Since its founding in 2013, Aspiration has aimed to help more people use their money for good — by spending, saving, and investing for positive impact through the bank’s financial programs and products. Founder Andrei Cherny sees Aspiration’s products — checking and savings accounts, credit cards, sustainable impact services for businesses — as a “sustainability as a service” model that amplifies its customers regular activities to help fight the climate crisis — and he has his eye on new initiatives to deepen that impact.
“We wanted to bring sustainability into people’s day-to-day spending and saving through features and services like ensuring deposits stay fossil fuel-free as opposed to what the big banks do with your money when they turn around and use those deposits to fund oil and gas projects,” he says. In addition to the consumer-facing sustainability tools, the company is also bringing sustainability to organizations of all sizes around the globe. Recently, Aspiration signed a partnership to work with the Boston Red Sox and develop solutions that will lead to the entire franchise becoming carbon neutral – including the players, the stadium, every game, and even the fans traveling to the games.
Aspiration has a two-fold system for its environmental impact: The company helps customers move their money away from oil and coal investments and pays to plant trees on behalf of its customers.. The work hasn’t been without its challenges, as recent news reports disputed some of the company’s environmental and customer claims. Cherny addressed those reports by noting that Aspiration is just one player in the systemic change needed to address the climate crisis, and its tree-planting efforts are a long-term initiative as part of its broader sustainability strategy.
Now, Cherny and the Aspiration team are looking ahead to the company’s move to go public this year through a special purpose acquisition company (SPAC) arrangement. In taking this step, Aspiration also is further committing to purpose-driven business by adopting the public benefit corporation legal structure that bakes in the company’s mission to benefit people and the planet while also generating profit.
“We’ve already been a Certified B Corporation for many years, but actually writing our mission into our charter through a public benefit corporation structure adds another layer of governance,” he says. “That being said, we have not found that there is an enormous tension between doing well and doing good. That's what we promise our customers when they open an account with us; it’s also what we believe we can deliver to investors.”
During a recent conversation as part of my research into purpose-driven business, Cherny told me more about new and future products, why environmental-minded products and practices are becoming the norm for more companies, and how Aspiration partners with others to go beyond greenwashing and create meaningful positive impact.Chris Marquis: Share a bit about the origins of Aspiration, and how the company has grown and expanded its services since then.
Andrei Cherny: We’ve been working on the issue of global warming, as we called it back then, and trying unsuccessfully to both get action at the U.S. and international level and to move public opinion on a threat that was at that point still very much off in the distance. Over the years we’ve tried a variety of things while using financial services to create awareness of the issue in people’s daily lives. We were of course even back then seeing the ESG revolution gather steam in the investing world, and it’s grown much beyond that over the years.
A relatively small number of Americans have a meaningful part of their financial life tied into investing. We wanted to bring sustainability into people’s day-to-day spending and saving through features and services like ensuring deposits stay fossil fuel-free as opposed to what the big banks do with your money when they turn around and use those deposits to fund oil and gas projects. We want to give people the ability to see their own personal sustainability score, so we built something called AIM, which is the Aspiration Impact Measurement, that allows people to see how their spending has an impact on people and the planet. And as we’ve continued to grow we’ve widened the aperture on what we provide such that we think of financial products maybe in the same way that Amazon thinks of themselves as an online bookseller.
That’s where we started, but we've really grown our services for consumers by building sustainability products and features on top of those financial products. That includes things like automated carbon offsetting for every mile that you drive in your car or planting a tree with every purchase. Then that grew over the past couple of years to take those same kinds of solutions to businesses — again, maybe in a similar way that Amazon developed its web services internally and then brought it to businesses. We’ve seen fast-growing demand from businesses that are taking action around climate to meet the expectations of their customers and their employees, and we’ve been able to meet that.
Marquis: What types of custom carbon solutions does Aspiration provide for major companies? How can scaling these types of solutions help create meaningful social and environmental action?
Cherny: We have been able to create a one-stop-shopping solution for companies that not only want to establish a credible net zero commitment or even more powerfully a climate positive commitment but want to do so in a way that allows them to embed that commitment into their day-to-day customer journey and employee experience. What we offer stretches from our ability to use technology to help them measure their carbon footprint to the manner in which they can mitigate that carbon footprint, whether it’s through planting trees all the way through to third-party verified carbon credits. Maybe most importantly we’ve been able to allow these businesses to tell their story to those consumers and employees. They’re really looking to them and asking what they’re doing when it comes to the climate crisis.
