2013 Cambridge Business & Economics Conference ISBN : 9780974211428 A UNIVERSITY INITIATIVE TO INTEGRATE SUSTAINABILITY IN COURSE DEVELOPMENT Michael JARA Assistant Chancellor for Facilities University of South Carolina Aiken Aiken, South Carolina – USA 29801 mikej@usca.edu David NEWLANDS Senior Assistant Professor IÉSEG School of Management, LEM-CNRS Lille, France d.newlands@ieseg.fr David S. HARRISON Professor of Accounting Chair in Global Business University of South Carolina Aiken Aiken, South Carolina – USA 29801 Adjunct Professor - IÉSEG School of Management, LEM-CNRS davidh@usca.edu Patsy Lewellyn Visiting Professor, School of Business Administration University of South Carolina Aiken Aiken, South Carolina – USA 29801 PatsyL@usca.edu July 2-3, 2013 Cambridge, UK 2013 Cambridge Business & Economics Conference ISBN : 9780974211428 A University Initiative to Integrate Sustainability in Course Development ABSTRACT This article presents a practical application of a university’s migration toward a sustainable structure. To attain the goal of zero green-house gas emissions and institutionalized environmental sustainability, the process included: initial research, defining requirements and limitations, identifying potential solutions, planning and implementing a program. The aspiration was to create innovative sustainability projects, and engage and educate our campus and community. Each stakeholder group was empowered to find ways to reduce campus environmental impacts and save costs. This article presents initial research and resulting initiatives to: (1) meet ACUPCC requirements, (2) drive toward a carbon neutral university footprint, (3) identify means to reduce green-house gas emissions (GHG), (4) reduce energy used by 20% minimum, and (5) create an academic sustainability course to disseminate lessons to learn. The combined programs achieved the 20% target in overall campus energy reduction. This was achieved via a 70% decrease in energy usage in one facility, a 30% reduction in another and two renewable energy sourcing projects. Using “green” dormitory construction materials reduced GHG emissions and carbon footprint by 29%. The article proposes draft proposals that may be used to promote sustainability and safety in other campus communities. Key words: environmental management; green business; organizational change; social responsibility; sustainability JEL Codes: M14, O22, Q52, Q53, Q55 July 2-3, 2013 Cambridge, UK 1 2013 Cambridge Business & Economics Conference ISBN : 9780974211428 INTRODUCTION For decades, proponents of lean manufacturing in industry have suggested companies can be twice as productive, do things better and at lower cost because they use half the labor, half the space, half the effort, half the inventory and capital. Lean has been extensively used in manufacturing to eliminate non-value added waste. The wastes in manufacturing need to be redefined for the service sector, and, in particular, for higher education, because this sector faces many challenges. Since the new millennium, the funding model has been the most notable direct influence on how education establishments manage their direct activities, indirect support and infrastructure. Funding has become a critical issue for public institutions in many countries. This is a result of increasing fiscal deficits, reduced economic growth, or recession. These factors have led to reduced global education budgets and redistribution of resources. Tight financial controls, an external influence, are motivating institutions to establish projects to make better use of resources within mandated constraints. Doane, (2005) asserted universities have the opportunity and the responsibility to lead business and society toward a thriving sustainable economy. In so doing, they may provide multiple benefits to all stakeholders. Ott, Otto and Stiller (2010), suggested that rising energy costs compound the ‘make budget’ problem. Energy shortages and costs can partially be remedied by creating energy efficient infrastructure and practices. Intensive efforts to research and implement sustainable solutions must be based on the probability of achieving attractive benefits (Wright, 2002). Thompson, Calloway and Nawalanic, (1978) suggest a range of opportunities for environmental solutions to both clean up our world and reduce costs. Such factors challenge universities to simultaneously: identify environmental benefits, engage stakeholders, develop green economic models, identify or create technological solutions, implement low carbon – or carbon neutral - capital investment projects, achieve significant cost savings and disseminate knowledge (Strategic Technology Plan Committee, 2008). July 2-3, 2013 Cambridge, UK 