Welcome to the Michigan Minds Podcast, where we explore the wealth of knowledge from faculty experts at University of Michigan. I’m Greta Guest, state communications manager, for the Michigan News office. 

Last January, president Santa J. Ono set the university on a path to imagine what aspirations the University of Michigan could achieve in the next 10 years. UM’s Vision 2034 is the outcome of the yearlong strategic visioning process that engaged more than 25,000 students, faculty, staff, alumni, donors, and local community members. 

UM’s vision to be the defining public university of our time, boldly exemplified by our innovation and service to the common good, outlines four areas where the university will make dramatic and focused impact; life-changing education, human health and well-being, democracy, civic and global engagement, climate action, sustainability, and environmental justice. 

Geoff Chatas, the university’s chief financial officer, is here to talk with us about climate action, sustainability, and environmental justice. Welcome to the Michigan Minds podcast, Geoff.

Geoff Chatas:

Thank you. Nice to be here.

When it comes to sustainability, where are we right now and where might we be headed over the next decade?

We are currently undertaking our committed plan towards carbon neutrality. It’s a daunting task, but it’s an important one that we have to continue. In May of 2021, the campus and the community agreed to approach our desire to get to carbon neutrality over time, and that’s what we’re implementing right now. That includes reducing our purchased electricity to net-zero by 2025, and establishing goals by 2025 as well, for a wide range of indirect emission sources. What does that mean, indirect? They call it the final phase of our commitment, which is, for example, when we all fly, the planes use carbon-based fuel in general, and that’s a problem. So that’s an example where we’ve actually bought biofuel for Delta to help them offset the carbon we’re using, but that’s a big challenge.

So having said that, what are we doing right now? Well, we’ve started a couple of major things. First of all, we’re launching geothermal installations on our campus. I will admit we’re a bit late to that, Greta, but it’s something we are really catching up quickly. So we’re investing in geothermal in the Leinweber building, the new computer science building, in the new dorm down on South 5th, and in the Ginsburg Center just as a start, but a lot more to come.

We’ve also started to install or invest in solar power on campus. We’re in the midst of a process right now to identify a provider to install about 25 megawatts on campus across the three campuses, I should say, Ann Arbor, Dearborn, and Flint. We’re also working on a 200 megawatt solar farm that’s going to be built outside of Ann Arbor but to bring direct power to us. So these are important steps as we go forward to make sure that we’re going to meet this goal.

The other thing is that every time we do a new building over $10 million, we do a carbon emission analysis and we say, what’s it going to take to get that building to carbon zero and how are we going to implement that part of the investment? So that’s a very new way for Michigan to build and make sure we meet those goals.

We’re also decarbonizing, excuse me, decarbonizing our entire fleet, our electric cars. We’ve had our first four electric buses and that’s ongoing. We’re hiring right now our inaugural Vice Provost for Sustainability and Climate Action, which will be very exciting. So we can marry both the work we do here in business and finance with the work that the provost is doing. So marrying what we’re actually building and research and engaging the community.

Finally, we are committing through our endowment to be net-zero in the endowment investments by 2050. Just over the last two years, we’ve invested over $420 million in sustainable energy investments.

Now that Vision 2034 is out, where might we be headed?

That’s a great question. The university will gain even more momentum through Vision 2034 and Campus Plan 2050, because both will incorporate carbon neutrality, sustainability, and environmental justice efforts in a range of important ways.

Today, the university offers more than 800 courses on sustainability and hosts more than 650 faculty across multiple disciplines conducting research related to sustainability. We have the potential to discover new technologies and generate just in sustainable solutions in a range of critical areas, which include energy, transportation, supply chain, food and water insecurity.

Campus Plan 2050 is designed to make Vision 2034 possible through all of the four impact areas, but especially sustainability. Sustainability will be a major aspect, whether it involves new buildings, an infrastructure, or updating existing buildings and infrastructure. This will allow us to use our campus as a living lab and what we learn here can serve as a model for the rest of the world. This is one of the best ways for our students to learn, Vision 2034 calls on us to prepare our students to become true environmental stewards and they will become the leaders we need to chart our future to 2034 and beyond.

So you mentioned the campus plan. How does our physical campus connect with our sustainability goals?

One example is new projects we’re looking at right now in the campus plan discussions, which include a potential hotel and conference center and an innovation hub for new types of research. We’re keeping sustainability at the forefront for both. We look at construction projects now and in the future, and this is the standard for us. If you’ve driven by the new pharmacy building, you’ve probably seen there’s a lot of timber going up. That’s an example of an early investment we’re making in how we can reduce the carbon footprint of our new buildings. We’re really planning through the campus plan to turbocharge that effort in the coming years.

I already talked about Geo-exchange, but there’s a lot more. Right now for those that don’t know, a high percentage of our direct emissions result from how we heat and cool our buildings, in particular, our research facilities and our residential buildings. Geo-exchange uses the steady temperature of the Earth’s surface to heat and cool buildings in a super-efficient way. It uses ground-source heat pumps to allow us to heat water in the winter and cool it in the summer. It has the potential when you link it with our solar investment, to greatly reduce our direct campus emissions.

