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Thursday, May 30, 2024

Aspiration Offers Banking Services To Help Consumers Meet Money Goals and Protect the Planet

Aspiration Recognized For Eco Friendly Banking Services
Andrew Allen

Written by: Andrew Allen

Andrew Allen
Andrew Allen

For nearly 20 years, Andrew has worked for financial institutions ranging from regional investment organizations to some of the largest banks in the world. At Wells Fargo, Andrew was a Consultant within the Insight and Innovation division. A graduate of the University of Georgia’s Terry College of Business, Andrew’s goal has been promoting personal financial wellness and solid money decisions. As a Staff Writer for CardRates, Andrew seeks to inform readers of solutions to help them on their path to financial freedom.

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Edited by: Lillian Guevara-Castro

Lillian Guevara-Castro
Lillian Guevara-Castro

Lillian Guevara-Castro brings more than 30 years of editing and journalism experience to the CardRates team. She has written and edited for major news organizations, including The Atlanta Journal-Constitution and the New York Times, and she previously served as an adjunct journalism instructor at the University of Florida. Today, Lillian edits all CardRates content for clarity, accuracy, and reader engagement.

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In a Nutshell: Business leaders who chase profits at the expense of preserving the environment may one day realize they can’t undo the damages they’ve inflicted on the planet. Aspiration is a financial services company that empowers its customers to build a more environmentally friendly future. The company incentivizes supporting businesses that value sustainability. Aspiration is committed to providing consumers with financial tools that combat climate change, a commitment that has earned it our Editor’s Choice™ Award for its sustainable banking products.

People living in the 20th century tended to take the planet’s health for granted more than their 21st-century counterparts. Many businesses of the time followed suit by prioritizing growth and profits over environmentally friendly initiatives.

But some companies operate differently in the 21st century than businesses did in the 1900s. Aspiration is a financial services company that provides its customers with products that suit their financial needs and allow them to help mitigate the impact of climate change. We spoke with Chad Hunter, Aspiration’s Senior Director and Head of Sustainability, to learn more about how the company helps protect the planet.

Aspiration logo

Hunter said Aspiration targets consumers who are concerned about the climate. He said approximately 100 million U.S. consumers say they are interested in climate-focused financial products, and 50 million Americans believe climate change is the most critical social issue in the country.

Hunter said Aspiration helps climate-conscious consumers align their spending and financial decisions with their values in a convenient and engaging way. He said Aspiration’s customer base is passionate about using its products to help the environment, and Aspiration’s product offerings align with its customers’ values. 

“From a carbon footprint perspective, the average American’s two biggest areas of carbon emissions are their banking and investing activities,” Hunter said. “A lot of people aren’t aware of that, which is surprising. As the world of carbon accounting has evolved over the last few years, it’s becoming really clear that an individual’s impact is very dramatic in those two areas. We provide convenient alternatives to help people reduce their impact on the environment.”

Aspiration offers consumers checking and savings accounts. Hunter said the core feature of Aspiration’s checking and savings accounts is that they don’t fund fossil-fuel activities. He said customers of traditional banks don’t realize that their deposits may fund activities that can harm the environment.

Innovative Products Fight Climate Change

Aspiration infuses its products with climate-oriented features that differentiate its products from those of its competitors. Hunter said the company’s customers can round up purchases made via their debit card to the next whole dollar amount, and Aspiration will use the rounded-up funds to plant trees around the world. He said the tree-planting efforts Aspiration manages also support the local economies in areas where it plants trees.

“This has been a product that really resonates with our customers and has had a huge impact on climate change,” Hunter said. “It’s a really convenient way for people to start taking action.”

Aspiration’s Planet Protection feature is triggered when customers use their Aspiration Plus debit card at the fuel pump. Hunter said Aspiration estimates the carbon footprint of a customer’s gasoline purchase and buys high-quality carbon credits to neutralize the impact of the customer’s driving. He said Planet Protection is a viable option for people who want to fight climate change but lack the means to purchase an electric or hybrid vehicle.

Aspiration debit cards
Aspiration customers can support the environment by using the company’s debit cards.

Aspiration incentivizes its customers to support businesses that value the environment. Customers who use the company’s debit cards to make purchases from companies in Aspiration’s Conscience Coalition receive cash back. 

Hunter said Aspiration works with partners to perform due diligence to assess a company’s alignment with a net-zero future. He said Aspiration has 34 partners in the Conscience Coalition and is looking to expand the number of participating companies in the near future. Hunter said sustainable products aren’t always the cheapest option, so Aspiration strives to help its customers make purchases that will benefit the environment.

“One of the things we’ve noticed over the years is that there are a lot of climate-conscious consumers who want to understand how they can do better with where they’re spending their money,” Hunter said. “We help them vote with their dollars. That’s the point behind the Conscience Coalition, which helps individuals find companies who share their values.”

A Digital Infrastructure Promotes Flexibility

Hunter said Aspiration has a digital infrastructure and a different expense structure than traditional banks with brick-and-mortar branches. He said the company’s structure allows it to realize savings that it seeks to pass on to its customers.

Aspiration offers an early-payday feature that allows customers to access funds from their paychecks up to two days early. Hunter said Aspiration aims to minimize fees for customers. He said the company participates in an ATM network that is primarily fee-free.

Chad Hunter
Chad Hunter is Aspiration’s Senior Director and Head of Sustainability.

“We also don’t charge for our checking and savings accounts,” Hunter said. “We have a program where our customers pay what is fair. We allow them to determine what they feel is a fair price for our standard products. If they’re not paying us enough, then we’re not doing our job well enough. And that’ll motivate us to improve our products.”

Aspiration donates 10% of the monthly “Pay What is Fair” contribution its customers choose to pay to support environmental nonprofits. Hunter said the company employs a process to locate nonprofits that share Aspiration’s mission and resonate with its customers.

Most companies measure their success by their growth and ability to meet financial goals. Hunter said Aspiration assesses its performance through financial metrics, but it also evaluates its success in its ability to positively impact the environment. He said the company has planted approximately 28 million trees since 2020, which he believes is more than any other financial services provider.

Responsible Investing Yields Environmental Benefits

The Aspiration Redwood Fund is a mutual fund that helps consumers invest in socially responsible companies that value sustainability. Hunter said the fund is actively managed and invests in approximately 50 companies that are undervalued relative to their book value and maintain specific standards related to environmental, social, and governance components. He said the fund’s managers don’t explicitly focus on investing in companies fighting climate change.

“We’ll make sure a company isn’t using tons of plastic or excess packaging,” Hunter said. “But we also examine social metrics to ensure a business is doing right by its employees. We want to make sure they prioritize their employees and customers, not just profits. If a company is undervalued, and it has industry-leading characteristics from an environmental, social, or governance perspective, we’ll view it as a high-quality company for inclusion into our fund.”

Aspiration helps its customers contribute toward creating a healthier planet, and the company examines ways it can further environmentally friendly initiatives. Hunter said the company has established goals to help transform Aspiration into a more climate-efficient company in the coming years. He said it has also invested in high-quality carbon credits to mitigate some of the emissions it released in 2023.

“The digital banking space is growing very rapidly relative to the traditional banking space,” Hunter explained. “Within that, we see a significant amount of opportunities for the climate-conscious consumer. We’re thinking through how we can best deliver more value for our customers that will lead to positive changes in the future.”