Innovative Loan Fund
Yields Big Returns
Through its use of Harvard’s innovative Green Campus Loan Fund, HBS has cut energy expenditures and provided a model for conservation-minded schools around the University to follow.
The loan fund provides capital for projects that reduce the University’s environmental impact and have a payback period projected at five years or less. Any Harvard unit or department may apply for the interest-free loans, which are repaid out of the savings generated by reductions in energy consumption, utility usage, and waste removal.
HBS was one of the first schools to take advantage of the loan fund when it was created in 2002. Since then, the School has borrowed nearly $1.6 million for over a dozen projects, including:
- Energy-efficient lighting at Burden, Kresge, Morris, and Teele halls.
- A recycling program that now collects more recyclables on campus — including paper, cans, and bottles — than trash.
- “Green construction” projectsat Hamilton Hall and Sherman Hall/Wyss House that are aiming to garner LEED (Leadership in Energy and Environmental Design) certification, a voluntary, consensus-based standard for energy-efficient buildings.
The impact on the School’s bottom line has been significant. HBS has achieved approximately $300,000 in annual operational savings and earned $330,000 in rebates and grants from utilities and from the Massachusetts Technology Collaborative. The projects have also offset HBS’s greenhouse gas emissions — the main human-produced cause of global climate change — by over 2.7 million pounds per year. That’s equivalent to taking 265 cars off the road for one year, saving 139,000 gallons of gasoline or 2,848 barrels of oil.
For Harvard as a whole, loan-fund projects have yielded an average 25 percent annual return on investment, prompting the University recently to double the program’s funds from $6 million to $12 million. Leith Sharp, director of Harvard’s Green Campus Initiative, says that HBS’s leadership has been critical in making the loan fund a success. “HBS joined our advisory group and began to make full use of the fund from the very beginning,” she declares. “The School’s enthusiasm was instrumental in bringing other schools around.”
Andy O’Brien, chief of operations at HBS, says the loan-fund projects would have been the right thing to do even if the economics had been less attractive. Notes O’Brien, “It’s important to HBS simply because it’s the socially and environmentally responsible thing to do.”
— Paul Massari
