Changemaker: Reducing Emissions, Fighting Climate Change

“Our mission is to drive massive action across whole portfolios of buildings all over the world.”

January 24, 2023

| by Kelsey Doyle

It’s not uncommon to see an office building’s lights still on at night, long past when the last worker has left. In these same, sometimes empty buildings, heating or cooling systems are often running as well, making the temperature more comfortable… for no one at all. These “always-on” practices contribute to the roughly 40% of emissions Produced by commercial and industrial buildings.

Changemakers

In this ongoing video series, we showcase Stanford GSB alumni who are striving to change lives, organizations, and the world.

“The less energy a building uses, the less power plants operate. Pretty simple” says Brenden Millstein, MBA ’10, who started CarbonLighthouse with his best friend since kindergarten, Rafael Rosa. The duo studied physics, and were lab partners, at Harvard. They knew they wanted to one day launch a venture that would reduce the effects of climate change. The science-side of the venture didn’t propose too much of a challenge, it was the business side they were concerned with. “We figured, ‘OK, we can figure out the technical stuff. We better start with sales to make sure that part works,’” Millstein says.

CarbonLighthouse provides software that makes decarbonizing buildings profitable for commercial real estate investors. In the 10 years since its inception, the venture has worked in nearly 1,400 buildings and with clients such as Goldman Sachs, Ohana, and The Carlyle Group.

“You don’t need construction, just sensors and controls to make sure things are off when they should be off,” Millstein says. “Our mission is to stop climate change. It is to drive massive, massive, massive action across whole portfolios of buildings all over the world.”

The company has also eliminated the emissions of 34 power plants. “I am very pleased with the path I have chosen, despite the fact that it has been ridiculously hard. There’s not a night I go to sleep and I wonder if I’m doing the right thing with my life.”

Full Transcript

Brenden Millstein: If we achieve our corporate mission, we will be a multi-billion dollar entity that is responsible for less death and destruction from wildfires and hurricanes and floods. Tropical diseases are actually quite related to climate change. So I see Carbon Lighthouse as very in line with the change lives part of the GSB mission of change lives, change organizations, and change the world. That is all exactly what we are trying to do. Our customers control one and a quarter trillion dollars worth of commercial real estate.

These are smart people. They wanna leave a world that’s habitable for their children and grandchildren. They’re out to try and do the right thing, uh, but they’re also in a bind, which is they are legally beholden to try and increase returns for shareholders. And what Carbon Lighthouse is able to do is both reduce emissions, but also show that this is not just possible but profitable. And that’s new. That’s not a paradigm that the investment world is used to. And so to show that it’s actually very profitable to do something good for the environment creates a paradigm shift.

Globally, 40% or so of emissions are from commercial and industrial buildings. 70% of buildings are investor owned buildings. So these are buildings that have a landlord and they lease out space to tenants. So the low-hanging fruit is typically your lighting retrofits. So this is, you walk into a building, you look up, you see if it’s LED lighting. If it’s not, you replace it with LEDs. A commercial office building that might cost 300,000 bucks and save a hundred thousand a year. So 33% return, you know, three, four times better than the stock market. HVAC optimization is the art, or in our case, automated science of slightly turning fans up and down and boilers up and down to reduce energy use across the system as a whole. So you don’t have to replace any major equipment. You don’t need a crane, you don’t need a permit, you don’t need construction, just sensors and controls to make sure things are off when they should be off. And, uh, tune and optimize the system as a whole. Our mission is to stop climate change. It is to drive massive, massive, massive action across whole portfolios of buildings all over the world.

GSB and actually Stanford as the broader university as well were hugely helpful in this pursuit. For a lot of different reasons, venture capitalists love high risk, high reward opportunities. That’s what they exist for. And GSB connected us to a ton of investors who have supported the company. My colleagues and friends from GSB have given us intros to customers. So the whole university and GSB machine really kicked into gear to support the growth of the company over the years.

At the risk of being preachy, I do have a piece of guidance for current GSBers, which is: make your life matter. At the point you have gotten into and are attending GSB, you are now one of the most well-resourced people in the world. Go out on a limb and do something that is not the standard. Go save the world. I am very pleased with the path I have chosen, despite the fact that it has been ridiculously hard. But there’s not a night I go to sleep and I wonder if I’m doing the right thing with my life. My name is Brenden Millstein. I am co-founder and president of Carbon Lighthouse.

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