UO Sustainability Leadership Program workshop
About this time last year I posted on several sustainability workshops being offered by the UO Sustainability Leadership Program. These were being led by Josh Skov (Good Company – Eugene) and I highly recommended them to my readers. I didn’t actually attend myself, because I already had. I completed the UO SLP certificate program in 2009 and have been cherry-picking classes ever since.
Since I’m currently sitting on two non-profit sustainability boards, I felt I needed more exposure to financing for sustainability programs. Voila! On June 3rd I attended the program’s newest offering, Finance for Sustainability: Innovative Strategies for Public and Private Sectors, led by Aaron James of Blue Tree Strategies. This one-day workshop focuses on practical tools and conceptual frameworks for influencing capital allocation decisions to finance sustainability in public and private organizations.
John Vareldzis - UO SLP Certificate program cohort
Lola Scobey - UO SLP Certificate program cohort
“This workshop focuses on how to finance projects that contribute to sustainability by highlighting capital allocation decisions and methods and tools for influencing these decisions. Guest speakers include Aaron Berg, chief financial officer of Clean Energy Works Oregon and Kipp Baratoff, principal with Equilibrium Capital. Course content includes an overview of project finance, public and private sources of capital, and innovative strategies in clean energy finance. Financial instruments common and particular to clean energy finance will be covered…”
The bottom line … was it worth my time and money? In short … yes. I really enjoyed the class (especially the guest speakers) and will recommend it to others. The day flew by rather fast and at the end I was hungry for more, which isn’t always the case in these workshops. This topic it isn’t for everybody, but I think those working on public/private sustainability projects will certainly gain some insight. It is always a good idea to bring real life experiences and examples to mesh with theory and this course accomplished that in my estimation.
Since many of us see finance as a dry topic, I feel some SLP certificate seekers might pass on this class, which would be a pity since financial reengineering is required to bring triple bottom line sensibilities to mainstream-thinking outside of local government. So, I thought I’d share the evaluation I submitted to Ruta Stabina, SLP Program Coordinator. It may peak an interest for some readers, and put others to sleep, but it’ll give you a flavor of what the UO Sustainability Leadership Program is offering.
Every workshop is a different experience
One other thing – all sorts of people attend these courses so you never know who you’ll meet. I was lucky enough to sit next to a man who had recently worked for the Oregon Department of Energy (ODOE) and well … I got the dirt, so to speak. [I won’t expose the guy, because he still works for the state, but I think he enjoyed the conversation as much as I did!]
Finance for Sustainability: Innovative Strategies for Public & Private Sectors
Instructor: Aaron James, Blue Tree Strategies
Guest Speakers: Kipp Baratoff, CFA and Aaron Berg, Blue Tree President/CEO
Course Rating (low=1 High=5)
- 4 The amount of information provided
- 4 The diversity of topics covered
- 5 The content delivery and instructional methods
- 3 Whether your learning expectations were met
- 4 Usefulness/applicability of information
My favorite section of the day was called “Impact Investing” which was led by Kipp Baratoff. Kipp told the class that “the financial sector creates products too” and he explained that today institutional investors are driving clean tech that result in environmental social change. He cited the book “Crossing the Chasm: Marketing and Selling High-Tech Products to Mainstream Customer”, written by Geoffrey Moore that focuses on the specifics of marketing high tech products during the early start up period. Kipp said Moore’s exploration and expansion of the diffusions of innovations model has had a significant and lasting impact on high-tech entrepreneurship.
Kipp told us that when he started as CFA in 2004 there were only 30 venture capitalists involved in clean tech and virtually no expertise at any of the major investment firms, however today (2011) all major Investment Fund Managers has someone who knows about triple bottom line companies and clean tech/clean energy investing. He touched upon the tax equity-based finance model that is helping to drive renewable energy (RE) and energy efficiency (EE) programs & projects in America.*
I like the interactive sections of the workshops
The afternoon session started with a visit from Aaron Berg who is CFO for Clean Energy Works Oregon (CEWO). Clean Energy Works Oregon is public-private alliance with Energy Trust of Oregon, local utilities, financial institutions, local communities and contractors. CEWO is a non-profit program established to reduce energy waste by encouraging homeowners to take direct action. Aaron told us the CEWO goal is to transform/retrofit at least 6,000 homes in three years.
