NEOBANKS: CONSCIOUS FINANCE Doing good: Aspiration aligns people’s values with spending and investment
Paying it forward Joe Sanberg didn’t want to co-found another fintech that promised change while relying on a broken financial system that was bad for the planet and for society. In that sense, Aspiration isn’t one “Where you choose to receive your payroll, and what you use to buy your groceries, is more than just a choice of financial services – it’s a choice of social values.” That’s Joe Sanberg, entrepreneur and outspoken critic of fintechs, which he believes are in a uniquely powerful position to change the world... but, for the most part, don’t. Which is why, when he launched what looks suspiciously like a fintech with Andrei Cherny in 2013 – both men from the wrong side of the social tracks who’d clawed their way up the
68
ThePaytechMagazine | Issue 8
professional ladder – the ambition was for Aspiration to be in a sector of its own. A platform that pays people to be good by closing the ethical loop between spending and saving, Aspiration is a fully-automated vehicle for environmental, social and governance (ESG) impact services, which offers guaranteed fossil fuel-free investments, a payment card providing cash incentives to steer users towards more conscious consumerism, and a carbon-offsetting credit card that sees a tree planted somewhere every time it’s used. “It’s a category that’s never existed before. Aspiration has defined it and, having created it, is growing it,” says Sanberg. “We happen to use financial products as one of the ways we deliver automated social impact services, but I have zero interest in being a fintech company.” Aspiration has, of course, (as with most challengers in the States) had to get close to a licensed bank – in this case Coastal Community Bank – to issue its debit
cards and look after its cash, while Aspiration itself is registered as a broker/dealer managing the $124million Redwood Fund, which has consistently outperformed Morningstar-rated funds as well as the S&P 500 over the past five years, including through the pandemic. Named after the tallest trees on Earth, the fund uses rigorous analysis of a companies’ sustainable ESG practices to find impact investment targets that it believes are poised for growth. It makes no secret of the fact it despises most mainstream banks’ investment policies, declaring on its homepage: “There’s a good chance your bank is using your money to fund oil projects that destroy the climate.” It goes on to state that the four biggest banks in the US lend more than $240billion of ‘dirty money’ to fossil fuel projects every year, asking ‘did you know that’s what your money was going towards?’. “The uncomfortable truth is that most people don’t,” says Sanberg. “When they www.fintechf.com