2 2013 Cambridge Business & Economics Conference ISBN : 9780974211428 Businesses in mature economies are competing on an ever flatter playing field (Friedman, 2007). At the same time, using older techniques, materials and processes that are cheaper to acquire and are readily available enable developing countries to catch-up. Excess production and competitive service alternatives can lead to price-based competition. Resulting revenue reduction is to be offset, according to economic models, by increasing production to reduce unit cost (based on the logic that contribution to profit of 20% for one sale is equivalent to 4% for 5 sales). Debate on planetary system sustainability suggests people of earth are extracting at least 50% more than what naturally can be regenerated by the planet. Rees, (1997) reported 25% of the world’s population consumes 80% of its resources. Rapid economic growth in emerging nations coupled with failure to invest in updated facilities in mature economies may thwart investments in clean or green infrastructure. Thiery, (2008) suggests these trends probably are destined to lead to environmental instability, with dire consequences predicted by many. Kestner, (1972) and Hulsingh, (1991) suggest “progress at a cost” as the viable strategy for long-term sustainability. Higher education has an important role in developing awareness and interest in viable solutions (Cortese, 2003). Jara (2011, p.5) asserted “The highest education is that which does not merely give us information but makes our life in harmony with all existence. The total number of US higher education institutions is 4,352. The total number of students enrolled in US higher education institutions is 20.7 million.” Sinha et al, (2010) suggested higher education can contribute intellectual and practical leadership to a sustainable, economically thriving society. Many often considered conflicting goals need to be aligned (Sterling, 2004). The vision is to institutionalize sustainability. Al Gore’s (2006) An Inconvenient Truth highlighted physical hazards. Byck’s (2007) Carbon Nation reviewed green-house gas July 2-3, 2013 Cambridge, UK 3 2013 Cambridge Business & Economics Conference ISBN : 9780974211428 emissions (GHC), energy production and consumption issues with potential solutions. Jara, (2011, p.8-9) states that for 2010 global green-house gas “emissions amount to 28.962.4 billion tons, US emissions amount to 7,148.3 billion tons and GHG emissions from Higher Education amount to 158 million tons. While this amounts to less than 2 % of the total, students presently enrolled in Higher Education will account for almost 100% of our future.” Background demand for resources is likely to grow. Cortese (2011, p.3) stated “In the last 2 centuries population has increased from 1 billion to 6.7 billion, energy consumption by 80 times, economic output by 68 times. All living systems on the planet are in long-term decline. We are facing a huge challenge”. Dumanoski (2011, p.1) argues that even though scientists can’t seem to agree on the breadth and depth of global warming, “The urgent question, therefore, is not whether the Earth can survive a different climate, but rather what the changes ahead may mean to human societies.” The contemporary temperate climate and scientific breakthroughs have supported intensive agriculture. This in turn enables population explosion. This has resulted in dense urban living. The radical changes man has made to planet Earth have been made over a comparatively short climatic period. The planet has witnessed the Earth rotation wobble cycle and the end of the last ice age. The cyclic nature of the wobble, combined with cold and warmer periods is noticeable in the history of the Sahara desert that has switched at least eight times between lush, wet and productive land, and the arid conditions that are observed today. Extinction level events such as the asteroid that crashed into the Yucatan peninsula and the Gulf of Mexico, Yellow Stone, Tambora and Krakatoa, Japans earthquake and tsunami, plagues, floods, and other disasters attest to the earth’s volatile history. Analysis of deep ice cores reveals climatic conditions on Earth over the past 800,000 years. Ice cores show current human activity is pushing the Earth system, that sustains life as we July 2-3, 2013 Cambridge, UK 4 2013 Cambridge Business & Economics Conference ISBN : 9780974211428 know it, way beyond recorded ranges. Man’s influence on the atmospheric composition is correlated to an alarming acceleration in the level of CO2 and NO2. Ice core data suggests carbon dioxide levels today are far higher than any time in the past 800,000 years. The film "Six Degrees" examined climatic changes that potentially