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Sustainable vs. Impact Investing: What’s the Difference?

To help you choose the financial strategy that best embodies your goals, we’re unpacking impact investing vs sustainable investing, and we’ll even touch on ESG investing. While all three terms are similar, we’ll explore the nuances of each to help you get one step closer to 100% green investing.  Before evaluating the differences between sustainable investing vs impact investing—and ESG vs impact investing—let’s define some key terms:
  • Impact investing – A strategy that prioritizes positive change and strong investment returns.
  • Standard investing – Investing based solely upon maximizing estimated returns.
  • Return on investment (ROI) – The profit (or loss) you make from your stock, bond, fund, or product purchase.
  • Environmental, Social, and Governance (ESG) considerations – The ecological, equity, and transparency ramifications of a company or organization.

Impact Investing

When it comes to impact investing, investors value a positive social impact—on the environment, social equity, or anything else—and strong, consistent ROIs equally. Impact investing is an umbrella term that encompasses both sustainable investing and ESG investing.  Let’s explore an example. Perhaps you have $100 to invest, and you narrow your choices down to two competing mutual funds—a
sustainable investment fund and a traditional fund that doesn’t evaluate companies’ non-financial impacts.  Historically, both hypothetical funds performed well—the sustainable fund had a 5% year-to-date ROI, while the traditional fund realized a 5.5% ROI. For funds with similar returns, the impact investor would choose to invest in sustainable funds that embody their values more closely.

Sustainable Investing

Sustainable investing is a type of impact investing strategy that specifically prioritizes stocks, funds, and other investment products that create positive environmental change and offer a strong ROI. Like an impact investment decision, it’s important to note that sustainable investment strategies aren’t necessarily charitable—impact investors still value traditional investing concepts like:
  • Consistent and considerable ROI
  • Holding a diversity of investment assets
  • Appropriately managing risk
  • Creating and meeting both short- and long-term investment goals
But, sustainable investors assess an investment product’s alignment with the values above and their environmentalist goals. Instead of investing in a big bank, they’d likely opt for a company that, for instance, offered a green credit card. There are multiple ways to embody sustainability in your investment portfolio:
  • Pick sustainable companies to invest in that feature actionable sustainability plans and goals, like using a sustainable financial services provider.
  • Support brands that offer products or services that could create positive environmentalist changes.
  • Explore funds that feature a combination of both kinds of sustainable companies.

ESG Investing

Environmental, Social, and Governance (ESG) investing is another subset of impact investing. While many people question, ‘Is ESG the same as sustainability?’ it is important to consider that ESG investors prioritize stocks, funds, and other investment products that are compatible with a variety of values. An ESG investment zooms out from sustainability to focus on multiple interrelated factors:
  • Environmental – ESG investors assess a company’s impact on the environment and its plans to create positive social impact.
  • Social – Investors consider the social ramifications of a brand before investing. For instance, an ESG investor would likely prioritize a brand that fosters equitable workplaces, hires diverse teams, or supports unionization.
  • Governance – An ESG investment decision considers the people at the top of a company’s pyramid. They seek brands with a diverse C-suite, profit-sharing programs that benefit every employee role, and progressive leadership values.
Just like impact investors at large and sustainability investors, ESG investors value the all-too-important ROI. While a progressive company may embody their values, they won’t support the brand unless they predict positive returns. 

How to Invest in Your Values

Whether you fancy yourself an impact investor, a sustainability investor, or an ESG investor, there are ways to ensure that your portfolio reflects your values.  Let’s explore some places you can find key information about a company before you commit to responsible investing in them: 
  • Company website – Start on a company’s website. To explore their sustainable values, search for a page that details their plans to make an environmental impact and breaks down the sustainability efforts they’ve made so far. For governance information, navigate to a page highlighting the company’s executives.
  • News articles – Search for your potential investees in the news. Are they living up to their plans for positive change, or are they over-inflating their commitment to change?
  • Stock monitoring sites – To explore a stock’s ROI and price history, use a third-party investment information website that aggregates stock data, like MarketWatch. Getting this information from a third party is important—they provide unbiased, transparent information because they’re not selling investment products. 

Aspiration: Simple, Sustainable Financial Solutions

An impact investment is nuanced, but it isn’t complicated—impact investors, sustainability investors, and ESG investors all seek profitable investment products from brands that impart positive change. If you're looking for an investment fund that aligns with your values and aims to beat the market’s average ROI, look no further than the Aspiration Redwood Fund (REDWX). Combining the best parts of traditional investing values and climate-aware trading, the Redwood Fund contains a diversified array of brands making a positive impact on the planet.  With only a $10 minimum investment, low fees (Roth IRA accounts are free, and Traditional IRA accounts cost $15 annually), and no big-bank middlemen, the Aspiration Redwood Fund makes investing accessible and impactful.  Sources:  Forbes. An Introduction to Impact Investing. https://www.forbes.com/advisor/investing/impact-investing/  Harvard Business School. What is Sustainable Investing?. https://online.hbs.edu/blog/post/sustainable-investing  Forbes. Environmental, Social, and Governance: What Is ESG Investing?. https://www.forbes.com/advisor/investing/esg-investing/

Make Change Staff

August 5, 2022


What Is Climate Finance?

As climate knowledge, scientific data, and sustainable innovations continue to take shape, so do the terms we use to describe the climate crisis and our climate change mitigation efforts. One relatively recent term in green parlance is climate finance—but what is climate finance exactly, and what implications does it hold for individuals and our global community? In its most distilled essence, climate finance refers to any financial effort made toward reversing the effects of long-term environmental degradation and making human systems more sustainable.  With some climate finance basics under your belt—and a grasp of why these initiatives are so crucial for our biosphere—you can catalyze your journey towards greener money management for the common good.

