Start-Up Story

How the Green Campus Loan Fund Was Established

In 2000, the HGCI Director and Co-Chairs consulted with many staff across Harvard to raise support for establishing a revolving loan fund that built upon previous experience at Harvard (see RCIP below). A proposal was developed that included a request for:

  • $3 million to be made available (from the Harvard bank) as an interest-free revolving loan fund for conservation projects with 5-year payback periods or less,
  • dedicated full-time staff to administer, promote and leverage the fund to its full potential,
  • the Loan Fund to be made available for funding human resource projects that had proven financial and environmental returns, and
  • an advisory group of facility directors to be established to oversee the approval process for loan applications.

After 12 months spent lobbying the central administration, including presentations to facility directors across the campus and a formal presentation to the President and Provost, the proposal was approved for the creation of a second-generation loan fund program. The HGCI was awarded $3 million, an annual staffing budget of $150,000 (for 5 years) and responsibility for full fund administration.

In the first 2 years of operation, the GCLF was administered by a full time staff person. We spent time establishing a foundation of engagement and participation. We also spent time establishing accounting systems, networks, support services, and promotional strategies. After 2 years, the GCLF had evolved to requiring less time (10-20 hr/wk) and was imbedded into the Green Campus Initiative's Green Campus Building Service. The merging of these two programs has allowed the HGCI to link up the provision of its expert building services with the financial incentive of the Loan Fund, and project activity has increased.

In FY05 the President approved a doubling of the Green Campus Loan Fund from $3 million to $6 million while presenting at what came to be Al Gore’s famous An Inconvenient Truth presentation at Sanders Theater. In FY07 through the successful advocacy of the HGCI the loan was again doubled by President Summers to $12 million in his keynote address at the HGCI's sustainability conference. The HGCI gained agreement from the President to expand the terms of the loan fund to support New Construction Loans. The mission of both the old and new Green Campus Loan Fund is to facilitate organizational decision-making that seriously considers the environmental sustainability of campus life by funding innovative infrastructure and behavioral education projects aimed at reducing Harvard's environmental impacts.

Harvard Resource Conservation Incentive Program 1993-1998

The Green Campus Loan Fund is not the first time such an interest-free revolving loan fund has been used at Harvard to create an economic incentive for energy and resource conservation. Between the years of 1993-1998, the Engineering and Utilities (E&U) division of University Operations Services (UOS) administered a program called the Resource Conservation Incentive Program (RCIP). The RCIP was a $1.5-million interest-free revolving loan fund designed to provide a financial incentive for energy and resource conservation projects. During the program's five-year existence, the RCIP financed 35 projects that achieved the following financial and environmental benefits for the University.

    Environmental Benefits Financial Benefits
    • 8.8 million lbs annual reduction of CO 2
    • 35,000 lbs annual reduction of SO 2
    • 19,000 lbs annual reduction of NO x
    • 2100 lbs annual reduction of PM 10
    • 47 million gallons annual reduction of water
    • Over five years, the RCIP loaned $2.6 million
    • Projects yielded a 34% return on investment
    • First-year annual savings estimated at $880,000
    • Five-year savings estimated at $4.5 million

In 1998 the RCIP program ended. In 1999-2000 the Harvard School of Public Health conducted research to determine the efficacy of using an interest-free revolving loan fund as an incentive for reducing environmental and human health impacts of campus operations; the full report is entitled "Economic incentives for sustainable resource consumption at a large university." The HGCI utilized the report, authored by Jonathan Levy and Kumkum M. Dilwali, to generate a proposal for creating a second-generation, improved revolving loan fund program.

Here is a summary of the report's findings:

Report Findings

  • The primary incentive for participation was the financial structure of 0% interest and the provision of funding that would not interfere with capital budget cycles.
  • 1 of 8 participants cited environmental awareness as opposed to financial gains as their motivation for participating in the program.
  • Most participants heard about the program through the facility managers network
  • Perceived barriers cited to involvement:
    • Information barrier (what can we do with the money?),
    • Inability to identify projects that met the payback requirement,
    • Lack of staffing and time, and
    • The incentive was not worth the administrative effort

Recommendations

  • Develop and implement an aggressive program management and marketing plan to reintroduce the RCIP across the Harvard campus
  • Improve information flow by reinstating facility director meetings and using electronic media to disseminate and share project updates
  • Provide high-level technical assistance to help facilities prioritize among competing projects and determine staffing needs
  • Expand program boundaries to include "innovative initiatives" (e.g., campus-wide recycling program, variable-speed drives, digital direct control)
  • Publicize project successes to ensure that the RCIP remains on the "radar screens" of key decision makers

One of the major recommendations gleaned from the Levy/Dilwali report was that any incentive program needed active and continuous management to stay visible to facility management departments. (Levy & Dilwali, 2000)