lie ahead with each degree Celsius change in mean temperature. (3) The notion that global warming is going to proceed at a constant rate has been challenged by the Hockey Stick model. The Earth’s climate history contains evidence of swift, intense, revolutionary change within a single decade. Augustin (2004, p. 623-628) identified one such leap potentially occurred 14,700 years ago, when the Ice Age ended within as short a period as three years. The arguments discussed above are critical appraisals based on evidence. Those projects are theoretical. This article summarizes applied research that has been truly “hands-on”. The USCA sustainability implementation program includes projects undertaken, environmental impacts, cost studies, and savings. Specific energy and cost savings are detailed, along with beneficial environmental impacts. The paper concludes with lessons to learn from the entire process. THE UNIVERSITY OF SOUTH CAROLINA AIKEN STORY – CASE STUDY IN ACTION South Carolina State regulatory requirement - Section 48-52-620 requires universities develop energy conservation plans to “reduce energy consumption by 1% annually during fiscal years 09-13, with a total of 20% reduction of 2000 levels by 2020” (State of South Carolina, Sec. 48-52-620). The Chancellor at University of South Carolina Aiken (USCA) signed the American College and Universities Presidents Climate Commitment (ACUPCC, 2008) to achieve “climate neutrality”. The Chancellor then launched a consultation period including all university July 2-3, 2013 Cambridge, UK 5 2013 Cambridge Business & Economics Conference ISBN : 9780974211428 stakeholder groups in order to create support and participation in fulfilling a new sustainability mission. The aim was to achieve climate neutrality as soon as effectively possible. USCA adhered to the ACUPCC principle that “a clear public commitment from the top level requires the president or chancellor and governing board to institutionalize sustainability” (Second Nature, 2011, p.1). The University team began with a modified form of Deming’s (1986) PDCA process that has proven to be successful in industry: defining, analyzing, implementing, and performing. The aims were: to achieve the goal of zero green-house gas (GHG) emissions; and to institutionalize environmental sustainability. The mission was revised in order to create a clear message for wide dissemination: “To create and implement enjoyable, creative, innovative sustainability projects that engage and educate our campus and community.” On a practical level, the USCA sustainability program began with the following questions, questions that form the foundation of small, ordered steps: What is our goal for energy conservation and cost savings? What has our conservation strategy contributed to energy savings in kWh and therms so far? What is the prospect for making our goals and objectives? What strategies are we using to reduce energy cost? What is our carbon footprint and how do we reduce it? What can our Energy Conservation & Sustainability Committee do? How are we doing with the American College & Universities Presidents’ Climate Commitment (ACUPCC)? What is Sustainability for our campus, how can we educate our campus and what is our path forward? July 2-3, 2013 Cambridge, UK 6 2013 Cambridge Business & Economics Conference ISBN : 9780974211428 USCA’s vision became clear: “To lead in innovative and creative sustainability education and solutions that will help to create future leaders and community members who engage in environmental sustainability.” The education and solutions orientation was in part to stimulate and facilitate changes via the influence on students in the courses, and their subsequent influence on business networks. Future leaders would likely have roles in corporate management and the political domain. A positive consequence also was an increased revenue to the university. USCA objectives included: “to aggressively drive our university carbon footprint to neutral,” “to meet the requirements of ACUPCC - ASAP,” “to find opportunities, methods, and strategies to continuously reduce our Green-house Gas Emissions (GHG)” (Jara, 2010, p.28). The cost avoidance objective was based on reducing energy consumption by at least 20% by 2020. That objective was abbreviated to 20 / 20. Implicit in the 20 / 20 objective was to move significantly toward relying more on renewable energy. A New Charter was developed that promised: To promote conservation of energy in every possible way; to promote sustainability in all university operations; and accomplishing all of this with economic cost reductions as concurrent and simultaneous outputs. Cost reduction became the complimentary, coincident goal. Better