Climate Finance 101

Climate finance strives to prioritize the health of the planet and economic prosperity globally for both developed countries and developing countries, in equal measure. Climate finance is comprised of three key elements:
  1. Incentivizing world governments to make international investments in climate change mitigation 
  2. Striving for green economies that value stewardship and profitability in equal measure
  3. Encouraging individuals to make financial choices that fuel sustainable development of the economy
From a climate finance perspective, consumers (that’s you!) are a lynchpin that determines whether or not green development succeeds. And if consumers can act collectively, prioritizing environmental considerations in your overall financial goals can help you invest profitably, wisely plan for your financial future, and save money on each purchase you make. But what does this look like in practice? Individuals can embody climate finance principles by:
In May of 2021, United States President Joe Biden introduced his Executive Order on Climate-Related Financial Risk, with the goal “to advance consistent, clear, intelligible, comparable, and accurate disclosure of climate-related financial risk (consistent with Executive Order 13707 of September 15, 2015 (Using Behavioral Science Insights to Better Serve the American People), including both physical and transition risks.”

Why Do We Need Climate Finance?

A sustainable economy can be built with investments in climate action, according to studies and reports done before the COVID-19 pandemic. However, you may be wondering; how much money will it take to help solve climate change? The world will need to invest significantly in infrastructure over the next 15 years, spending roughly US$90 trillion by 2030, according to World Bank data from October 2019.  But these investments can be recouped. If transitioned to a green economy, the World Bank states an investment of $1 would yield, on average, $4 in benefits. If we’re to shift our collective mentality from short-term profiteering to investing in our future, it’s essential to understand how climate finance speaks to what we value most. 

How Climate Finance Empowers Environmentally Responsible Companies

Let’s talk about buying power—your ability to purchase products and thereby influence markets, trends, and innovations. Imagine that you need to buy a new sweater. You have two retail options in your area—KnitWorld and SweaterCorp. Let’s break down a hypothetical profile of both companies:
  • KnitWorld offers a sweater for $16.00. As a company, they:
    • Operate a carbon-neutral storefront
    • Source their materials sustainably
    • Donate to an organization lobbying for climate action policies
  • SweaterCorp sells a similar sweater for $13.00. While cheaper, SweaterCorp is known to:
    • Buy the cheapest possible materials, regardless of environmental impact
    • Use fossil-fueled vehicles to fulfill local deliveries
    • Publicly support political candidates that don’t prioritize climate legislation
If your goal is to buy a sweater that will save you money in the short term, you’d pick SweaterCorp’s product. But if you want to purchase a sweater, invest in a green business, and send a message that sustainable companies are more likely to earn your dollar, KnitWorld is your brand.  In this way, consumers can use their buying power to tip the scales in favor of environmental responsibility—a core tenet of climate finance. 

How Climate Finance Sends a Message to Changemakers

When you empower companies that operate with the climate in mind, you also send a message to brands that don’t. While this might not seem significant on an individual level, it can have a massive impact at scale.  If everyone in your town always chose KnitWorld over SweaterCorp, the latter would likely take the hint. And, if they want to respond to market pressures (and keep turning a profit), they’ll have to conform to consumer demands for environmental responsibility.  These market shifts won’t go unnoticed. As climate finance grows in popularity, even mega-emitters (those 90 global companies that generate nearly ⅔ of all greenhouse gas emissions) will have to become more sustainable to appeal to consumer values. Climate finance sends a message to changemakers—business owners, influential CEOs, and government representatives—that sustainability must come first. Public corporations must be honest about their climate risk and consequences.

3 Ways to Get Started with Climate Finance

What could climate finance look like in your everyday life? Aside from shopping responsibly, consider the following tactics:
  • Shift to green investing – If you want to start climate change investing, purchase shares in responsible companies or climate investment funds that aggregate sustainable brands.
  • Donate to community organizations – Empower local organizations—groups working towards climate change advocacy, bolstering climate innovations, or conducting research—with your wallet. 
  • Divest from your big bank – Major financial institutions continue to bankroll fossil fuel projects, financing $740+ billion for non-renewable energy projects in 2021 alone. Instead of allowing your bank to use your hard-earned savings for unsustainable climate projects, switch to an environmentally responsible alternative offering sustainable financial solutions, like an eco-friendly debit card.

Aspiration: Paving the Way for the Climate Finance Takeover

Climate finance is one major tactic for pressuring the market, companies, consumers, and governments to prioritize climate action and environmental responsibility globally, in both developed countries and developing countries. As one of the key sources of climate finance—an individual with buying power—you play a critical role in its achievement.  If you’re ready to transition to a climate-first money management strategy, join us at Aspiration where we make climate fintech your tool for changing the world. We’re the antithesis of big banking: we channel your savings into bolstering renewable and sustainable development projects championing solutions to our modern climate crisis. Climate finance is the future, so start exploring our green money management solutions and eco-friendly climate investment funds today. Sources:  United Nations. Introduction to Climate Finance. https://unfccc.int/topics/climate-finance/the-big-picture/introduction-to-climate-finance  United Nations Environment Programme. About Green Economy. https://www.unep.org/explore-topics/green-economy/about-green-economy  Corporate Finance Institute. Bargaining Power of Buyers. https://corporatefinanceinstitute.com/resources/knowledge/strategy/bargaining-power-of-buyers/  Science.org. Just 90 Companies Are to Blame for Most Climate Change, This ‘Carbon Accountant’ Says. https://www.science.org/content/article/just-90-companies-are-blame-most-climate-change-carbon-accountant-says  The White House. Executive Order on Climate-Related Financial Risk https://www.whitehouse.gov/briefing-room/presidential-actions/2021/05/20/executive-order-on-climate-related-financial-risk The United Nations. Financing Climate Action. https://www.un.org/en/climatechange/raising-ambition/climate-finance