CEWO began as a pilot program in the City of Portland when it was awarded $20 million from the US Department of Energy to expand beyond Portland. This additional funding extends to thousands of participants in both metro and rural Oregon who need to finance and install energy efficiency upgrades. Homeowners can now access the financing and expertise required for energy efficiency home improvements such as new insulation or the installation of a high efficiency furnace or water heater.
Aaron presented this as a real-world example of a program that shows how private and public sectors can join together with a community improvement program responsible to a triple bottom line of benefits which include:
- Financial – provides capital for thousands of homeowners in Oregon.
- Social – creates family sustaining jobs in our local area.
- Environmental – reduces energy waste and carbon pollution in our communities.
Want more? See http://www.cleanenergyworksoregon.org/
Following the guest speakers, the instructor walked us through the various financing schemes that are being used today to fund clean energy projects. He told the “story of project financing” and presented current methods being deployed such as the Power Purchase Agreement (PPA), Feed-in-Tariff (FiT) model, utility rebates, and other third-party financing deals. Of course all of these are part of the present-day solar business landscape so I knew as much, or possibly more, about these things than the instructor, so I added my voice to this discussion.
One idea new to me was the topic of “program related investments” (PRI) which are alternatives to grants, loans, and other traditional financing tools for renewables. The concepts of Mission Capital Spectrum and the Cost of Capital was familiar, but was presented in a new and more enlightening way by the instructor. The course interactive sections were both hit ‘n miss. I think most of us enjoyed the activity whereby we divided the class into three groups and Aaron directed us to gather by three white boards:
- Non-profits (NPO/NGO)
- Government (Public)
- Enterprise (Private/Corporate)
We were asked to draw an animal that best represented one of the other groups. I joined the NPO group and we were given the challenge to draw an animal that most represented the private enterprise sector animal and provide a list of characteristics that described both that kind of organization and that particular animal. One of my cohorts immediately shouted out “Hyena” so I grabbed the pen and did my best to draw a hyena. Then we listed out the animal’s characteristics such as: opportunistic, resourceful, carnivorous, vicious, and a scavenger. I was careful to draw in sharp teeth, a laser-like stare, and a bit of a drool. [I couldn’t help myself and drew in road-kill that our hyena was ready to devour!]
The government (public) group chose the Salmon to represent the NPO/NGO; and the business group drew a Hippo [mostly underwater] to depict government/public organizations. The list of characteristics were stereotypical of how most of us see these organizational structures, but the exercise was valid in that we became aware of how these views distort our ability to work together on common goals and objectives.
The “Fun with Spreadsheets” activity, with purpose to help students better understand accounting and finance terms and principles, was a good basic-level exercise. The problem for most of us was interpreting the data, which was entirely the point of the exercise, and I learned a thing or two even though I’ve seen my share of P&L and financial statements.
Room for Improvement
While I fully understood why Aaron James began the day with some accounting basics and explanations of the differences between accounting and finance, I felt it was mostly a waste of time for many of the attendees, myself included. I felt this info could’ve been dealt with in just a few slides and not taken up the bulk of the morning’s discussion.
The “Buzzword BINGO” activity was not well received or effective in part because other UO SLP instructors have used this same methodology with much more vigor and purpose. I’d suggest the instructor to better utilize this activity or eliminate from the course entirely.
The instructor ended the day as it began, with a tie-in between finance and sustainability. His quote…
“Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs.”
Aaron pointed out that finance compares value in the present (NPV) with value in the future in the context of uncertainty and risk. Therefore, he asserted, finance has everything to do with sustainability. After my own personal experiences over these past several years working in the solar sector, I certainly concur.
Aaron James’ profile: : http://sustain.uoregon.edu/workshops/reg_instructor.php?instructorid=605648
Kipp Baratoff’s profile: http://sustain.uoregon.edu/workshops/reg_instructor.php?instructorid=605650
Aaron Berg’s profile: http://sustain.uoregon.edu/workshops/reg_instructor.php?instructorid=605649
If you’d like to read what I wrote last year see … http://solarflareblog.com/?p=810
* Note: As the day progressed, I wondered – if tax equity financing is the method created, or preferred by impact investors, institutional investors, financial strategists, and government policy-makers in order to develop and expand renewable energy programs in America – then why is there such a backlash against these methods or policies?
Is it that they aren’t fully explained or vetted? Is it that they involve a minority of participants? Is it an equality issue between the haves and have-nots? Whatever the reason, it is clear that if one follows the money it is now beginning to flow into “green tech” businesses no matter what the common man/taxpayer thinks is right or reasonable.
Just food for thought!
Share on Facebook