Introduction

Many employees appreciate the flexibility of hybrid and remote work, but this new norm doesn’t come without its costs. Working from home increases the average U.S. resident’s utility bills by up to 20%. Energy and water that was previously consumed under one roof of a company’s office building during the workday is now distributed among individual homes, and employees are paying the price.

Unfortunately, the costs of remote work are exacerbated by the fact that most U.S. homes have outdated and inefficient appliances, heating and cooling systems, light bulbs, and plumbing fixtures. With just simple upgrades to more efficient appliances and devices, Scope Zero’s calculations show that the average U.S. home could cut its utility bills by 50%.

Even for employees that commute to work, the costs of commuting have increased as gas prices continue to go up. Almost 140 million people in the U.S. routinely commute to work. The average U.S. resident spends 54 minutes per day on their round-trip work commute, with the large majority of these people commuting solo in their gas-powered cars.

WIth so many increased costs to employees in both remote and in-person work settings, companies have a unique opportunity to help their employees reduce their cost of living tied to their home office or method of commuting. By helping employees make intentional home technology and personal transportation efficiency upgrades, employers can create a better work experience for their employees that has positive financial and environmental outcomes.

I’m excited to introduce this edition’s contributor, Lizzy Kolar, co-founder and CEO of Scope Zero. Lizzy, over to you!

Thanks, Nell! I’m Lizzy Kolar, co-founder and CEO of Scope Zero. At Scope Zero, we created the Carbon Savings Account (CSA). Think health savings account (HSA), but for home technology and personal transportation upgrades that can save each employee over $5,000 per year. The CSA serves as an equitable and intentional employee engagement, attraction, and retention solution, all while driving progress and reducing costs around corporate environmental, social, and governance (ESG) goals.

Growing up in West Virginia, one of the poorest states in the U.S., many members of my community were part of the one-third of U.S. residents that can’t afford their utility bills, let alone the efficiency upgrades that would make these bills more affordable. This inspired me to work as a mechanical engineer at Ameresco, where I designed energy-efficiency and water-efficiency upgrades for housing units all over the U.S.

During graduate school at Stanford University, I met Scope Zero co-founder Kaitlin Highstreet. Kaitlin developed an expertise in employee benefits during her time at Guideline, a 401(k) provider. We combined our backgrounds in employee benefits, residential utilities, and corporate sustainability to create the CSA, with the ultimate goal of providing positive financial and environmental outcomes for employees and employers alike.

The Financial and Environmental Alignment Among Employers and Their Employees

Since the start of the COVID-19 pandemic, several financial and sustainability trends have surfaced for employees and employers:

Employee financial trends

1. Residential utility bills have significantly increased with hybrid and remote work.
2. Household budgets are tighter due to post-pandemic inflation.

Employee sustainability trends

1. More people care about what they can personally do to contribute to a healthy planet.
2. Workers are demanding that their companies demonstrate a commitment to a healthy climate.

Employer sustainability trends

1. There has been a massive shift from office building emissions to work-from-home emissions.
2. Corporations need to pull every lever they can to meet their aggressive climate and net-zero carbon emissions goals.

Employer financial trends

1. Corporations are searching for creative solutions to finance their climate and net-zero carbon emissions goals.
2. Companies are streamlining and modernizing their benefits packages to attract and retain the best talent.

As these realities continue to persist, we are seeing a spike in demand for a solution that can address financial and environmental wellness in the form of an employee benefit. The standard benefits package should no longer include just health care and retirement benefits, but also an offering that can provide immediate and long-lasting financial and environmental wellness.

This is why Scope Zero created the CSA, which ties all of the above trends together into a simple, familiar employee benefits framework that empowers employers to provide financial and environmental savings for their company, their employees, and the planet.

The Carbon Savings Account

The CSA is similar to an HSA. Instead of using the funds for eligible health care expenses, employees use their CSA funds for eligible home technology and personal transportation upgrades that reduce their utility bills, fuel expenses, and carbon footprint. The savings in utility bills and fuel expenses from CSA upgrades can reduce the cost of living for the average U.S. household by over $5,000 per year.

How the CSA works for employees:

1. Employers provide funds for employees to purchase home technology and personal transportation upgrades such as a smart thermostat, low-flow showerheads, or electric vehicles.
2. The CSA platform provides customized upgrade recommendations based on employees’ budgets and goals.
3. Employees’ home technology upgrades reduce their utility bills while increasing the value of their home. Their personal transportation upgrades reduce their fuel expenses.

How the CSA works for employers:

1. The employer sponsors the CSA benefit and contributes funds toward employees’ CSA purchases.
2. Employers attract and retain top talent while directly reducing their work-from-home and commute emissions (through an ESG lens, these emissions are called scope 3 emissions).

How Employees Benefit from the CSA

Once an employee signs up for the CSA, they can access several financial savings opportunities and logistical planning tools that simplify and accelerate the process of home technology and personal transportation upgrades.

Financial Benefits

The largest barrier to home technology and personal transportation upgrades is the upfront cost of the upgrades. The CSA reduces these upfront costs for employees by facilitating employer contributions, surfacing hard-to-navigate utility and government incentives (such as rebates and tax credits for CSA-eligible purchases), and providing discounts from Scope Zero’s partner vendors.