Make Change Staff

August 4, 2022


9 Carbon Projects that Help Offset Your Footprint

No matter where you are on your journey to green living, awareness of your carbon footprint is a crucial step towards mitigating your own environmental impacts. Once you understand your carbon footprint and take actions to reduce your emissions, you can then offset your unavoidable emissions by purchasing carbon credits. Carbon credits equal one ton of CO2 emissions (that’s about the equivalent of 2,482 miles driven by an average gasoline-powered passenger vehicle) avoided or captured by a carbon project. That project goes through a rigorous verification process by an international carbon standard.  By engaging with organizations that make tangible, effective climate actions, you can, in turn, work toward offsetting your own carbon footprint with high quality offsets.  In this guide, we’ll explore carbon offset examples that will stoke the fiery passion you have for climate action. We’re taking a deep dive into the different types of carbon offset projects you can support to offset your emissions that not only reduce our footprint, but also have additional environmental or social co-benefits that are in line with the UN Sustainable Development Goals.

Nature-Based Solutions

These credits are created based on either the carbon captured by new trees or by the carbon not released through the protection of forests. These projects exist all around the world, from growing forests right here in the US to replanting mangroves in Nigeria or rewilding the rainforests of Brazil. Nature-based projects protect and restore the Earth’s largest carbon sinks in our forests and soils. Nature based projects are often more expensive than non-nature offsets, but they are preferred for the many benefits they offer outside of carbon. Protecting ecosystems, wildlife, and social heritage is significant for companies offsetting their carbon emissions for the corporate social responsibility element. Moreover, they are the project types we can most relate to and easily see their co-benefits. Within nature-based projects, there are a variety of project types that manage carbon differently.

1. Reforestation/Afforestation

These are the most well-known nature-based carbon capture projects in the market. These carbon offset projects aim to restore degraded or barren land by planting trees. They create forests on land that may have been unforested or regenerate forests that have been deforested either by human activities or natural disasters. Reforestation and afforestation projects provide important co-benefits outside of carbon capture, including supporting biodiversity, improving water filtration in the soil, and providing jobs to the local communities. The lifetime of a reforestation or afforestation project typically ranges from 20-100 years, with a ramp-up period of carbon capture in the first years of the projects as trees mature and begin locking up carbon in biomass. This project type also has a sub-category: agroforestry. Agroforestry projects combine trees that can produce fruits and nuts and crops on the same plot of land, enabling mostly small shareholder farmers to make the most out of their land while also capturing carbon in the plants and soil. These practices can store significantly more carbon than conventional agriculture[1].  Co-benefits of this type of project vary from increased income for farmers and overall economic growth in the involved communities, food security and biodiversity support.

2.Forest Conservation

When forests are degraded, they can become a source of greenhouse gas emissions by releasing the carbon that has been stored in their organic matter and soil. It is estimated that deforestation accounts for around 10% of global CO2 emissions[2]. Forest conservation projects avoid these emissions by ensuring forests are protected from deforestation. Forest conservation projects - or as they’re commonly known REDD+ (Reduce Emissions from Deforestation and Forest Degradation PLUS the sustainable management of forests and the conservation and enhancement of forest carbon stocks) projects - prevent the loss of existing forests by protecting or enhancing forest cover. These projects protect forests from unplanned deforestation – deforestation caused by local communities through agriculture or illegal logging; or from planned deforestation – from commercial activities that deforest the area such as crop plantation or cattle ranches. Forest conservation projects provide co-benefits that positively impact biodiversity and local communities by providing protection to local species, including endangered species and additional income streams to local communities and employment.

3. Blue Carbon

Blue carbon projects follow similar practices as the project types described above but with a focus on carbon stored in coastal and marine ecosystems. These projects can include mangroves restoration and conservation as well as other wetlands ecosystems such as seagrass or most recently kelp. These projects have the capacity of capturing large amounts of carbon not only in the aerial biomass but also in the soils, this is particularly true for mangroves. Blue carbon projects have recently received a lot of attention mostly due to the vast benefits they provide. These projects offer climate change mitigation benefits preventing erosion, and absorbing storm surge impacts during extreme weather events. Mangroves are ideal breeding grounds for fish and shellfish as they provide shelter for young species before they move to open waters. Not only do they support marine biodiversity but are also an important ecosystem for birds and reptiles.

4. Regenerative Agriculture

Agricultural land takes up approximately 38% of the global land surface and is a large contributor to GHG emissions at 11.2% of total emissions in the US[3][4]. To combat this problem, regenerative agriculture projects implement soil-enhancing practices that capture carbon in the soil creating carbon sinks in agricultural land. These projects not only help in capturing carbon through practices such as crop rotation, no tilling, or reducing synthetic pesticides and fertilizers, but they also increase yields and help farmers have more productive land, also helping create more sustainable food security.

5. Grassland Management

Grassland management projects support land managers and pastoralists around the world to implement practices that increase the potential for the soil to capture additional soil organic carbon. The practices include strategic rotational grazing systems, reduce days grazed on all pastures and prioritize rest on grasslands. The result is healthier grass, greater root depth and increased soil carbon resulting in increased infiltration and retention of precipitation.

Non-Nature Projects

These projects capture or avoid carbon dioxide emissions through manmade technologies and help us in our decarbonizing efforts.

