A few things happened after our world governments came together to sign the Paris Agreement in late 2015: Some took the call to prevent catastrophic climate change seriously, and others—well, not so much.
Ultimately, the pact to keep global average temperatures from rising 2°C for the future health of our planet will take work from everyone. And though the climate science is simple—we have to reduce CO2 emissions to reduce the effects of global warming—making it happen is another story.
Crunching the numbers, a 2016 report published by Oil Change International revealed that unless we totally stop digging for more fossil fuels and start closing down existing fossil fuel operations, our efforts won't be enough to achieve the Paris climate goals. (Burning fossil fuels like oil, gas, and coal for energy is by far the biggest driver of climate change.)
This is where we come in.
Helping put the pressure on big banks to do better, a financial firm called Aspiration Financial, LLC—which has been offering eco-conscious financial services since 2018—is asking a million Americans to take a simple but powerful step of action: Commit to moving their money out of fossil-fuel-funding banks and into environmentally friendly alternatives. It's a Move To Green movement, proving that more and more people aren't satisfied with sticking to the status quo when it comes to how they manage their finances—and want their money to align with their desire to help the planet instead of hurt it.
It’s a Move To Green movement, proving that people aren’t satisfied with sticking to the status quo when it comes to how they manage their finances.
Aspiration was started because its founding team noticed people were looking for more socially and environmentally conscious ways to invest, bank, and manage their money. "I was with Aspiration on day one, and we always were excited about building a financial partner for people who had a real sense of conscience," Horigan told mbg.
We spoke with Horigan about the significance of saving with a conscience and what an environmentally friendly alternative to managing your money looks like at Aspiration.
What do you wish more people knew about how their money in the bank affects the planet?
A lot of people who live and spend with wellness and ethics in mind don't realize that their own bank deposits might be contributing to fossil fuel drilling or exploratory projects that harm the planet. But the money in your bank account doesn't just sit there in a vault. In the three years since the year of the Paris Climate Agreement, big banks have used the deposits of millions of Americans to help them finance over $450 billion of fossil fuel company needs. They lend their customers' money to projects like coal mining, coal plants, tar sands, mountaintop removal mining, oil drilling, and removing rain forest to drill for fossil fuels.
Do you see a growing trend with people seeking out more socially or environmentally minded alternatives for banking as a way to express their values?
We've seen that happening with the rise of sustainable investing over the past decade, but there wasn't a real alternative for people who wanted to bank with ethics and the environment in mind. But now a lot of people, especially younger people, are "voting with their dollars" when it comes to their banking and investing in the same way they [shop] for clothes or coffee or groceries.
Any common mistakes or misconceptions you see when it comes to ethical banking?
One big myth about ethical banking is that you need to sacrifice "doing well" in order to "do good." The truth is exactly the opposite. For instance, at Aspiration we offer a high interest rate, with deposits that do not fund fossil fuel exploration or production and extra rewards for shopping at businesses that do better for people and the planet.
So, Aspiration isn't a bank—what's the most noticeable difference between managing your money at Aspiration versus a traditional bank?
Generally, banks aren't really known for offering great interest rates and haven't been offering cash back rewards to customers, whereas we have the freedom and flexibility to do that now and to build this as a cash management account.
The Aspiration Spend & Save account is a cash management account provided through Aspiration Financial, LLC (a broker/dealer, not a chartered bank). It offers up to 2% Annual Percentage Yield (APY) interest on deposits. There are no fees, apart from a 'pay what is fair' fee that customers can set to zero if they choose. In addition, all extra services are provided at cost, meaning you'll only be charged what it costs to provide the extra service (a list of charges can be found here). And it combines spending benefits—like unlimited cash back rewards and zero ATM fees—with savings benefits such as a competitive interest rate.
How is Aspiration able to offer fossil-fuel-free deposits?
In the Aspiration Spend & Save or Save account, your dollars are swept to institutions around the country. We work with those institutions to make sure they're not lending to oil drilling, gas pipelines, and so on.
What's the most common reason people are opening an Aspiration account?
Offering up to 2.00% APY interest and cash back rewards doesn't hurt, but that's honestly not the [biggest] reason. Most people don't trust their bank to honor their interests and their values, and they come to Aspiration because of our mission. They want not just savings in their pocket but a chance for those savings to help do good in the world.
So, how hard is moving your money anyway?
Knowing that investing alternatives like Aspiration exist and then committing to moving your money away from fossil fuel funding is just the first step—the next is actually doing it! And while the process of moving your money over to a new institution might sound like a big undertaking—there are a few one-size-fits-all tips that can help simplify it:
- Do your research. Switching over to a platform that doesn't compromise your values is a big move, so give yourself plenty of time to figure out your options and make a decision you're comfortable with.
- Ease your way into it. When you open your new account, you may want to start by transferring the minimum ($10) deposit and do a bigger transfer later. It's also not a bad idea to keep some cash in your old account as an added layer of cushioning in case you miss any automatic bill payments while moving over.
- Be mindful of automatic payments and linked accounts. Go through your monthly statements and identify any recurring payments and transfers, and set those up with your new account. If you get direct deposits from your employer, request a new form from your HR rep to route your checks into your new account. And don't forget to link any payment systems you use, like Venmo and Apple Pay, to your new account or card when it arrives.
- Send the message. When you close your old account, let your bank know why! Speaking out about why you've made the choice to move to green helps send the message to big banks that their policies are clashing with their customers' values. The hope is that they'll make their own big moves sooner rather than later.