Many utility companies and governments provide rebates and tax credits for certain types of efficiency upgrades, which can save employees thousands of dollars on CSA-eligible upgrades. However, these incentive programs can be extremely confusing to navigate. The CSA platform simplifies this process for employees so they can take advantage of all the “free money” that is available to them from their utility companies and governments.

Our partner vendors are listed in the marketplace feature of the CSA platform. These vendors include companies that sell or install CSA-eligible upgrades. By having vendors and their products all in one spot, the CSA streamlines the shopping and upgrading process for employees.

Logistical Benefits

Another major barrier to home technology and personal transportation upgrades is understanding which device is going to be best for certain climates and use cases. There are countless products and vendors to choose from, so the process of shopping for the best product and best deal can be overwhelming for people who don’t have the time or interest to be home technology experts.

The CSA platform eases the logistical burden of home technology and personal transportation upgrades. Our customized upgrade recommendation engine considers each employee’s existing home technology, climate, and budget to direct employees to products and vendors that will be best for their situation.

The CSA platform has interactive savings calculators so employees can see estimated savings from different upgrade scenarios. We also provide guidance around the optimal order of upgrades. For example, the average U.S. household should first upgrade to low-flow showerheads and sinks before they upgrade to an Energy Star water heater. By first reducing their hot water demand, they can then save money by purchasing a smaller, less expensive water heater.

HR Outcomes

By offering the CSA as an employee benefit, HR departments improve their hiring strategy, employee turnover rate, and employee satisfaction. Because these improvements cut costs for HR teams, the CSA is able to drive financial savings for their company while establishing a mission-focused culture.

Employee Hiring

About 83% of employees think their current employers are not doing enough to mitigate climate change. By showcasing the CSA during the hiring process, recruiters and hiring managers can demonstrate their commitment not only to the well-being of their employees, but also to the well-being of the planet. The CSA differentiates a company’s benefits package to attract top talent.

Employee Retention

The CSA is one of the most equitable benefits a company can offer because it can meet any employee where they are with their personal home and transportation setup. The CSA attracts workers of all backgrounds: people that live in urban and rural settings, people that live in red and blue states, people of all ages, and both renters and homeowners.

Because of how universally useful the CSA is, it’s able to serve as an effective and widespread employee engagement tool. The CSA fosters collaboration between the company and their employees that builds loyalty and trust, extending the duration of employment for each employee.

Corporate ESG Outcomes

ESG reporting is used to evaluate a company’s ethical and sustainable practices. Many companies with ESG goals measure their carbon emissions and create strategies to minimize these emissions.

With increasing pressure from customers, employees, investors, and government, it is becoming imperative that companies adopt robust ESG programs. Whether a company is just starting to lay out its ESG strategy or whether it is far along in the ESG journey, the CSA is a useful solution that can accelerate ESG impact.

Reporting      

When a company measures its carbon emissions, it looks at everything: how many emissions are created from powering its office buildings and manufacturing its products to how many emissions are created from employees’ cars on their commute to work or from employees’ electricity consumption when they’re working from home.

Work-from-home and commute emissions typically make up a significant percentage of a company’s overall carbon footprint. Historically, these emissions have been difficult to measure and reduce. For example, commute emissions are difficult to measure because each employee has a different commute mode and distance, and ESG leaders would have to regularly survey every employee to understand their commute emissions.

The CSA platform automates the measurement and reduction of commute and work-from-home emissions. These metrics can then be fed directly into a company’s ESG reporting and branding to demonstrate the company’s commitment to its employees and to the environment. This reporting automation can drastically reduce time commitments and costs for ESG teams as they tackle commute and work-from-home emissions.

Results

Even for companies that are not yet measuring their commute and work-from-home emissions, the CSA accelerates progress in other areas of corporate sustainability efforts. First, the CSA makes sustainability personal and tangible to each employee. This increases employees’ awareness of how they consume resources. Employees then report that they interact more sustainably with everyday resources based on what they learn from the CSA platform. Employees carry over this knowledge to their workplace.

With more employees caring about and understanding wise resource consumption, the CSA brings everyone at a company on board to work toward a more resource-efficient and cost-efficient workplace. This collaboration results in operational savings for the company and accelerated progress toward corporate ESG goals.

Conclusion

If every employee in the U.S. that is offered a 401(k) is also offered a CSA, employees could collectively save over $300 billion per year in utility bills and fuel expenses, which would be the environmental equivalent of removing 125 million cars from the road. The CSA drives positive financial and environmental results for any company and for any employee.

With hybrid and remote work here to stay, with growing interest in sustainability, and with increasing stress on personal finances, now is the time for companies to offer the CSA to their employees. The CSA is the most impactful solution a company can adopt for financial and environmental wellness. With individuals and corporations working together toward financial and environmental wellness, we are optimistic about a healthy future for our people and our planet.

References and Further Reading

Thanks for joining us for this edition of the SHRM Labs WorkplaceTech Pulse, and thank you to Lizzy for her incredible insights on how to drive financial and environmental wellness. Please visit Scope Zero’s website to learn more about the work it is doing. We will see you next time!

Scope Zero created the Carbon Savings Account. Think health savings account, but for home technology and personal transportation upgrades that foster employee financial wellness and accelerate corporate environmental, social, and governance goals.