6. Renewable Energy

These projects generate energy from renewable sources such as wind and solar, decarbonizing the grid and reducing the dependency on fossil fuels such as coal and oil. The carbon credits are calculated by the number of emissions avoided by replacing energy produced by fossil fuels. These projects have additional benefits such as providing energy efficiency, improving air quality, creating job opportunities, and sharing knowledge with locals to develop new technical skills.

7. Household Devices

In rural or underdeveloped communities, the use of open fires for cooking is common. This not only is a danger to community members but also is a large contributor to GHG emissions and local deforestation. Household devices such as efficient cookstoves and water filters provide equipment that either reduces the amount of fuel used or completely eliminates it. These projects offer many benefits to rural communities such as health benefits from the smoke reduction in homes, reduce deforestation in the local forests, and families, specifically women, spend less time and money on wood and charcoal for fuel.

8. Waste Management

A waste management project often involves capturing methane and converting it into a reliable energy source. Sometimes this means capturing methane emitted through the decomposition of waste in landfills, or in smaller villages, human or agricultural waste. In this way, waste management projects can impact local communities by reducing air pollution and bad smells, reducing contact with waste, and reducing potential safety hazards of landfill gas explosions

9. Carbon Dioxide Removal

These projects include technologies that capture CO2 emissions from the air and either store it geologically or use it for different purposes. These carbon removal projects are currently costly to scale and as such, have not been tested at scale. These credits exist today but have not been certified by an international standard, like all the previous carbon reduction project types, and are in very short supply.   There also exists a number of up and coming carbon removal technologies, such as biochar (a cross between a NBS and technological project) and carbonated cement, to name a few. These projects are still at a very early stage and have yet to scale.

Aspiration: The Carbon Offset Project That Pays

Offsetting your carbon footprint with Aspiration is as easy as completing your everyday financial activities—spending, saving, tracking your financial progress, and managing your credit card purchases. Divest in fossil fuels, mitigate every mile you drive, and plant trees with every swipe of your eco friendly debit card Managing your cash and credit with Aspiration is a small change that’s capable of making a massive impact on offsetting carbon emissions. Take climate action today.

Make Change Staff

August 3, 2022


How to Invest in Carbon Credits

If you’re reading this article, you likely strive to live a sustainable lifestyle. However, some greenhouse gas emissions are inevitable—even everyday activities like commuting to your office or buying groceries can increase your carbon footprint.  If incurring emissions is part and parcel of living in today’s world, what can environmentalists do to reduce the impact of their implicit greenhouse gas (GHG) production?  One option is investing in carbon credits. Whether you’re a climate action newcomer or a long-time environmentalist, carbon credit technology can help to revolutionize your eco-friendly lifestyle.  In this guide, we’ll teach you how to invest in carbon credits, explore a few different types of carbon credit projects, and detail three investment methods you can adopt. 

What Are Carbon Credits?

Before we explore how to invest in carbon credits, let’s quickly refresh ourselves on what they actually are.  Essentially, a carbon credit is a certificate in the voluntary carbon market guaranteeing that your credit helps offset a specific volume of emissions. What does this look like in real life? Let’s explore an example:
  • You have to fly to visit a relative next month, so you purchase an airline ticket. 
  • You use an emissions calculator to determine that your flight will produce 200 kilograms (kg) of carbon dioxide to get you to your destination and back home again. 
  • To help offset your emissions from the trip, you purchase a carbon offset credit to neutralize 200 kg of carbon dioxide. For example, you could purchase a credit that will allow a carbon capture project to reclaim 200 kg of carbon dioxide from the atmosphere. We’ll discuss the different types of carbon credit projects in the next section. 
A carbon credit purchase foots the bill for climate action activities that stand to neutralize the emissions you’ll produce on your trip. Plans to reduce emissions have made progress in the European Union, United States, the United Kingdom, New Zealand, and China. The European Union plans to have net-zero carbon emissions by 2050, as part of the European Green Deal, and US President Biden signed an executive order in 2021 pledging net-zero emissions in the US by 2050 as well.  There are currently 65 carbon pricing initiatives according to the World Bank, and they covered more than a fifth of the world's greenhouse gas emissions in 2021, and that’s in addition to the voluntary carbon market where businesses can purchase carbon offsets  Refinitiv estimates that in 2021, the global carbon market was worth $851 billion, up from just $270 billion in 2020.

Different Types of Carbon Credit Projects

Carbon credits come in all shapes and sizes, and different environmentalist projects tackle different climate action tasks. Let’s explore a few common project types you might fund when you purchase carbon credits.

Renewable Energy

Renewable energy carbon credit projects use your credit purchases to advance renewable energy in some fashion. Some examples of a renewable energy carbon offset project include:
  • Renewable technologies research
  • Renewable energy production
  • Fossil fuel bypassing in industrializing nations
  • Renewable infrastructure-building
  • Advocacy and lobbying
One example of a renewable energy carbon project is Atmosfair, a Germany-based initiative focusing specifically on air travel mitigation. Some of their projects include:
  • Environmental education initiatives
  • Supplying industrializing nations with renewables infrastructure, such as
    • Solar power
    • Wind power
    • Biofuel and biomass energies
  • Decarbonization of tourism efforts 
  • Consulting with businesses to build decarbonization plans
Importantly, investors in renewable energy projects should consider how tangible the results of their purchase will be. Investors should seek projects that are transparent about the past results of their projects, their goals going forward, and the impact of carbon credit purchases at large. 


