Carbon Lighthouse, a clean energy services company that works with commercial and industrial building owners and hotel investors to reduce the baseline energy consumption of real estate, is rapidly expanding its services across the country. Founded in 2010, the company began with an office in San Francisco before branching out and establishing regional offices in New York, Honolulu, and, just last month, Los Angeles. What these key real estate markets have in common is a combination of rising utility costs and a commitment to lowering carbon emissions, explains JJ Steeley, the company’s executive vice president of customer experience. LODGING caught up with Steeley to discuss the company’s strategy for scaling up, how it stays abreast of emerging technologies, and its engagement with the hotel industry.
What kickstarted the company’s growth and why was it time to add a new office?
If you look at all four of those places where we’re located, those are all geographies with a high density of real estate that is exposed to high and increasing utility rates. These are geographies where we have a real, meaningful ability to impact the expense line for energy. They are also places where people are more actively aware of climate change and the need for industry and individuals to take action.
How has Carbon Lighthouse been working to scale up its operations?
We’re certainly right in the middle of that hockey stick of growth, which is exciting and very tough. Now we’re close to 100 employees. We designed our company from the beginning to have this level of growth because our founders—Raphael Rosen and Brenden Millstein—want nothing other than to be a gigantic energy company that’s literally taking the trillions of dollars generated by the oil and gas industry and turn it into clean energy or reduced energy consumption. They designed this from a living room with every single best practice. We have an incredibly powerful group of investors and advisors who have given us a lot of instruction on how to build scalable processes and how to scale our culture.
We’re also very close, even at our size. We spend a lot of time in retreats where we build trust and empathy with folks across the different functions—whether software programmers or salespeople. When we’re in the trenches doing something really hard, it’s a very politics-free environment—everyone is just focused on the win, and very kind and human about how to go for it.
What impact do new technologies have on Carbon Lighthouse’s approach? How do you make sure you’re quick on your feet in adopting those?
We don’t actually manufacture or make anything—what we do is we make everything else inside of a building work better. We have a whole group called the “Building Innovations Group”—or “BIG”—and they’re constantly researching either commercial innovations or ideas that come out of academic institutions or national laboratories. Then, we run simulations of those new technologies in-house and start to integrate them into our client’s site. We’ll grab at anything that we think can help us reduce energy consumption within a cost that makes sense for a real estate owner. For example, we’re not yet able to make batteries truly make sense in commercial real estate, but we’re constantly remodeling it as the costs come down and the capacities go up. We integrate whatever makes sense from an energy and returns perspective.
You also recently became a member of the American Hotel & Lodging Association. What made you decide it was time to join AHLA?
I have a hospitality background. I came from what was formerly Commune Hotels + Resorts, which merged with Destination Hotels and Resorts to become Two Roads Hospitality and is now a part of Hyatt, so I’ve been very excited to help this company look at hospitality as an industry that not only bears a huge amount of responsibility for carbon emissions, but also can have some challenges around adopting new technologies.
One of the reasons we’re excited to be a part of AHLA is having access to folks who are shaping future trends in hospitality. We wanted to be a part of that conversation because what happens five years from now is really shaped by the organization.
What do hotel owners need to know about sustainability today?
Sustainability is now deeply embedded in success for individual hotels, hotel ownership groups, and flags. Even in the last 12 months, carbon emissions have had a greater influence over how group businesses choose where to book meetings or ongoing room blocks. Something that might have once been a window-dressing kind of question on an RFP is now clearly becoming a driver of choice on who to do business with.
In addition, the cost of development, the cost of labor, and the cost of utilities are making it harder and harder for owners. We’re so backed into a corner that these externalities are going to force the hotel business to re-examine how it operates. Sustainability—which used to be a nice, guest-driven message—is now going to be indispensable in actually operating a profitable business.