Pursuing sustainability initiatives has long been a priority for higher education institutions and non-profit healthcare systems. However, achieving ambitious sustainability goals in these sectors has unique challenges, including constrained budgets, competing leadership priorities, and the complexities with aligning diverse stakeholders. In September 2025, as part of NYC Climate Week, RBC Capital Markets hosted a roundtable conversation with sustainability leaders from higher education and non-profit healthcare. We explored the current state of sustainability in these sectors, the hurdles they face, and innovative solutions that hold promise, including the emerging model of Energy-as-a-Service (EaaS) partnerships. This thought leadership piece distills the discussion into three key takeaways, offering insights and actionable strategies for institutions striving to advance their sustainability agendas.
1. Framing environmental sustainability as financial sustainability
For many institutions, sustainability initiatives are no longer framed solely around environmental stewardship. Instead, they are increasingly viewed as a form of risk management, infrastructure resilience, and operational reliability. Non-profit healthcare systems, for instance, are recognizing the vulnerabilities tied to dependence on fossil fuels, including exposure to geopolitical disruptions and supply chain uncertainties. By prioritizing infrastructure resiliency and reliability, these organizations are identifying alternatives sources of energy to insulate operations from risks that could disrupt critical services.
Similarly, higher education institutions are grappling with volatile revenue streams, due to declining net tuition revenue and uncertain research funding. Sustainability initiatives, when aligned with financial strategies, can act as a hedge against these risks. For example, investments in energy efficiency and renewable energy can stabilize operational costs and reduce exposure to fluctuating energy prices. Institutions that integrate sustainability into their broader risk management frameworks are better positioned to weather financial and operational uncertainties while advancing their mission.
2. Sustainability professionals are brokers of cross-departmental collaboration
In today’s landscape of operational headwinds, sustainability efforts are increasingly intertwined with financial performance. A central insight from the conversation was the critical need to reframe sustainability as a driver of financial resilience—highlighting that environmental sustainability is, in fact, financial sustainability. By reducing costs and driving efficiencies, sustainability initiatives can serve as powerful economic levers for institutions navigating tight budgets and rising operational pressures.
A key strategy for success is breaking down silos and fostering collaboration across departments, particularly between sustainability, finance, and facilities teams. Engaging finance teams early and often is crucial to building a compelling business case for initiatives—whether through cost savings, revenue generation, or operational efficiencies. For example, the CFO’s office at an Ivy Plus, Private University is partnering closely with the facilities team to explore EaaS as a cost-saving solution, demonstrating how cross-departmental alignment can unlock financial and environmental value. Additionally, accessing capital through instruments such as green bonds remains prudent for treasury teams to consider.
In healthcare, partnerships with external stakeholders, such as engineering firms and non-profit organizations, has proven invaluable. These collaborations bring not only technical expertise, but also innovative financing models that can make ambitious projects feasible. As one participant noted, sustainability professionals need to serve as brokers of conversations, ensuring that CFOs and other decision-makers understand the strategic and financial benefits of proposed initiatives. By fostering a culture of collaboration and emphasizing the economic drivers of sustainability, institutions can uncover new opportunities to reduce costs, improve operational resilience, and accelerate progress toward their environmental goals.
3. Energy-as-a-Service (EaaS) partnerships offer flexible and scalable pathways to sustainability
Given the current fiscal environment, Energy-as-a-Service (EaaS) partnerships emerged as a particularly compelling solution for addressing the dual challenges of sustainability and financial constraints. EaaS is a partnership model that allows institutions to unlock value by implementing energy efficiency infrastructure modernization without the need for significant upfront capital investment. Instead, an engineering firm or third-party provider finances and manages the projects, guaranteeing cost savings and operational improvements over time.
How EaaS works
Under an EaaS arrangement, the third-party provider develops and executes a portfolio of infrastructure projects designed to enhance energy efficiency, reduce greenhouse gas emissions, and improve overall system performance. This structure is particularly advantageous for non-profit organizations, as it preserves their borrowing capacity for other critical needs.
In the recent Novant Health EaaS partnership, Novant Health partnered with an engineering firm to implement a series of energy upgrades. The projects were structured as a Special Purpose Vehicle (SPV), allowing the healthcare system to retain ownership of the assets and full responsibility for central utility plants, while transferring to the SPV the rights to jointly manage various Novant Health-owned thermal assets that produce and distribute essential chilled water and steam to its facilities for 30-years. Upon completion of these upgrades, Novant Health expects to reduce its energy utility expenses by over 24%, with a guaranteed minimum of 18% savings—equivalent to $558 million over the life of the partnership. These improvements also align with Novant Health’s broader decarbonization and sustainability goals.
Benefits of EaaS
- Cost savings and predictability: By outsourcing energy management to a specialized provider, institutions can achieve significant cost savings while gaining more predictable energy expenses. This is particularly important in the context of rising energy prices, which have escalated by as much as 50% in recent years.
- Risk mitigation: EaaS transfers performance and operational risks to the third-party provider, ensuring that projects deliver the promised savings. This risk-sharing model is especially appealing to institutions with limited internal capacity for managing complex energy projects.
- Alignment with sustainability goals: EaaS enables institutions to pursue ambitious sustainability targets, such as net-zero emissions, without diverting resources from other mission-critical areas. For example, some healthcare systems have leveraged EaaS to fund clean energy transitions, such as geothermal and thermal energy networks, while maintaining their focus on patient care.
- Flexibility and scalability: EaaS is a highly flexible model that can be tailored to meet the unique needs of each institution. Whether it’s reducing energy consumption, advancing sustainability goals, or addressing deferred maintenance, EaaS provides a scalable solution that evolves with the institution’s priorities.
- Competitive cost of capital: Recent transactions have utilized an SPV structure, allowing them to leverage the non-profit institution’s tax-exempt cost of capital and credit rating. While the cost of debt is expected to be approximately in line with the institution’s cost of capital, it does come at a 10-15 bps premium which has to be weighed in the context of the financing.
Overcoming barriers to adoption
While the benefits of EaaS are clear, participants acknowledged that there are barriers to adoption, including coordination required with facilities teams and concerns about ceding control to external providers. To address these challenges, sustainability professionals must build trust by demonstrating the financial and operational advantages of EaaS. Sharing case studies, pilot project results, and detailed financial models can help stakeholders see the value of this approach.
Moreover, institutions should view EaaS as a tool within a broader sustainability roadmap. By integrating EaaS projects with long-term plans for decarbonization and infrastructure optimization, organizations can maximize the impact of this innovative model.
Conclusion
The conversation underscored that sustainability remains both a critical imperative and a complex challenge. Institutions must navigate financial constraints, operational risks, and competing priorities while striving to lead on climate action. By reframing sustainability as a strategic risk management tool, fostering cross-departmental collaboration, and embracing innovative solutions like EaaS, these sectors can turn challenges into opportunities.
EaaS, in particular, offers a flexible and scalable pathway to sustainability, enabling institutions to achieve their goals without compromising their financial health. As more organizations explore this model, it has the potential to become a cornerstone of sustainability strategies in healthcare and higher education. By sharing insights and best practices, we can accelerate the adoption of EaaS and other transformative solutions, paving the way for a more sustainable and resilient future.