Conservation projects are a broad category, but some examples of carbon offset credit conservation projects include:
  • Stewardship or conservation of forest land
  • Protection and advocacy for Indigenous communities
  • Pollution prevention or mitigation initiatives
  • Large-scale tree planting projects
  • Subsidization of permaculture farming and food forests
Conservation projects generally fulfill one of two purposes:
  1. Capturing or mitigating emissions or pollution
  2. Bolstering communities that steward their local ecosystems without fossil fuels
Since it’s such a wide-reaching project type, there are a variety of organizations that carbon credit investors can support within this sector. Some examples include:
  • Rainforest TrustRainforest Trust uses carbon credits and other donated funds to protect rainforests (which absorb and store carbon dioxide emissions), native wildlife, and Indigenous communities.
  • Cool EarthCool Earth specifically supports Indigenous communities living in and protecting rainforest ecosystems. With the understanding that native peoples actively living in rainforests know best how to care for them, the organization seeks to protect Indigenous peoples from marginalization and displacement.
  • ReforestActionReforestAction is a reforesting organization that plants trees worldwide. But, they don’t just focus on forests’ ability to capture carbon—they also promote biodiversity protection and rehabilitation, advocate for policies that protect forest land, and provide critical tree planting work to Indigenous communities.

Emissions Capture

Emissions capturing projects usually take one of three major forms:
  1. Carbon dioxide capturing (often through reforestation, which Aspiration facilitates through our products)
  2. Methane capture
  3. Landfill gas capture
All three constitute greenhouse gas (GHG) emissions, but in the cases of methane and landfill gasses, organizations often take steps to convert these GHG emissions into usable energy.  Two emissions capture projects include:
  • TerrapassTerrapass uses carbon credits to fund four major initiatives—landfill gas capture, renewable energy projects, forest protection and tree planting, and industrial gas destruction. 
  • 1t.org1t.org primarily mobilizes worldwide, large-scale tree planting. But, they also organize collective climate action efforts and help scale successful climate technologies and systems. 
Tree planting is a critical arm of carbon-capturing worldwide. Some sustainable financial services providers are leading the charge, combining everyday transactions and money management with carbon credit investing to facilitate large-scale tree planting. Aspiration’s green credit card and eco-friendly debit card, for instance, provide consumers with emissions capture opportunities every time they use their card. 

Community Projects

From a climate finance perspective, consumers are an anchor that determines whether or not green development succeeds. Consumers seeking to help offset their footprints can invest in carbon offsets that support small community projects in their own backyards and beyond.  What does community project investment look like? Let’s explore a few examples of projects you might encounter in your search:
  • Local farms that produce food while:
    • Capturing their emissions with sustainable tech or tree planting
    • Using renewables or alternative fuels to power their machinery
    • Advocating for or building green food systems
  • Individual investors or innovators building sustainable tech
  • Small businesses seeking to decarbonize
  • Local pollution mitigation efforts
  • Communities abroad seeking to avoid fossil fuel reliance as they industrialize
So, where do you find such carbon offset projects? Luckily, numerous online aggregators of sustainable community projects make it easy to lend or donate to peers taking climate action. One example is Kiva, which connects peer-to-peer lenders, donors, and investors with green entrepreneurs around the world. 

3 Methods for Investing in Carbon Credits

We’ve explored why you may want to invest in carbon credits and the kinds of projects your investments could fund. Now, let’s cover how to invest in carbon credits once you’ve committed to helping offset your footprint.

#1 Direct Peer-to-Peer Lending and Donating

Directly giving money to a project, organization, or initiative that resonates with you is one tactic that consumers can adopt to help offset their carbon emissions. This route can take a few different forms:
  1. You could use a platform like Kiva to find a project and directly contribute to it using the site’s infrastructure.
  2. You could identify a local project in your area and organize a digital transfer or cash exchange.
  3. You could seek a local green investment firm in your area that could connect you with local sustainable projects to support.
One important factor to consider when directly contributing to an initiative is how your footprint translates to a dollar amount. Your project of choice may be able to calculate the volume of emissions they can offset per dollar, but this might not always be the case.  Keep in mind that even if your contribution doesn’t lead to direct emissions capture, policy change, or renewables development immediately, any positive changes as a result of your investment will make an impact.

#2 Manage Money with a Green Financial Services Provider

Green financial services providers, like Aspiration, are making it easier than ever to invest in carbon offset credits with limited legwork. Aspiration undertakes carbon offsetting efforts for you, automatically investing in projects that can neutralize your everyday footprint.  We accomplish this task in a few key ways:
  • When you use the Aspiration credit card, we plant one tree for every purchase you make, and you can plant a second tree with your spare change by rounding up your purchase to the nearest dollar. That way, if you use the card once a day, you could plant enough trees to counteract your daily negative carbon footprint (unless you’re a real gas-guzzler).
  • When you sign up for Aspiration Plus, we’ll automatically help offset the carbon dioxide emitted from every gallon of gas you purchase.
  • Non-account holders can link their existing credit or debit cards to plant a tree each time they make a purchase via our Plant Your Change program. 
With a green money management partner like Aspiration, you can help offset emissions with everyday purchases.

#3 Purchase Credits from Third Parties

Numerous third parties offer carbon credits for one-time or regular purchases and use your funds to bolster their own projects or redirect them to other initiatives. One example—which we discussed briefly above—is Terrapass.  Terrapass operates their own sustainable projects worldwide, but they make it simple to calculate your footprint, purchase one-time credits when you need to, or sign up for recurring investments in their initiatives.  But, remember to vet the third parties you use for carbon credit investing—make sure their projects are:
  1. Producing results
  2. Recognized by regulatory agencies or other sustainability organizations
  3. Transparent about their funding, their plans, and their ethics

