[groups_non_member group=”premium”]

A hot topic these days on university campuses and among capital endowment managers for cultural and philanthropic organizations is whether or not to divest from fossil fuel companies.  While this is a good way to express an opinion about an institution’s values, it will not necessarily contribute to the kind of change that would be a much better expression of those values. It says how you don’t like to earn a return, but it doesn’t say anything about how you can make a return investing through an aligned manner.

Instead, consider an investment strategy that supports companies which not only improve conditions for sustainability, but also offer a means for large institutions and their stakeholders to experience the positive impact of those investments firsthand.  For example, a university endowment strategy that includes investments in building-efficiency solutions would earn attractive returns while also significantly benefiting the campus community.

If you are a subscriber click here to login and read the complete article.  For more information about the JSFB click here  or contact us to learn more about Cornerstone’s research and service offering.

[/groups_non_member]

[groups_member group=”premium”]

A hot topic these days on university campuses and among capital endowment managers for cultural and philanthropic organizations is whether or not to divest from fossil fuel companies.  While this is a good way to express an opinion about an institution’s values, it will not necessarily contribute to the kind of change that would be a much better expression of those values. It says how you don’t like to earn a return, but it doesn’t say anything about how you can make a return investing through an aligned manner.

Instead, consider an investment strategy that supports companies which not only improve conditions for sustainability, but also offer a means for large institutions and their stakeholders to experience the positive impact of those investments firsthand.  For example, a university endowment strategy that includes investments in building-efficiency solutions would earn attractive returns while also significantly benefiting the campus community.

Energy efficiency presents some of the most immediate and fruitful opportunities to address climate change. Again using the example of universities, many campuses are home to aging and outdated physical assets that would fail most environmental, economic and wellness exams and hardly represent the potential and aspirations—and increasingly, the values—of the students they serve.

In today’s economic environment, building owners are looking for ways to bring savings to their bottom line. The falling cost of wireless communication, mobile technology, data analytics and storage results not only in sustainable practices but also attractive returns on innovation. For example, electric smart meters in multi-unit residences can produce up to a 30% ROI depending on jurisdiction and electricity prices. LED lighting technologies combined with automation and controls produce similar returns, and the price for quality has come down significantly. For example, a high-traffic retailer recently retrofitted its lighting and controls, generating a 25% ROI.

As a result of the accelerating penetration in the market for energy-efficient solutions, innovative companies providing these solutions are growing at high double-digit rates.  It is a large and active market for investors, with recent realized investment gains at multiples of revenue, and in the hundreds of millions of dollars. Many innovations in real estate operations today also offer new measurement, visualization, wellness and engagement tools that can provide a meaningful context to the dialogue on infrastructure planning, renewal, resilience and sustainability — all while saving money for our universities. Imagine also turning campuses into laboratories for advancing the next generation of building and infrastructure innovations that will further optimize resource consumption.  And think of how this could energize the young engineers, economists, environmental scientists, and industrial ecologists who populate their campuses.

It’s time for university endowments to invest for positive outcomes that can save money, make money, and reduce our environmental footprint. They could start by leveraging their extraordinary human, capital and physical assets to tell a much more empowering story of engagement than simply to say, “Let’s stop investing in bad stuff.”

Susan McArthur is Managing Partner at Greensoil Investments, where she and her partners built the team and developed the strategy for the Greensoil Building Innovation Fund (GBIF). Susan has over 25 years of investment banking experience in New York, Paris and Toronto.

Jamie James is the Chief Innovation Officer at GBIF. He has been a green building leader in Canada as a real estate developer and technology investor. He is also the founder of the non-profit Tower Labs accelerator.
[/groups_member]