Good money: 5 fintechs for eco-conscious consumers

1. Aspiration: best practice in green fintech

US-based chal­lenger bank Aspi­ra­tion launched in 2015, mak­ing a sell­ing point out of not invest­ing in fos­sil fuels. “That is key,” says Estel­la Shard­low, act­ing senior con­sumer atti­tudes and tech­nol­o­gy edi­tor at trend fore­cast­ing agency Sty­lus. “There is a big trust issue with con­sumers around where their mon­ey is going and what it’s help­ing sup­port when it’s in the bank’s care. I think that’s a great exam­ple of show­ing how fin­tech can be a force for good.”

Oth­er fea­tures of Aspiration’s green fin­tech include cash­back on pur­chas­es from brands that “help build a bet­ter world”, includ­ing TOMS and War­by Park­er, as well as allow­ing con­sumers to fund refor­esta­tion projects by round­ing up their spend to the near­est whole dol­lar. Its rewards for spend­ing with sus­tain­able brands are “a best prac­tice of how to incen­tivise that eth­i­cal behav­iour”, says Shard­low.

The start­up raised a series C round of fund­ing worth £135 mil­lion in May, when it had some 1.5 mil­lion users signed up. Shard­low pre­dicts that it’s point of dif­fer­ence from com­peti­tors will con­tin­ue to win over cus­tomers. “What con­sumers want from their finan­cial ser­vices is a reflec­tion of what they want from every brand they inter­act with,” she says. Although bank­ing has been a lot slow­er than oth­er con­sumer-fac­ing indus­tries to demon­strate a com­mit­ment to envi­ron­men­tal or social caus­es, it is now being forced to catch up as more con­sumers expect it.

2. TreeCard: debit card will plant trees as customers spend

For now at least, Aspi­ra­tion is avail­able only to US cus­tomers. For Europe, enter TreeCard, a wood­en deb­it card that puts 80 per cent of its prof­its towards plant­i­ng trees. The start­up is work­ing in part­ner­ship with Ecosia, the Berlin-based eth­i­cal search engine that uses adver­tis­ing rev­enue to plant trees and now has 140 mil­lion month­ly users. Ecosia has invest­ed around £1 mil­lion in a pre-seed round of green fin­tech and TreeCard will be fund­ing trees through Ecosia’s exist­ing refor­esta­tion projects.

Co-founder Jamie Cox explains that TreeCard is “going after a dif­fer­ent demo­graph­ic to your stan­dard neobank”. “We’re actu­al­ly try­ing to scoop up users who care about cause rather than cash­back or invest­ing in cryp­to or more tech-focused sells,” he says.

TreeCard is not a chal­lenger bank itself; it’s cur­rent­ly look­ing for a reg­u­lat­ed bank­ing-as-a-ser­vice provider to part­ner with on the card. With open bank­ing tech­nol­o­gy, users will be able to pair the free card with their exist­ing bank account, says Cox. So far it already has 10,000 users on its wait­ing list and is antic­i­pat­ing being ready to launch dur­ing the first half of 2021, in the UK, Euro­pean Union and Unit­ed States.

Although users have an aver­age age of 25, Cox says that beyond the 30-years-old point, there is an even split across age groups. “It sug­gests there’s actu­al­ly a real sen­ti­ment change rather than just gen­er­a­tional dif­fer­ences when it comes to that cli­mate change sen­ti­ment,” he says. That only applies to users in Europe, though, and not in Amer­i­ca.

3. CoGo: fintech pushing customers towards green spending

CoGo was one of the ear­ly fin­tech play­ers to intro­duce a car­bon-foot­print track­er allow­ing users to mon­i­tor the impact of their spend­ing in real time. First found­ed in New Zealand in 2015, it launched in the UK in 2019 with its app that syncs to users’ bank accounts. As well as track­ing emis­sions, it also sug­gests ways users could reduce their car­bon foot­print, such as by switch­ing to a green ener­gy sup­pli­er or plant-based diet.

The plat­form now lists more than 20,000 busi­ness­es that are accred­it­ed for their envi­ron­men­tal or social impact and also sug­gests off­set­ting ini­tia­tives for users to sup­port to reduce their net impact. Accord­ing to CoGo, the major­i­ty of the company’s users are in the 21 to 30 age group, fol­lowed by 31 to 40, and 60 per cent are female.

Ear­li­er this year, CoGo announced part­ner­ships with two incum­bent banks, Natwest in the UK and  West­pac New Zealand. Shard­low at Sty­lus pre­dicts we’re like­ly to see more col­lab­o­ra­tions like this. “I don’t think the big banks can replace fin­techs because there’s an ingrained desire to do things dif­fer­ent­ly. I think it’s going to be a com­bi­na­tion of big banks col­lab­o­rat­ing and sup­port­ing fin­techs, and ulti­mate­ly improv­ing their own behav­iours,” she says. “But I don’t think they’re going to mus­cle out these dis­rup­tors because they’re already get­ting a lot of trac­tion with con­sumers now.”

4. Almond: carbon data for businesses and consumers

Like CoGo, this UK-based green fin­tech lets users track the car­bon emis­sions of their spend­ing and encour­ages them to spend with brands whose val­ues align with theirs. Donor brands have com­mit­ted a cer­tain per­cent­age of trans­ac­tions to refor­est­ing projects, so Almond cus­tomers are encour­aged to spend with them to sup­port the plant­i­ng of trees and, in doing so, off­set their car­bon foot­print.

Where Almond goes fur­ther is in its busi­ness-to-busi­ness propo­si­tion, offer­ing a sus­tain­abil­i­ty-focused cus­tomer rela­tion­ship man­age­ment prod­uct on a soft­ware-as-a-ser­vice mod­el. The start­up was found­ed in 2018 and secured £500,000 in crowd­fund­ing ear­li­er this year.

“So there’s def­i­nite­ly a lot of activ­i­ty in this space,” says Shard­low of Sty­lus, point­ing to Swe­den-based Docon­o­my as anoth­er exam­ple. “It’s nudg­ing this plan­et-friend­ly behav­iour in a way that’s very trans­par­ent and very stream­lined for the con­sumer.”

5. Clim8: making impact investing accessible

This Lon­don-based start­up has accrued £4.4 mil­lion in fund­ing since it launched in 2019. Clim8’s plat­form, which is yet to launch, will allow users to invest in pub­lic com­pa­nies that are work­ing towards tack­ling cli­mate change in sec­tors such as clean ener­gy, sus­tain­able food and smart mobil­i­ty.

Its ulti­mate mis­sion is to move bil­lions in invest­ments into plan­et-pos­i­tive sec­tors. Clim8’s port­fo­lio includes Green­coat UK Ener­gy, a pub­lic fund that holds inter­ests in UK on and off­shore wind ener­gy assets, and Ørst­ed, once Den­mark’s gov­ern­ment-owned oil and gas com­pa­ny that has upend­ed its busi­ness mod­el to become a renew­ables provider and quadru­pled its prof­its in the process.

Clim8’s app is due to launch soon, but its propo­si­tion has already proved a hit with investors; its most recent fundrais­ing of £2.4 mil­lion, via Crowd­cube, was a 600 per cent increase on its orig­i­nal tar­get. The fact that it has clinched fund­ing from out­side the ded­i­cat­ed envi­ron­men­tal, social and gov­er­nance investors – it has received fund­ing on two occa­sions from 7percent Ven­tures – high­lights the appetite for invest­ments with sus­tain­abil­i­ty at their core.