Manage Your Money While Helping Offset Your Emissions

Investing in carbon offset credits is an excellent method for helping address your carbon footprint—whether you’re combating your everyday, inevitable emissions or neutralizing the impact of a major emissions event like an airplane ride.  Aspiration is making it easier than ever to manage your money while helping offset your GHG emissions.  But, we’re so much more than a green financial services provider—we use your hard-earned savings to invest in projects that benefit the planet and produce profitable returns, bolster the green economy by operating the Redwood Fund, and help you neutralize the emissions that you produce in your everyday life.  We’ve planted almost 76 million trees since our inception, and we’re not slowing down anytime soon; we’ve publicly committed to planting 1 billion trees by 2030. When you’re ready to take action against climate change, start managing your finances with Aspiration.  Sources:  Corporate Finance Institute. Carbon Credit. https://corporatefinanceinstitute.com/resources/knowledge/other/carbon-credit/  International Civil Aviation Organization. ICAO Carbon Emissions Calculator. https://www.icao.int/environmental-protection/Carbonoffset/Pages/default.aspx  Energy Intelligence Centre. 4 Types of Carbon Offset Projects. https://www.eic.co.uk/4-types-of-carbon-offset-projects/  The World Bank. Carbon Pricing Dashboard | Up-to-date overview of carbon pricing initiatives https://carbonpricingdashboard.worldbank.org/map_data  Reuters. Global carbon markets value surged to record $851 bln last year-Refinitiv https://www.reuters.com/business/energy/global-carbon-markets-value-surged-record-851-bln-last-year-refinitiv-2022-01-31/ 

Make Change Staff

July 29, 2022


How to Invest in Climate Change Solutions

Historically, most investment strategies led with a profit-seeking mentality. Investors sought to invest in companies that would yield the highest return.  Today, a new investor philosophy—environmental, social, and governance (ESG) investing—has emerged to challenge traditional methodologies.  With the mounting specter of climate change threatening the planet, producing ROI is no longer a strong enough justification for investing, especially not if it funds projects that accelerate the problem. Instead, the thinking goes that investments should produce ROI and seek to create a positive social and environmental impact.  To that end, let’s talk about climate change investing and how it will change the world. 

What Is Climate Change Investing? 

Climate change investing focuses on promoting solutions that hasten a “green” transition to a carbon-neutral and environmentally friendly society. As a subset of ESG, it seeks to achieve profits and positive social change.  In short, it’s an investment portfolio management style that emphasizes ethical wealth creation. And the industry is booming. In Q1 of 2021, more than $178 billion spilled towards “green” investment funds globally.  Typically, the primary investment targets are companies,
climate fintech, technologies, or SaaS providers that are likely to gain prominence as the world transitions away from harmful industries (or companies that champion responsible and sustainable business practices).  Many of these organizations were created to mitigate the main contributors of green gas or GHG emissions, which include: 
  • Electricity and heat production (25%) – The burning of natural, gas, oil, and coal for heat and electricity.
  • Industry (21%) – The GHG and carbon emissions from a facility's energy demands, industrial processes, and waste management processes. 
  • Agriculture, forestry, and other land use (24%) – The emissions from the cultivation of crops and livestock combined with deforestation.
  • Transportation (14%) – The emissions from fossil fuels burned for road, air, rail, and naval transportation.
  • Buildings (6%) – The emissions from onsite energy generation, whether commercial or residential.  
  • Other energy (10%) – The secondary GHG emissions from the energy sector from processes like fuel extraction, refining, processing, or transportation.

How to Invest For Climate Change Action — The Three R’s of Ethical Investing

So, what eco-friendly initiatives do investors tend to favor? Dr. Sarah Kapnick, Sustainability Strategist and Senior Climate Scientist, divides it into three overarching categories she terms the three R’s: reduce, remove, and retrofit.


The first initiative seeks to find investments that help in greenhouse emissions reduction. Sustainable investing subsets include:
  • Energy supply decarbonization by focusing on promising renewable energy options like solar, wind, geothermal, and tidal.
  • Energy demand reduction by increasing the efficacy of energy storage and usage and reducing the operating costs. 
  • Process transformation by developing novel processes and formulations, optimizing existing carbon-intensive processes, and improving resource efficiency.


The next category primarily focuses on removing excess greenhouse gasses from the atmosphere. There are one of two ways this can be done: 
  • Natural-based carbon removal by investing in natural processes inherently combat greenhouse gas emissions, including forestry, agriculture, and aquaculture management.
  • Mechanical carbon removal by investing in technologies that capture greenhouse gas emissions and remove carbon from the water or air. 


The final category emphasizes retrofitting buildings and systems to combat the impacts of climate change. Primary investment opportunities for retrofitting include: 
  • Updating existing infrastructure by rebuilding, retrofitting, or adding new structures to withstand future climate and weather events. 
  • Water enhancement by augmenting water treatment, production, and recycling processes.
  • Food enhancement by developing agricultural technologies and processes that can withstand climate change shocks. 

Climate Change Action Initiatives in the Redwood Fund 

Yes, climate change poses a significant long-term risk. At this point, this should be no surprise to anyone. But time and time again, when we band together, we improve our ability to adapt and innovate.  Today, investors can play a significant role in fighting climate related risk by investing in funds that help make a difference as well as being aware of climate change and the banking impact. To that end, are you looking for an investment channel that champions companies who lead with sustainable environmental, workplace, and governance practices? Meet the Aspiration Redwood Fund—an A-rated 100% fossil fuel-free index.  It was expressly designed to identify, invest in, and support companies poised to scale and make a positive impact on the world. The Redwood Fund seeks to highlight market leaders driving the “green” transformation.  So how does Aspiration Redwood Fund identify suitable candidates?  By conducting ESG audits, we can identify companies whose values and practices align with their profit potential. Since its inception, our fund has sought to meet or beat the S&P 500 total return index.  2021 was the first year it surpassed that benchmark. To that end, The Redwood Fund is diversified into six primary categories: 
  • Information technology (24%)
  • Financials (21%)
  • Industrials (16%)
  • Healthcare (14%)
  • Consumer discretionary (13%)
  • Other (4%)
  • Energy (1%) 