I mentioned solar before. We’re pursuing these installations on our three campuses. Just to give you a sense, the current installation will generate enough power to generate the electricity needed for East Quad, what they consume 10 times over in a year. So it’s a huge step in the right direction to get us off the grid, where they’re using coal and natural gas and have locally based energy. So we’ll be exploring a lot of other approaches as well.

I have to say, as the CFO, a lot of people will ask me, doesn’t that cost a lot? Can we afford to do that? I don’t think that’s the right question. I think the right question is not how much it costs, but how do we get it done in a fiscally responsible way, recognizing the urgency we have today, to make sure we’re meeting our commitments towards carbon reduction and helping our environment. We’ve looked at a lot of creative ways, Greta, to make that happen. We issued our first green bonds, $300 million of bonds that are used exclusively for investing in green projects that will help us meet our carbon neutrality goal. We’ve also launched, the provost and I and Dr. Runge, a new renovation and rehabilitation fund for existing buildings where we’ll help the academic units invest in upgrades in their buildings to help meet this carbon neutrality goal. We have to be able to do both. We have to make this work be financially stable, which we are, and invest into our commitments in sustainability.

Are the university’s financial investments part of the sustainability strategy? If so, in what ways?

They are and it’s incredibly important, because when you think about our endowment, which as of now is in excess of $18 billion and we are investors in companies and countries across the globe and all over the US, it gives us the chance to make an impact. So it’s not just, did we divest from fossil fuels from coal and gas, which we have and we’re undertaking that. That’s important, but it’s equally, how have we invested in new technologies and solving problems? That’s what we’re working on right now. Our goal is to have our entire portfolio of invested companies be net-zero in the endowment by 2050. I’m pleased to tell you we’re ahead of that goal already, we think we’ll be there by 2030. That’s in part because over the last five years, we’ve invested about $750 million in climate solutions strategies over the globe, and we’ll continue to do that.

So we have a long-standing policy as you know, that our job at the endowment is to generate well-established risk-adjusted returns to fund our mission, to fund scholarships, and fund teaching and research, but we also are looking for opportunities for impact. So when the University of Michigan invests in a new technology for biofuel, for example, or for new technologies in a building, we’re helping make a tangible difference far greater than just the endowment’s investment. I think that’s incredibly important.

So one element of carbon emissions that gets a lot of focus is the transportation sector. You’ve talked a little bit about this already, but as we look ahead to 2034, are there changes that we can expect in terms of transportation and our campus emissions?

Transportation is a critical issue on campus and how we can do this in an efficient and sustainable way. As you probably know, you commute to work every day like I do, and whether we walk or drive or take the bus, it’s a challenge in Ann Arbor, and it causes great pollution. I also don’t know if you know, but on a given day on our campus, we move about 30,000 people plus on our buses. So we’re looking for solutions to be more efficient, to help reduce emissions, and get people off the road as best we can.

So our first step, we’ve had our first four electric buses. I just rode in one last week, they’re amazing, we’ll do more. We have an efficient charging station. Now with the solar power, when you think about the virtuous circle, then you’re going to be able to move people with electricity generated by the sun, powering the batteries that power the buses. But equally, we’re looking at, how do we connect our campuses? We call it the connector, and that’ll be a combination of looking at an automated transit system, which is a transportation system that’s on fixed guide way, not a rail, uses electric propulsion and operates without a driver, moves more efficiently, and has a very predictable schedule.

We’re also looking at our buses though and saying, how can we change our bus routes in the way we deploy these buses over time to make it even more efficient to move people across campus? I think this is really important because we’ve heard from across campus that moving people and mobility is a major issue. We want make sure we can do this in a thoughtful, thoughtful way. I look out my window every day and I see huge lines of people waiting for a bus and that’s not good for our students, our staff, and it’s not good for the environment either. So our first goal is to figure out, can we move people more efficiently and can we get people off the road, quite frankly, in cars? We think we can by combining these two types of transit modality.

We also want to try to think about how we can adjust parking to make it more efficient towards the ends of the campus while continuing to have parking in the middle of campus so that people can park, take this very efficient transport down and get to their job, and they need to know they can do that in a predictable way. So we’ll look at all this and we’ll continue to do more, but this is definitely area where you see Vision 2034 and the campus plan coming together.

The impact area from the vision that we’re asking you about doesn’t reference just climate action and sustainability, it also references environmental justice. Why is that important to our approach?

Honestly, it’s important to our approach because it’s important to thinking about who we are as an institution, as the people at that institution. We often are rushing. I keep talking about the urgency. I hear that all the time, we’ve got to get going, we’ve got to do more. That’s true, but we have to do it in a way that thinks thoughtfully about how it impacts people.

