Green gains: Companies integrate financial wellness with carbon savings perks
Some companies are empowering employees to play a more active role in curbing their carbon footprint while saving money.
They’re doing so by offering employees carbon savings accounts (CSAs), which allow employees and employers to contribute funds towards making homes (and by extension home-working) more energy efficient. Similar to health savings accounts and flexible spending accounts, CSAs can extend to upgrading cars, home appliances, heating and cooling systems, to make them more energy efficient, and over time, less costly.
It’s the latest spin on a new type of work perk, that unites two separate goals: assisting staff with financial wellness while ticking the corporate social responsibility box.
CSAs were created by startup Scope Zero, which launched in January 2022 and had its first Fortune100 company sign up this spring. Scope Zero partners with various green vendors to build a marketplace where employees can get these upgrades at a discount. That includes everything from Energy Star certified washing machines and refrigerators to LED light bulbs to smart irrigation systems and electric vehicles.
“The CSA is one of, if not the simplest thing, a company can do to provide immediate and long-lasting financial and environmental wellness,” said Lizzy Kolar, co-founder and CEO of Scope Zero. “Given where we are with the state of climate change, we need to pull every lever that exists to mitigate its impact as best we can.”
Kolar estimates that the average U.S. household can halve its utility bills by upgrading technology. Using a CSA, employees can save more than $5,000 per year, the company claims. The employee and employer both contribute funds to the account, which most commonly has a $1 match, up to anywhere between $300 and $1,000 dollars per year. Then those contributions go to a bank account that is under the employee’s name, and the employee has a CSA debit card where they can purchase CSA-eligible items.
It’s especially relevant with more people working from home. “On the employee side, financially, utility bills have skyrocketed with the shift to remote work,” said Mauro Cozzi, CEO and co-founder of carbon accountancy firm Emitwise. “Utility rates skyrocketed with the war in Ukraine and there’s a tighter household budget post-pandemic. But on the sustainability side, people are starting to care about what they can do to contribute to helping climate change and they want to work for companies that are demonstrating their commitment.”
Residential energy consumption accounts for 20% of the total carbon footprint, according to the Office of Efficiency and Renewable Energy. But it’s not cheap to upgrade a home with green energy.
Companies have tried various ways to tackle their sustainability goals, with attempts ranging from changes to office design with more energy efficient buildings, commitments to planting more trees, and transitioning to electric fleets. But endless platitudes about lofty corporate sustainability goals have led to accusations of greenwashing.
“This is a step beyond organizations investing in things like carbon offsets and tree planting, on behalf of the employee,” said Cozzi. “Sometimes when you hear of those programs, you get a little worried it’s more greenwashing than real action. But this is not only ‘what is my employer doing around sustainability,’ but it’s also helping the employee.”
But, Cozzi argues that companies shouldn’t start here and ask their employees to do the work if they aren’t doing the same work internally.
“I would be very disappointed if I saw a company that hasn’t even looked inwards to put renewable energy in their own offices before they start giving these tools for their employees to reduce the carbon footprint of their homes,” said Cozzi. “You have to first reduce your own footprint and then you can start supporting employees with their own personal footprints.”
Coreyne Woodman-Holoubek, founder of Progressive HR, agrees this could potentially be the next hot benefit, but education will be at the core of whether or not it gains traction.
“Even if an employer is focused on ESG and they bring this on, it’s not going to catch traction unless they educate their employees,” said Woodman-Holoubek. “It will only gain traction with the employees that are already environmentally conscious and actively looking for ways to be more green.”.
But Woodman-Holoubek still has a positive outlook on where this employee-directed benefit might head. “This is a win, win, win,” said Woodman-Holoubek. “You win for the company, because you’re helping lower their carbon emissions. You win for the employee because the employee is doing something better for the world and climate. And you win for the employee because they’re saving money.”