempt 501(c)(3) non-profit. To learn more visit www.intentionalendowments.org.