Investing in Responsible Climate Change Solutions with Aspiration 

Whether you want to open a taxable account or an IRA, Aspiration empowers retail investors to fulfill their climate investing pursuits with as little as $10. Backed by the industry experience of UBS Asset Management, the Aspiration Redwood Fund is designed to focus on profits and the planet. Furthermore, Aspiration provides automated ways to invest in climate change. Consider opening an eco friendly debit card or green credit card, both of which aim to help the planet and your wallet. So, are you ready to invest in climate solutions? Explore our sustainable financial services and start investing in the Aspiration Redwood Fund today. Sources:  IPCC. Climate change widespread, rapid, and intensifying – IPCC. https://www.ipcc.ch/2021/08/09/ar6-wg1-20210809-pr/ Forbes.  Ways to Invest to Slow Climate Change. https://www.forbes.com/sites/nextavenue/2021/08/13/ways-to-invest-to-slow-climate-change/?sh=75d0e1961b56 EPA. Global Greenhouse Gas Emissions Data. https://www.epa.gov/ghgemissions/global-greenhouse-gas-emissions-data JP Morgan. How can I invest for climate change? https://www.jpmorgan.com/wealth-management/wealth-partners/insights/how-can-i-invest-for-climate-change

Make Change Staff

July 20, 2022


Climate Fintech: The Crossover Between Finance and Sustainability

Banking has changed significantly in the last two decades—online banking tools, mobile depositing with smartphones, digital credit monitoring, and other innovations have permanently changed traditional money management.  Like digital financial technology developments, climate change has also taken center stage in the last twenty years as expert predictions became increasingly glum. But, in an age of peak technological advancement, can’t we harness the power of fintech to promote sustainable initiatives? The short answer—yes. In this guide, we’ll explore everything you need to know about climate fintech, the different types of initiatives available today, the relationship between climate change and banking, and the potential impact you can make with the power of fintech sustainability. 

What is Climate Fintech?

Before we explore existing climate fintech solutions, let’s define fintech and its sustainable relative, climate fintech. You may be more familiar with these terms than you think. 

What is Fintech?

Fintech is a portmanteau of “financial technology.” Fintech describes any digital tool or technology used to support or facilitate money management tasks like:
  • Debit and credit transactions
  • Deposits and withdrawals
  • Investing
  • Statement delivery
  • Transaction history data compilation
Debit and credit cards are a familiar example of fintech—the technology significantly reduced the number of cash transactions completed for everyday purchases and rendered paper checks nearly obsolete.  But, discussions of green fintech generally consider more recent developments like:
  • Mobile banking apps and browser tools
  • Digital investment platforms
  • Mobile device depositing
  • Online bill pay
  • Digital account transfers
  • Purchase protection
  • Enhanced privacy and security measures
  • Cryptocurrency payments and trading
  • Digital loan application tools
  • Credit monitoring apps for smartphones and browsers
  • Cashless banking via online-only financial institutions
You likely use some aspect of green fintech every day—if you Venmo a friend to split a bar tab, pay for a rideshare service on your smartphone, or pay your utility bill online, fintech is a part of your everyday life.  If the exponential growth of fintech for the last two decades is any indication, financial technologies will continue to grow and change significantly, disrupting old guard financial services providers and giving consumers more power over their money. 

How Do Climate Action and Fintech Intersect?

Massive fintech development and increased visibility of climate risk data appeared mostly simultaneously. As a result, some innovators have combined the power of fintech with the motivation for climate action, building sustainable financial services options for environmentally-focused consumers.  The result is climate fintech—harnessing fintech tools to tackle climate change and other environmental issues.  Climate fintech prioritizes automation, one of the most significant impacts of fintech developments. Instead of encouraging consumers to donate to environmental causes or physically participate in climate action, climate fintech customers passively contribute to positive change just by banking as usual. Financial services providers empower consumers to passively impact the environment in numerous ways. Some examples include:
  • Carbon offsetting – When consumers deposit funds, make purchases, or complete other financial tasks, their financial services providers donate to carbon offsetting projects (e.g., tree-planting, carbon capture, or alternative energy infrastructure development) on consumers’ behalf. 
  • ESG investing – Financial services providers typically use capital deposited by customers to provide loans for various projects. Fintech companies strategically invest in initiatives prioritizing environmental, social, or governance (ESG) responsibility. 
  • Carbon footprint monitoring – Fintech companies can monitor consumers’ purchases to determine the environmental impact of their transactions. 
Climate fintech continues to grow, and traditional investors seem to like the idea—as of the first quarter of 2022, VC firms have awarded over $475 million in funding to fintech startups.

Types of Climate Fintech

While we explored some examples of climate fintech developments above, let’s get into the nitty-gritty of current technologies and market offerings. 

Green Debit, Credit, and Savings Accounts

The idea of the climate bank has opened countless doors for environmentally-responsible consumers.  Climate fintech innovators strive to combine positive climate impact with the convenience of financial automation to make environmental action as simple as possible. Financial services providers typically build a green banking experience using tools familiar to consumers:
  • Debit cards – Consumers widely use debit cards to pay for purchases directly from their checking accounts. But, some financial institutions offer an eco friendly debit card. While different service providers offer different packages, most complete or contribute to a climate-positive task for each purchase made with the card.
  • Credit cards – Consumers who wish to finance purchases with a credit card while acting environmentally responsible are in luck. Many fintech institutions offer a green credit card. The process is usually similar to eco-friendly debit card policies—purchases support environmental action—but some providers offer additional environmental benefits when consumers reach a purchase threshold, make payments, or accumulate points.
  • Savings accounts – Climate fintech providers offer environmental benefits to consumers simply for using their savings accounts. Providers employ various savings-related climate strategies—some include the responsible investment of consumers’ saved cash, donation of service charges or fees, or incentive-based climate action for reaching savings goals. 