energy use equates to lower costs. Moving from words to measurable progress relies on practical implementations. Both infrastructure and behavior needed to be modified to support the initiative. USCA began to systematically review internal activities, and purchased products and services. The initial task was to undertake a current state analysis in order to develop supply chain value and waste stream maps. Review of these enabled priorities to be identified and quickfixes to be implemented in order to generate some early successes. July 2-3, 2013 Cambridge, UK 7 2013 Cambridge Business & Economics Conference ISBN : 9780974211428 Following the energy conservation suggestions offered at Green-living-save-us.com resulted in relatively easy identification of readily implementable measures without significant investment. Opschoor, (2011) asserted this is an important first step toward achieving carbon neutrality. Immediate cost savings became the new standard for housekeeping practice. USCA now has hundreds of patent applications that enhance energy management control systems. USCA developed a bespoke ‘Energy Management System’ to control heating and air conditioning units on campus that provides the Maintenance Director and his staff frequent status updates. Implementing this system yielded some immediate successes. Initial energy conservation projects included: Retrofit lighting solutions replaced T-12 filament bulbs with T-8’s Magnetic ballasts replaced with more sensitive electronic equivalents Modeling old chillers and air handlers replaced with energy saving units that are safer to operate. New facility construction incorporated energy saving principles specified in the Leadership in Energy and Environmental Design (LEED) silver standard. All future new construction on USCA campuses meet LEED standards. This requirement is overseen by USCA Project Managers. Ongoing dialogue between University administration and the community to communicate and promote the sustainability mission. Initial implementations were successful, based on obvious high profile wastes. Other more elusive energy challenges remained. Using a "redesign as if created today" approach embedded in the business process re-engineering approach, the team migrated to system modeling with electronics circuit boards. This research yielded the following mandates thought to be fundamental to creating a sustainable energy usage profile: 1. Operate using renewable energy and create a circular production economy to eliminated waste. 2. Turn waste products into raw materials or nutrients. Beyond recycling, this is creating value out of all productive outputs, primary, secondary, by-products and waste. 3. Operate within the sustainable yielded resources of the planet. July 2-3, 2013 Cambridge, UK 8 2013 Cambridge Business & Economics Conference ISBN : 9780974211428 4. Consume resources at a rate lower than they can self-regenerate. USCA decided to take a leadership role to provide information, knowledge and skills to the campus and its community. The focus of this education was on the value of achieving a healthy, sustainable society. Effective teaching comes from action-based effort, leading by example, and engaging students. This work extended to the local community. The sustainability initiatives by USCA have conserved energy resulting in annual reduction of the carbon footprint by at least 5% annually -- ultimately reaching carbon / climate neutrality and then using carbon offsets. Waste is recycled back to raw materials. This sustainability ‘way of life’ at the university serves as an educational platform such that graduates now carry that strong message back to their work places. The phenomenon ‘when in Rome, do as the Romans’ is recognized, particularly in light of psychological experiments by Stanley Milgram and the Stanford Prisoner Experiment. Grounding in strong and self-supporting values therefore is core to USCA educational doctrine. The USCA Odyssey: Turning Green To Gold USCA energy cost savings goal is more ambitious than the state legislated minimum requirement to reduce energy consumption 1% annually. The legislation is enforced by South Carolina’s Energy Office. Electrical energy usage (kWh) for FY09 reduced 5.8% compared to FY08. USCA Energy Conservation Plan was approved by SC Energy Office and a grant award of $156,984 was issued. Three projects were funded, included heating, ventilation and air conditioning unit replacements, controls replacement and lighting replacements. Each conserved more than 18% electrical energy for the assigned buildings, continuing progress toward the goal of 20% savings by Fiscal Year (FY) 2020. July 2-3, 2013 Cambridge, UK 9 2013 Cambridge Business & Economics Conference