There is an example of in Flint, as you know, where they had their water crisis, where that didn’t impact people equally and the investments that were made were harder on those that were at the lower end of the income scale. That is a constant issue when you think about sustainability. I used to work pretty heavily in projects in Southern Louisiana and the same impact there. I recall people not focusing on, what will this do to the community if we put a liquid natural gas plant right here? Really with climate change and in changing weather patterns, you really need to think about that, and that’s what we’re working on here. We say environmental justice, that’s exactly what we refer to.

Michigan has a rich history of being very concerned about things like environmental justice and making sure the things we do help everybody and not just a certain part of the community or the nation. So that’s what we’re going to focus on, we’re going to work on that together. I have to say, it looks at things like, well, how do we buy materials? How do we participate in this energy transition? What policies will we put in place and what practices? How do we make sure that we’re thinking very carefully about its impact?

How would that approach apply to the University of Michigan’s Center for Innovation in Detroit?

Every building we build, we’re going to start looking at building codes. How do we think about what we use in a building, timber, new materials? Then as we’re entering into our existing communities and new communities like Detroit, how do we ensure that we have a building which is meeting our environmental goals, meeting our carbon neutral goals, but also becoming part of the community in which it’s being built to make sure that it serves as kind of a beacon, if you will, for solving problems and looking at new solutions. I think that’s really the thing that we need to focus on, which is, it’s not just the materials we use, but it’s also the impact of how we engage in our communities.

What type of investment approach will Vision 2034 require? Will it involve a complete shifting of resources?

As President Ono said in Vision 2034 report that he issued, the University of Michigan has sought solutions to our biggest challenges from its very beginning, Vision 2034 continues that tradition. We seek to be bold, we seek to find a call to action to find new ways to reassert the critical role of higher education in society. Yes, this will require changes in how we invest our resources. Obviously I focus on that every day in my job and that’s what we think about. How do we make sure we’re financially solid and how do we make sure we allocate those resources to these pressing problems? So I think it’s going to take new ways of thinking, I think we’re going to have to look at all of this.

Right now as an example, our AVP for Sustainability, Shana Weber, who joined us about a year ago, is doing a complete inventory of all our buildings, all our emissions, and looking at what is that investment going to require to meet that carbon neutrality goal? Then we’ll have to work on that together because it’s not just changing for its sake, it’s the existential crisis that we’re facing. We are going to have to make use of the financial advantages we have to deploy those investments in these solutions.

So we’re always open to looking at new ways to find solutions to work together and I think this is the way we’ve always operated. I’m reminded that Earth Day, which everybody celebrates, but something that grew out of an event here at our university, the first teach-in on the environment in 1970. I think we’ll approach resources the same way. We’ll look at what we are able to do today, what we’re going to have to think about in the future, and work together to make sure we can make these investments in a thoughtful way and one that allows us to reach these, what I would say audacious, but incredibly important sustainability goals.

Vision 2034 then is more of a shifting of resources and not necessarily something that will require a new budget.

I don’t think it’ll require a new budget, per se. I don’t know if it’s just shifting resources. I think it’s saying, what can we do today to look at the way we allocate some of those resources and what can we do to bring in new resources, whether it’s with partners or working with our donors or working with others to say, is there a creative way to approach this problem?

The Green Bond was one of those examples. I mentioned it earlier. So this is money that we’re able to borrow at fairly attractive cost, which is specifically used for investment in our facilities and our processes to reduce our emissions. I think you’ll see more things like that as we go forward, that’ll allow us to work together with others to make this possible.

Is there a particular total cost involved with Vision 2034? Do you have an estimate of how much doing all of these things will cost?

That’s a great question, and I’d say that’s the next step. So you’ve had a lot of discussions around these important themes, and each of these themes will require investment in people, in facilities, and in other things to make the outcomes possible. I’d say in the coming months we’ll be talking more about this as we begin the work of the various groups that look at these areas, we’ll begin to catalog the cost for each of these. As I said, this is something I focus on every day, and we’ll be working with the provost and with Dr. Runge and all other leaders, deans and others to say, let’s make a list of these things and then let’s begin to prioritize how and when we’ll invest.

Last year we launched the Capital Council the first time at the University of Michigan, where we’ve established a council to look at building projects. As part of that review, we look at not only the cost of the building, but how it will be built, the impact on our mission, whether it’s a student building, faculty building, staff building, you name it. As part of that review now, we include sustainability. So we’re looking at the impact of the building and the way that that building will help us meet our carbon-neutral goal. I think that’s an exciting moment for us to show how we can engage the whole community together to review projects and look at ways to make sure they help us meet our goals.

Any final thoughts, Geoff?

I hope you can hear how passionate I am about this. I think Michigan is really positioned to make a major difference. I would say that there’s some work to do today and a lot to do tomorrow, but I think this Vision 2034 process, coupled with our campus planning, is really giving us a great blueprint to focus on sustainability and everything we do to make sure that every member of our community is involved in this.

Thank you very much.

Thank you.

Thank you for listening to this episode of Michigan Minds, produced by Michigan News, a division of the office of the Vice President for communications.