Fighting climate change through banking: A conversation with Aspiration CEO Andrei Cherny

It turns out the banks have all of our money. Sure, that's obvious -- and yet we don't always draw the connections between where we keep our savings and investments and how those deposits are deployed in the real world. That's why we may be surprised to learn that, since 2016, the world's banks have used nearly $4 trillion of our funds to finance fossil fuel projects, according to a Rainforest Action Network study.

Enter Aspiration, a Los Angeles-based alternative bank built to offer a more environmentally conscious take on financial services. Not only does it offer a bank account that ensures your deposits will not be used for fossil fuel projects, but holders of its Aspiration Zero credit card have a tree planted on their behalf with every purchase.

Founded and led by Andrei Cherny, who started his career working on global warming issues under US Vice President Al Gore, Aspiration promises to "make your spending make a difference." CNET sat down with Cherny to learn more about Aspiration's approach to democratizing sustainable finance, and where he sees his company in the fight for a sustainable future. Here's an edited transcript of the conversation.

Q: Why did you decide to start an alternative bank?
Cherny: It's become clear that the way that you use your money says a lot about you. If I decide to give $100 to charity, or use that money to get a gold-plated steak at some restaurant, that's a moral decision. And millions of people make these decisions daily. If you're not making those decisions, you're not thinking about that -- that's a decision too.

That is where Aspiration comes in. Through our Aspiration Spend and Save account, all of your deposits are fossil fuel free. There's millions of people who will buy fair trade coffee and drink it out of a paper straw, yet think nothing of paying for that with a Wells Fargo debit card. They might not even realize that the damage they're doing by having their money held at any of these big banks probably outweighs the positive benefits of what they're doing. The biggest banks in the world collectively spend more each day financing oil and gas exploration and drilling than Exxon Mobil will in a year.

I think the second part of that equation of 'do no harm' finance is 'do good' finance. American consumers spent $13.7 trillion in the third quarter of 2021 alone.  Every time you make a spending decision, you're taking action. With our Aspiration Impact Measurement tool, you can view businesses' sustainability scores and empower yourself with knowledge about how those businesses treat both the planet and people. When you decide to spend your money at a business that does better for sustainability, that's a moment of action, and you're driving change. 

It seems like a lot of financial services, companies and banks dress themselves in the cosmetics of sustainability as a marketing strategy. How did you arrive at the perspective of, 'We need to fight climate change, and one of the most effective channels to do that is to establish a financial institution'?
I didn't come out of the financial industry. It wasn't my background. We didn't set out to build a bank. We set out to build a better world. I really didn't have much interest in starting a financial institution. But that was the motivation behind Aspiration: helping our customers financially and creating a financial institution that would help them do well, but also one that helped them do good, as people make their daily financial decisions. 

We believe our sustainability focus will show you our core values, because, ultimately, the climate crisis is about people -- we see the disparate impact of the climate crisis on all kinds of communities. 

Aspiration, in addition to climate change, also focuses on the mission of democratizing access to finance. You offer a unique "pay what is fair" fee for some banking services. How does this focus shape your business -- and financial performance?
From day one, it's been about not only the impact, but about the financial products that we're providing to our customers. We wanted to build something from the ground up, that was founded around fairness and positive impact. It's not enough to promote sustainability if the way that you make money is predatory. 

The truth is that almost every other bank out there does better when their customers do worse. The way they make money from their customers is overdraft fees, late fees, service fees, out-of-network ATM fees. 

We didn't want to be in that business. We want to align ourselves with our customers, we want them to know and then to trust that we have their best interests at heart, because that'll be the way they make money. 

How does that shake out in practice?
Most people choose to pay. About three quarters choose to pay -- even though they could be paying zero. 

Who else in the financial industry is doing a good job on the climate activism front?
We're fairly unique. But in the "do no harm" category, there are local banks like Amalgamated Bank, in New York, or Beneficial State Bank, which is actually our back-end partner for Aspiration Zero. There's also good work being done in sustainable investing. And there are some companies doing good work democratizing the sustainable investing process, which is fundamentally a part of what we do, too. We have our Aspiration Redwood fund, best in class in terms of sustainable investing, but there's other solutions out there, taking from that realm of very wealthy individuals and large institutions to bring into people's day-to-day financial alternative investing. There are a few companies that are doing good work by financing climate solutions as well. So there are others -- but there aren't a lot. 

A big part of our business outside of the financial industry is taking sustainability tools -- carbon offsetting, tree planting -- and bringing them to businesses across different arenas that are working on this front. But we really see ourselves as pioneers, because we take that sustainability focus and bring it to people's daily spending and savings.

What's coming next for Aspiration?
There are all kinds of opportunities to make people's lives sustainable. We just launched Aspiration Zero, which is a special product because it puts the power to make more environmentally friendly choices right in a person's hand on a daily basis. Essentially, every time you make a purchase, we plant a tree. If our customers round up their spare change, they can plant another tree, that's 60 trees a month and we've completely offset the average person's entire carbon footprint. More than any other product out there, it allows people to have a sense of real power when it comes to what they can be doing on a daily basis to fight the climate crisis.

Where do you see Aspiration in 10 years? What's your ultimate end goal?
We are in the early days of what will be the largest shift in behavior in human history. It needs to be. And I believe Aspiration has the opportunity to be a global driving force of people taking action with the daily decisions that they make. Through Aspiration, people can embed sustainable action into their daily lives in ways that are easy and automated, and yet still really powerful.