A green revolving fund (GRF) is a mechanism for institutions, such as a universities or hospitals, to invest in energy efficiency projects while simultaneously reducing energy consumption and reinvesting money saved into future projects.
That's right, institutions reinvest the money saved into future projects. In other words, as projects pull money from the fund, it is replenished by tracked savings from reduced energy consumption.
In May 2016, the Cleveland Clinic established the largest GRF in the healthcare industry at $7.5 million. “The establishment of this fund strengthens Cleveland Clinic’s commitment to reducing energy usage and serves as a catalyst for future projects to further reduce our impact on the environment,” said Jon Utech, Senior Director for Cleveland Clinic’s Office for a Healthy Environment.
According to the Sustainable Endowments Institute, which is a great resource on this topic (the website has toolkits, case studies, and articles) here are some of the important steps necessary when preparing to implement a green revolving fund:
Identify energy efficiency opportunities across the enterprise.
Build buy-in amongst stakeholders including top management, finance, and facility management.
Identify and secure seed capital.
Establish an accounting model and financial pathways for the transfer and payment of funds.
Develop a communication plan to engage and work with stakeholders.
Launch the green revolving fund using a scaled approach or pilot project.
Track, analyze, and assess the performance of each project and the fund overall.
For continual improvement, get feedback from participants and update as needed.
Plisko Sustainable Solutions is working with a healthcare client to help set up and launch a GRF. Partnering with the Sustainable Endowment Institute, PSS will bring the right stakeholders to the table to ensure long-term success for institutional economic and environmental programming.