27 January 2022 |

COOL OR NOT: CARBON NEUTRAL CREDIT CARDS

By Nick Van Osdol

COOL OR NOT: CARBON NEUTRAL CREDIT CARDS

If you live in NYC, you’ve definitely seen them. Advertisements for ‘carbon-neutral’ credit cards, that is.

With interest rates at record lows, consumer credit has become increasingly commodified. As a result, card issuers have to look for more creative ways to attract new customers.

Some offer miles. Some offer cash back bonuses. Some tout security.

Now? The ‘green’ credit cards are here, appealing to an emergent cohort of younger climate conscious consumers 💳🌱.  But what does it mean for a credit card to help reduce your emissions footprint though, as advertised in the image one of our readers snapped above? (thx Brett!) 

Let’s dig in to the claims and the mechanics 👇.

THE PRODUCT

Let’s take a look at Aspiration Zero, the card advertised in the picture above and below. The card touts “Zero carbon footprint” as a key value proposition.

Credit card that advertises 'zero carbon footprint'

There are two immediate open questions for me here:

  1. What’s the ‘scope’ of the emissions the card issuer purports to offset?
  2. How do they actually execute on that offsetting process?

For the first question, Aspiration uses an “estimated average carbon footprint of 14.95 metric tons per person per year” for consumers in the U.S. 

This is an emissions per capita calculation, not a personal carbon footprint calculation. Said differently, it’s all of the U.S.’s annual emissions (many of which come from things that you have little say or involvement in) divided by the total population. It’s not a bottoms-up calculation of the emissions attributable to your lifestyle. That said, it’s probably an overestimation of most people’s emissions footprint. So… fair enough for the sake of Aspiration’s claims! 

Next question. How does Aspiration accomplish the offsetting piece? The answer is reforestation: 

“We plant a tree every time you make a purchase…” 🌲

In addition to one tree per purchase, Aspiration offers the now popular ‘round-up’ concept to allow users to plant additional trees as well based on their spending. Further, the card comes with an app that lets you track tree planting progress and search for environmentally friendly merchants.

Aspiration’s reforestation partners are Eden ReforestationArbor Day Foundation, and One Tree Planted. I haven’t done a deep dive into these partners; I’m sure they all do great work. 

Don’t get me wrong. I love trees 🌲. But here’s where some of those caveats introduced earlier become important. E.g. that the trees will offset emissions “once grown.”  As Aspiration acknowledges, newly planted trees aren’t the same thing as an old-growth forest.

There are a lot of challenges with the traditional ‘plant a tree’ promise and its climate impact. For one, they have to be maintained and nurtured; if they don’t mature, they don’t remove carbon from the atmosphere. If they burn down or are logged later on, they release it back into the atmosphere.

There have been massive issues with the rigor of reforestation projects in the past, even (or especially) among the ones with the biggest name certifications 📉.

MY TAKE

Planting trees is often the cheapest path to making the emissions math work, which helps explain its prevalence as an emissions ‘offsetting’ tactic. 

If I were asked to design a carbon-neutral credit card? I’d take a different approach. 

In the same way Aspiration offers consumers more choices via their database of environmentally friendly merchants, consumers would probably enjoy choices for how to drive climate impact. For instance? Let consumers use points towards vetted carbon offsets or carbon removals in a marketplace. More rigorous and more fun!

Aspiration is actually already doing this on a smaller scale for all gasoline purchases customers make with their card. They track gas station purchases, use EPA data to make an emissions estimate, and buy carbon offsets accordingly.

That’s pretty slick. If they extended that model to apply to all points earned via card usage, alongside a public registry of offset projects they purchase from, I’d be interested. Maybe that’s on their roadmap. If they don’t do it, someone else should.

In sum? There’s a massive opportunity to integrate climate impact into the rewards and loyalty economy as consumers get more climate conscious. I think we’ll see a wave of Aspiration-esque products in short order 🌊.

KEEP COOL’S PITCH COMPETITION

ICYMI, we’re hosting a pitch competition to celebrate our joining Workweek. Here’s the twist – it’ll be hosted 100% within a mini-series podcast format. You can find more details here

Are you a founder, operator or investor in an early-stage climate tech project or company? Want to be part of Keep Cool’s inaugural pitch competition? We’re looking for 5 total teams to come and pitch… make sure to apply this week! Apply Now →

Here’s our pitch to you on the value proposition:

  1. Pitch at scale: Why pitch one investor at a time? As part of our podcast, you’ll pitch in public and get lots of exposure to climate tech investors who listen.
  2. Evergreen content & distribution: Keep Cool will create written content to amplify the featured companies + we’ll write a deep dive on the winning team.
  3. Network effects: We’re excited to curate questions and feedback from and make valuable connections for you with our readers and listeners.
  4. And more: Plus ad credits and job board credits from Workweek!

We’re stoked to break into audio content with this competition. We’ll share more once we know who the teams and the investor co-hosts will be.

MORE COOL STUFF ✌️

🔎 Staying sane: When I’m in the flow of researching climate tech trends, the last thing I want to do is slow down to document and save all the tabs I have open. Instead, I’ve been enjoying Heyday, a browser extension that automatically tracks what you’re googling and reading online. It makes it way easier to find sources again later on. Try it for yourself today!*

🐕 For the dog lovers: Want to make sure there’s still a planet (with dogs on it) to enjoy in 50 years? ChippinPet is here to help with dog food that’s 80% less resource intensive than its alternatives. And it’s great for your dog too. Check it out here!*

🏠 What I’m daydreaming about: This one’s both climate tech and not, but I am now obsessed with these off-grid, funky eco dwellings. I need to get out and see these in person.