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Efficient Employees

Stanford grads combine workplace benefits with reducing carbon emissions.
Scope Zero’s Carbon Savings Accounts allow employees to purchase home technology and transportation upgrades that reduce their utility bills, fuel purchases, and carbon footprint. PHOTO: Pixabay

Congratulations! You’ve been hired for a new job. As you review your benefits package, you see it includes health and dental insurance, vacation and sick leave, a 401(k) retirement plan, and something called a Carbon Savings Account™ (CSA) that piques your interest.

The CSA is similar to a health savings account, you learn, only geared for purchases that reduce your energy and water use instead of health expenses. Once enrolled, you contribute a small portion of each paycheck to your CSA, and your employer matches these contributions.

You can use the CSA benefit to proactively upgrade your home and vehicle, or you can gradually grow a rainy-day fund so that it’s ready when you need it most—say, that fateful day in August when your air conditioner sputters its last. The CSA lowers your cost of living and your carbon footprint, and to this you nod with satisfaction, reminded again of why you applied with this company: To align your values with your 9-5.

This is the vision brought to life by Lizzy Kolar, MS ’21, and Kaitlin Highstreet, MS ’22, creators of the Carbon Savings Account and cofounders of Scope Zero.

“Now is the perfect time for companies to offer a CSA to their employees,” says CEO Kolar. “Hybrid and remote work, combined with increasing utility rates, have caused significant spikes in residential utility bills for employees. The CSA is the easiest thing a company can do to provide for its employees while simultaneously addressing its corporate responsibility goals,” she says.

For example, 42 percent of the world’s largest companies, called the Fortune Global 500, have committed to a significant climate milestone by 2030, up 11 percent from the previous year, according to Climate Impact Partners. (You can see the climate targets in this infographic by the Visual Capitalist.)

Likewise, the market for carbon offsets is expected to grow from $2 billion in 2020 to around $250 billion by 2050, according to Morgan Stanley Research. Businesses such as Native and Cool Effect are helping customers purchase offsets through funding forestry projects and land conservation. Others focus on more niche markets, such as Terrapass, a service for air travelers.

What Scope Zero offers is a more direct approach: The practical nuts and bolts of personal finance. The venture calculates that the average American household can save about $1,500 on utility bills each year by upgrading to more efficient home technology.

And as the pandemic has softened the lines between corporate workplace and personal housing, today calculating a company’s carbon footprint is at once blurrier—and more interesting. Commuting down the hallway, rather than the highway, has shifted energy use, and the associated carbon emissions, back home.

“Work-from-home emissions were effectively negligible five years ago, but now they can be quite significant in terms of a company’s overall footprint,” Kolar says.

Crossing paths

Lizzy Kolar, Cofounder

The cofounders met in Stanford’s Sustainable Design and Construction  (SDC) program within the Department of Civil and Environmental Engineering.

Kolar grew up in West Virginia, coal-mining country. Many of her community members couldn’t afford to keep the heat on through the Appalachian winters, nor could they afford the home-efficiency upgrades that would have reduced their utility bills. Ironic given their livelihoods powered so much of the United States.

As of 2020, there were still 34 million households classified as energy insecure by the U.S. Energy Information Administration, or about 27 percent of all U.S. households.

Kaitlin Highstreet, Cofounder

“I don’t think I heard the word ‘sustainability’ until I was 20 years old,” says Kolar.

She saw the mining pollution in her home state as problematic, but she didn’t gain the vocabulary to describe it until college. Her studies in mechanical engineering drew her toward energy, and early in her career she lived in Sierra Leone designing a solar microgrid project and then later advising on water- and energy-efficiency upgrades for U.S. military bases.

By contrast, Highstreet spent her childhood in the Bay Area, her interest in nature conservation emerging from her love for the outdoors. She led backpacking trips in the High Sierras as a guide with the University of California, Los Angeles, while earning degrees in business economics and global studies, and traveled extensively through South America before trading her hiking boots for jobs in tech, first at a supply chain startup and later at a 401(k) company.

“I was really in the weeds on 401(k) compliance, error corrections, and the nitty gritty details of how employee benefits work,” she says.

Highstreet soon found that her new friend in the SDC program, Lizzy Kolar, was fascinated with this expertise.

“One day Lizzy was asking me every question under the sun about 401(k) administration,” she says, well past the point of polite conversation. “Finally I asked her, ‘What’s your angle here?’”

And that’s when Kolar shared her idea about promoting efficiency upgrades through the tried-and-true template of a workplace benefit. Two weeks later, they applied to the 2021 Kellogg-Morgan Stanley Sustainable Investing Challenge with the concept, and placed as finalists.

Buoyed by the competition, the duo applied for an Innovation Transfer grant from the TomKat Center for Sustainable Energy that fall and incorporated as a company in January 2022.

“TomKat was our first money in and was completely game-changing for us. We were able to write our first lines of code because of their support,” says Kolar.

No-brainer savings

Highstreet, who is today chief operations officer of Scope Zero, says the goal is to ensure that choosing the most efficient, CSA-eligible upgrade is easy. “It’s really about how do you make home tech and personal transportation upgrades a no-brainer for employees?”

Scope Zero’s CSA platform allows businesses to track energy, water, and carbon savings for their environmental, social, and governance (ESG) metrics, while also connecting participating employees to vendor discounts and tailored advice.

“Here are 30 models we recommend. Here’s $1,000 you’ve set aside from paychecks over the past year. Here are the rebates you’re eligible for,” says Highstreet. “Go.”

By providing strong financial incentives, Scope Zero can reach a wider audience that includes those keen on climate solutions, as well as people who simply want to spend less on bills. The venture’s approach also improves equity in access to these upgrades.

Scope Zero calculates that as an employee benefit within the United States, the CSA has the potential to reach 72 million full-time employees and annually save $110 billion in residential utility bills and $125 billion in fuel spent on personal transportation. The resulting environmental impact is equivalent to removing 150 million cars from the road.

“We are a financial wellness benefit. We are also a green benefit,” says Kolar. “One of the biggest compliments we receive is, ‘How does the CSA not already exist?’”

This article is part of the TomKat Center Spotlight series designed to highlight the impact and trajectory of the work of faculty and students who received funding through our Innovation Transfer Program, TomKat Solutions, and Graduate Fellowships. Stanford University does not endorse any non-Stanford entities, programs, products, or services listed in the article.