Being boldly sustainable, both on campus and in the corporate world, means understanding the difference between costs and investments. It means understand-ing that we need to think in terms of life cycle, not just business cycle. It means realizing that decisions about resource allocation can no longer be made without regard to their downstream impacts and that we need to take into account all externalities before committing to a particular path.

“Although a person’s instinct may be to retreat from green initiatives in hard times,” observes corporate strategist Andrew Winston, “that would be short-sighted and a huge mistake.” Some recent data under-scores the extent to which corporations that have made a deep commitment to sustainability in the midst of the current economic recession are financially better off than those that have not.

In a report released in February, “Green Winners: The Performance of Sustainability-focused Companies in the Financial Crisis,” management consulting firm A.T. Kearney noted that in 16 out of 18 industries, compa-nies with a strong sustainability commitment were “the clear leaders in the financial markets” outperforming industry averages by 15 percent in the second half of 2008. Among the common characteristics of these lead-ing companies were:

In May, a study by the research firm Aberdeen Group found that sustainability initiatives cut overall costs in more than 200 companies by six to 10 percent; at the same time, customer retention rates increased 16 per-cent.

There are important lessons here for universities and colleges about how to deal with tough times. As Jhana Senxian and Cindy Jutras, authors of the Aberdeen Group’s “The ROI of Sustainability,” contend, “far from being a philanthropic ‘nice to have,’ ” sustainability is a “ ‘must have’ strategy for long-term, business viability and success.”

These findings take on special significance in the con-text of the profound changes now taking place. Higher

education, and the economy in general, are not just experiencing a conventional downturn; they are undergoing a major paradigm shift in which the old rules will no longer apply. The new way of doing busi-ness will have to bear in mind the previously overlooked value of ecosystem services and apply the concepts of full-cost accounting and life-cycle analysis.

How do we create a learning environment for the next generation of leaders in which the consequences of potential choices are examined holistically over the long run?

Demonstrating a broader view of their investment priorities would be a good place for colleges and uni-versities to start. Higher education, if it intends to take its own long-term sustainability seriously, needs to focus on how a redirection of endowment investments could improve the well-being of society and the envi-ronment.

Why?

It’s simple. Colleges and universities can only thrive if the communities in which they are located and the biosphere upon which they depend are healthy. Any college or university that is so shortsighted as to pur-sue its ends without taking into account the interests of the larger community or ecosystem will not thrive over the long haul. In the end, it will find itself forced, one way or the other, to deal with the fact that its future is inextricably linked to that of the larger web of social and ecological relations in which it is embedded.

Recognition of this interdependence led Yale Univer-sity to invest in the city of New Haven, CT, and Berea College, in Berea, KY, to invest in the land and people of Appalachia. It might have led Harvard University to a different understanding of its relationship to the Allston, MA, neighborhood where a $1.2 billion hole in the ground sits while administrators figure out how to finish a state-of-the-art science complex.

College and university endowments, worth hundreds of billions of dollars, could be a powerful force for social and environmental good even as these institu-tions pursue their own financial self interest. Yet only 35 percent of the 300 institutions surveyed in the 2009 College Sustainability Report Card, the independent

Editorial A New Era in Higher Education?

MARY ANN LIEBERT, INC. • VOL. 2 NO. 5 • OCTOBER 2009 • DOI: 10.1089/SUS.2009.9847 SUSTAINABILITY 257

By Peter Bardaglio and Andrea Putman

Peter Bardaglio

Andrea Putman

• A focus on long-term strategy, not just short-term gains; • Strong corporate governance; • Sound risk-management practices; and • A history of investment in innovations.

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258 SUSTAINABILITY MARY ANN LIEBERT, INC. • VOL. 2 NO. 5 • OCTOBER 2009 • DOI: 10.1089/SUS.2009.9847

sustainability evaluation of campus operations and endowment investments published by the Sustainable Endowments Institute, invest in renewable energy, and only 10 percent in community-development funds.

If everyone is to have a chance at a healthy future, higher education institutions must embrace a larger understanding of their mission and not confine them-selves simply to growing their endowments while the communities around them come unraveled and the degradation of the environment continues unabated.

One of the most effective ways that an institution can have a positive effect on the environment and local economy is to set aside a portion of its endowment to use as a revolving loan fund for cities and towns for communitywide energy-efficiency retrofits. Such loans have the potential for returns on investment as good as or better than anything in the financial markets today.

In 2005, at the height of the most recent financial bubble, Harvard’s $12 million revolving loan fund for energy savings projects on campus had a 30 percent rate of return, while its endowment posted a 19 per-cent gain. Imagine the impact if, instead of investing in speculative paper that blew up in its face, Harvard had invested in the infrastructure of its campus and the larger community.

In making such investments, a college or university can not only help reduce the carbon footprint of its com-munity, but also reduce energy costs and keep dollars from flowing out of the community and into the pock-ets of the utility companies. These dollars will recircu-

late in the community, increasing spending and indi-rectly contributing to the creation of new jobs. And, of course, investments in energy efficiency and renewable energy also directly create new green-collar jobs that can provide much-needed economic stability during even the toughest of recessions.

A revitalized sense of mission, more sustainable com-munities, and leadership that addresses the complex, interconnected problems of our time, both in the aca-demic world and in the world at large: These are the hallmarks of what could be a new era in higher educa-tion.

“Occasionally something different happens,” writes business strategist and Massachusetts Institute of Technology senior lecturer Peter Senge, “a collective awakening to new possibilities that changes everything over time—how people see the world, what they value, how society defines progress and organizes itself, and how institutions operate.” If colleges and universities can demonstrate how to cultivate a sense of collective responsibility for the good of the whole, they will not only bring about a long overdue transformation of higher education, but also create the possibility of a more sustainable and healthy civilization.

Peter Bardaglio, based in Ithaca, NY, is a senior fellow at Second Nature. Andrea Putman, based in Arlington, VA, is Second Nature’s director of corporate partnerships for the American College & University Presidents Climate Commitment. They are the co-authors of Boldly Sus-tainable: Hope and Opportunity for Higher Education in the Age of Climate Change (NACUBO, 2009).

Higher education institutions must

embrace a larger

understanding of their mission and

not confine themselves

simply to growing their endowments

while the communities around them

come unraveled.

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