ISBN : 9780974211428 Table 1: Main Campus Kilo Watt Hour Usage and Cost Savings for FY 08 versus FY 09 (School Dude, Utility Direct) kWh Use kWh Use Month 2009 2010 % Difference $ CarbonFoot July 950684 764674 -19.6% = $19,160 134 metric tons August 874389 714,95 -18.2% = $16,900 115 metric tons September 1023801 806499 -21.2% = $22,600 156 metric tons October 868277 757312 -12.8% = $9,550 80 metric tons November 641718 599634 -06.6% = $3,600 30 metric tons December 667847 589881 -11.7% = $6,900 56 metric tons January 586817 649228 +10.6% = $5,600 +40 metric tons February 674663 659231 -02.3% = $1,300 11 metric tons March 689087 696223 +01.0% = $600 +5 metric tons Source: http://web.usca.edu/dotAsset/2381661a-5b60-449e-89a3-69c594d2ecac.pdf During a six month period kWh usage dropped by 22%, with a cost avoidance of $95,722. In fiscal year 2010, USCA exceeded the goal of “20% by year 2020,” over a period of only 6 months. University maximum peak load for FY 2010 was 2146 kW compared to the 2009 high peak of 2477 kW, saving 331kW. Peak demands have a bias effect on purchase price of energy (Audin, 2003). For months after a peak demand, a premium price can be charged by a distribution company. To reduce peaks therefore became a cost control imperative. Peak ratcheting for 2009 was 80% of 2477 = 1982 kW. For 2010 peak ratcheting was 80% of 2010 = 1608kW. This is a saving of 374kW on the on-peak demand charge for the next 8 months. This equates to 2992 kW for the rest of the year at $10.48 per kilo Watt. The saving therefore demand = $31,356. Cost avoidance for 2010 is estimated at $180,000. Monthly efficiency savings for the year are approximately $150,000. Monthly on-peak demand savings for the year are approximately $31,300. Focusing on the strategy to reduce “expensive” peak rate energy, USCA established a desktop Peak Rate Alert message system was devised. The Alert notifies users when the campus KW peak is approaching the maximum desired ‘economy rate’ value. The email is July 2-3, 2013 Cambridge, UK 10 2013 Cambridge Business & Economics Conference ISBN : 9780974211428 sent to the entire campus, asking all to be alert to potential savings by turning off lighting in hallways and unoccupied rooms. . The campus community were asked to “be an energy hero.” We give what is called campus alerts: “ATTENTION CAMPUS – PEAK RATE ALERT.” While in other parts of the world, this is perhaps typical, historically the U.S. has enjoyed electricity in cheap abundance, resulting in the norm of full and permanent illumination. The simple message to everyone to turn off unnecessary lights and equipment not in use had some positive immediate results. Peak rate energy costs were $14.97 per kilowatt. Off-peak energy costs dropped to $4.49. The Peak Rate Alert helped USCA save as much as $2,000 per month. Several other aspects of the energy conservation program that rely on communication include: Raising room thermostat temperatures to 76 degrees Fahrenheit (Summer) Lowering room thermostat temperatures to 69 degrees Fahrenheit (Winter) Implement smart metering and visual control dashboards showing green, amber and red warnings for local usage. Using these enables local users to reduce their usage. This feedback control loop is known as ‘load shedding’. This now is applied in 15 minute increments. Reflections on the Implementation Making these changes required new communications. Arbitrarily implementing a top down strategy without consultation is more likely to result resistance. It is necessary to consult with those that are affected by changes that are being made. Seeking stakeholder feedback as part of the program serves to minimize resistance and provide a sense of influence. USCA developed presentations to inform instructors, staff and students about the conservation July 2-3, 2013 Cambridge, UK 11 2013 Cambridge Business & Economics Conference efforts. ISBN : 9780974211428 We began promotional campaigns to communicate what everyone in the university community can do to contribute to reducing energy consumption, carbon emissions, and as a spin-off also cut cost. USCA plans an energy conservation website portal to illustrate how each campus building uses energy, with details of programs and energy reduction progress provided. The portal is a place to share ideas, report and reward conservation successes, and share lessons learned. Although equipment upgrades reduce operating costs, the key to sustained energy reduction is the buy-in by campus stakeholders. To this end, an energy conservation and sustainability committee (ECSC) was established to fully engage faculty, staff, and students. The ECSC was established to: Collate green-house gas emissions data based on commuting, energy