ESG Investment Tools

Environmental, social, and governance (ESG) investing is growing in popularity—in 2021, consumers invested a record $649 billion in ESG investment funds worldwide. Some financial services providers harnessing climate fintech are making it simple for consumers to invest in companies that reflect their values. ESG investment tools take two general forms in fintech:
  1. Green investment platforms – Green stock aggregators, carbon-neutral crypto trading platforms, and eco-friendly brokerage firms help consumers choose investment products (e.g., stocks, mutual funds, and target-date funds) from environmentally responsible brands.
  2. Green advising and ethical evaluations – Some fintech companies monitor publicly traded brands’ ESG-related actions, compiling this data to make an ethics recommendation to investors. Consumers could use these tools to verify a company’s responsibility before signing on the dotted line. 
ESG investing tools facilitate and/or advise on two types of ESG-aware brands:
  1. Businesses that sell products or services that facilitate ESG action (e.g. a plastic recycling company)
  2. Businesses that don’t sell ESG-related products, but have transparent and actionable ESG-aware values. 

Carbon Credit Trading

Carbon offsets describes the purchase of carbon credits to offset your individual carbon footprint. Carbon credits are, essentially, funds donated to climate-focused causes or initiatives like:
  • Tree-planting
  • Carbon capturing efforts
  • Building alternative energy infrastructure
  • Indigenous land stewardship
  • Alternative energy initiatives for developing economies
Independent carbon credit trading platforms—websites or apps where consumers can contribute to causes and offset their footprints on their own—are a type of fintech. They harness the power of online purchasing and electronic funds transfer infrastructure to both offer products to consumers and transfer that capital to environmental projects.  But, some green financial institutions offer built-in carbon offsetting. For example, Aspiration integrates the following measures to help consumers offset their footprints:
  • Planting one tree for each purchase made with a credit or debit card
  • Allocating carbon credits for each gallon of fuel purchased with a credit or debit card
  • Investing consumers’ dollars in climate action projects

Carbon Footprint Tracking

Fintech can help consumers track their individual carbon footprint, helping them measure, reduce, and offset their environmental impacts.  There are a few different types of fintech-related carbon footprint monitoring technologies:
  • Purchase monitoring – Some financial services providers will review your purchases to determine the environmental cost of the goods you buy. For instance, after a trip to the grocery store, an app may use your purchase total and account for your transportation to estimate your potential carbon emission. 
  • Alternative method tracking – Some apps track the impact of alternative lifestyle choices and products to determine the extent of your carbon footprint reduction. If you opt for taking the bus, riding your bike, or carpooling to work instead of driving alone, and you enter the information in an app, it can aggregate your data to estimate the carbon emission you’ve prevented. 
  • Offset trackers – Some financial services providers like Aspiration offer apps to track progress made with their built-in carbon offsetting benefits. For instance, the Aspiration app can help you neutralize your monthly carbon footprint and track your progress towards carbon neutrality. 

Does Climate Fintech Make an Impact?

Climate fintech has streamlined clunkier aspects of environmentally friendly spending, financial planning, and investment. When it comes to fintech sustainability, significant impacts include:
  • Increased demand for banking transparency – With the advent of eco-friendly financial services, consumers began to ask their current banks tough questions about their values. More than 60% of consumers plan to increase their efforts to choose environmentally responsible companies, putting pressure on their banks to act ethically.
  • Automated environmental impacts – The impacts of climate change can feel daunting—so can calls for climate action. But, climate fintech has made it easier than ever to automate and simplify climate actions, making environmental responsibility more accessible to climate action newcomers. 
  • Innovation and economic growth – The growing climate fintech industry proves that the green economy is viable, profitable, and financially sustainable. As a result, more and more innovators are taking their fintech solutions to the marketplace, empowering consumers to participate in the economy while facilitating climate actions. 

Aspiration: Climate-First Financial Services

Climate fintech lies at the crossroads of technological innovations in the finance sector and growing calls to climate action. Via banking alternatives, ESG or climate change investing, carbon offsetting, and carbon footprint tracking, the growing climate fintech sector empowers consumers to meet their financial goals while making a positive impact on the planet.  It’s at the heart of everything we do at Aspiration.  We facilitate climate action daily, putting your hard-earned (and responsibly spent) dollars to use. Our built-in carbon offsetting helps you neutralize your carbon footprint without hassle—we handle the calculations and logistics, and all of your daily financial tasks stay the same.  It’s time to join the financial institution that embodies your environmentalist values—Aspiration is helping to heal the world one dollar at a time.  Sources:  Forbes. What Is Fintech and How Does It Affect How I Bank?. https://www.forbes.com/advisor/banking/what-is-fintech/  Crunchbase. More Early-Stage Funding Flows to Climate Tech and Finance. https://news.crunchbase.com/news/venture-funding-startups-climate-fintech-finance/  Reuters. Analysis: How 2021 Became the Year of ESG Investing. https://www.reuters.com/markets/us/how-2021-became-year-esg-investing-2021-12-23/  The Guardian. A Complete Guide to Carbon Offsetting. https://www.theguardian.com/environment/2011/sep/16/carbon-offset-projects-carbon-emissions  Popular Science. How Banks Are Using Technology to Fight Climate Change. https://www.popsci.com/environment/climate-fintech/

Make Change Staff

July 20, 2022

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