Marquis: It sounds like you’re networking and creating more collaborative impact as opposed to just focusing on your own products and services. Can you share a bit more on how partnerships and other collaborations help Aspiration create and expand its services?
Cherny: The exciting thing that we’re seeing is this dramatic growth of companies that are not just building sustainability into what they do but actually advancing the ball through their products and services. I think in some ways, this is the next stage. We saw a first stage of companies changing their practices to be better on ESG (environmental, social, and governance) metrics. We saw a second stage of companies where sustainability is a byproduct of what they're doing, be it clean energy or plant-based foods or electric vehicles. With Aspiration, sustainability is our product, it is what we're delivering to customers. Beyond that we want to be able to bring to our customers, be they individuals or businesses, the biggest set of tools that we can. So partnering with other banks or data providers or satellite systems tracking trees, or any number of other great companies out there allows us to scale and grow more rapidly.
To your question about the growth of this space, I think what we’re seeing there speaks to the fact that we’re very much in the moment where we now see about a third of companies focusing on environmental impact. Two or three years from now you’ll see the great majority of them having done so, plus many other public companies and private companies, all the way down to the corner mom-and-pop restaurant, because we are seeing this rising expectation. It’s analogous to what we saw in the early days of the Internet, when originally you saw dot-coms there and eventually just about every business decided it needed a website. We’re seeing that same kind of dynamic around sustainability. If Aspiration can not only lead in that space but also help to drive an ecosystem of companies, responding to this challenge and this opportunity, then we’ll be able to drive that transformation much faster.
Marquis: How will Aspiration’s governance/legal framework serve as a guide as the company goes public?
Cherny: We’ve announced that we are planning on going public later this year, and through that process announced that we will be actually changing our charter to be a public benefit corporation. We’ve already been a Certified B Corporation for many years, but actually writing our mission into our charter through a public benefit corporation structure adds another layer of governance. That being said, we have not found that there is an enormous tension between doing well and doing good. That’s what we promise our customers when they open an account with us; it’s also what we believe we can deliver to investors.
We are in this dramatic period of change, and that creates enormous economic opportunity. We’ve made no bones about the fact that we are a for-profit company that is looking to be a very valuable for-profit company. That is going to be part of how we meet the climate crisis. We need companies out there to be successful and to be able to make money, not just cutting down trees and destroying the planet, but in planting trees and saving the planet. That's going to drive the next wave of innovation beyond us.
Marquis: How does Aspiration ensure its products meet its claims and go beyond greenwashing? The B Corp Certification process is rigorous in tracking and measuring to make sure companies are actually doing what they say they are, but as you add products how do you make sure that everything you’re doing is on point regarding environmental and social commitments, particularly in light of critiques?
Cherny: It comes back to what we are offering to our customers as individuals or enterprises, which is knowing that when you open an account with Aspiration, or when you partner with us around our sustainability services, you’re getting the real deal. That’s core to our business, so it means we have to be thoughtful with our internal practices to make sure we're walking the walk in how we construct our products and uphold the promises we make to our customers. The concern around greenwashing is one of the biggest factors holding back many companies from engaging in this space. For instance, we’ve created an internal Aspiration standard around our carbon credit program that goes over and above the standard of the third-party verifying agencies, because we want to make sure that when you see that Aspiration name — in a business we’re partnered with or on your debit card or credit card — it’s synonymous with high-quality products that really do drive measurable and substantial positive change.
Marquis: What type of scale do nature-based approaches like Aspiration’s tree-planting projects need to reach in order to meaningfully address the climate crisis? How can programs like these be incorporated with other efforts to create broader, timely climate action?
Cherny: We’re very much a believer that there is no one solution to the climate crisis. That means that it’s not the responsibility of individuals or businesses or government; it’s not going to be solved by reduction or mitigation; it’s not going to be solved by nature-based options or technology. It needs to be all of those things if we want to have a fighting chance to stave off the worst of the crisis. Our work around tree planting has been part of that puzzle. So that has an impact, but we’re not stopping there.
We’re also engaged in other nature-based options, be they wind or soil. And as time goes on, we'll be able to provide other kinds of options as well, provided they can meet those same standards of high quality. At this moment, tree planting is the most scalable way to take action. That doesn’t mean that we can just plant trees and keep on doing what we've been doing as a civilization. But it does mean that if you want to take action today that is going to start bearing fruit in a few years, that is the key solution at this moment. We need to speed the adoption of other solutions as well.