use, waste, and generate status or progress reports. Brainstorm renewable energy sources, waste reduction, energy conservation, and "go green" education for the entire campus community. Encourage participation in projects. Educate and involve the greater community. Recognize and reward successful conservation initiatives by campus “energy heroes”. The ideas, projects, and guidelines proposed by ECSC are forwarded to the physical plant management division for feasibility study and potential implementation. Green Business and Sustainability in Academic Course Development USCA developed a “Green Business” class, delivered first in 2011. The best person to teach the course was the Vice Chancellor leading the campus energy programs. The course explores why and how smart companies use environmental strategy to innovate, create value, and build competitive advantage. Emphasis is placed on continuous improvement “kaizen” methods that combine many small changes to achieve significant overall results. This approach aligns with USCA management and accounting courses that embed similar kaizen July 2-3, 2013 Cambridge, UK 12 2013 Cambridge Business & Economics Conference ISBN : 9780974211428 approaches in course designs. In world class business and education all disciplines work together toward common objectives. By holistically linking management, accounting, and sustainability through common management methods USCA effectively demonstrates interconnections and interrelationships of the various subjects. Students can see examples, first-hand, merely by “walking our halls.” The Green Business class includes case histories of successful and failed sustainability initiatives and the perspectives of guest speakers invited to speak on greening business operations. Students projects focus on answering the theme question “where is the business edge in sustainable approaches?” with the aim to ‘‘identify hard hitting practices that work" through research in sustainability literature, websites, blogs, twitter and Facebook social websites. CONCLUSIONS AND FUTURE PLANS USCA’s carbon footprint was initially calculated as 10,479 metric tons. In two years this was successfully reduced by 29%. Reducing purchased energy (electric and natural gas) impacts 80% of our carbon footprint. Commuting students, the next largest contributor to the carbon footprint, was reduced through the addition of a freshman dorm for approximately 400 students, increasing the current resident capacity to approximately 1000 students. USCA’s policy is to encourage increased public transportation, carpooling, bicycles, and simply “walking”. A third significant carbon contributor is vehicle fleet vehicle consumption. To address reduction in use of gasoline and diesel fuel, we are investigating replacement vehicles powered by alternate fuel sources, including biofuel, and hydrogen. The majority of the quick payback energy saving projects have been accomplished. USCA achieved a 70% decrease in energy usage for one facility, a 30% reduction in another. Two July 2-3, 2013 Cambridge, UK 13 2013 Cambridge Business & Economics Conference ISBN : 9780974211428 projects to use renewable energy resulted in main campus energy savings of approximately 20%. Using “green” dormitory construction materials reduced GHG emissions by 29%. Examples of potential energy and environmental projects include: balancing swimming pool re-heating, buildings managed via digital controls, and detailed energy usage analysis. All campus stakeholder groups continue to research potential renewable energy sources. USCA is committed to the following initiatives/standards going forward: New construction will be LEED standard certified New appliances will be ENERGY STAR certified Air handlers will be fitted or purchased with Variable Frequency Drives Heat exchanger for natatorium will be used to dramatically improve heat recovery Motion detectors installation will be completed in classrooms All energy units will be controlled by the energy management system All campus energy users will be challenged to improve their individual conservation efforts LED lighting is to be installed Fleet and work vehicles will be replaced by hybrid or electric vehicles Investigate additional renewable energy projects (solar, geo-thermal, and wind) Investigate Hybrid and electric powered vehicles Investigate geo-thermal energy sources Investigate bio-mass waste treatment July 2-3, 2013 Cambridge, UK 14 2013 Cambridge Business & Economics Conference ISBN : 9780974211428 References ACUPCC (2008) ACUPCC Voluntary Carbon Offset Protocol - Climate Commitment, American College and University Presidents’ climate commitment, 5 Jun 2008. 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