Karma Wallet is banking on a recipe of behavior change, fintech and systems change to create a critical mass of consumers able to turn intent into action and pressure brands to make the broader changes the world needs.
Fintech is increasingly gaining momentum as a driver of social and environmental change. When it comes to helping individuals understand their impacts, personal carbon/impact tracking is now a feature on several European banking apps and a growing array of offerings from companies such as Doconomy and Aspiration.
Another new tool in the kit is ImpactKarma’s Karma Wallet — a self-described ‘Mint of impact spending’ that is aiming to reduce the consumer quandary around individual climate action with a free spending-habit platform empowering users to identify brands with responsible business practices, understand the carbon footprint of their spending, and offer opportunities to offset that footprint through a partner organization. Users simply sign up, link a card, and start shopping impact-driven brands to boost their Karma Score — essentially a credit score for personal spending impact.
Karma Wallet is banking on the marriage of behavior change, fintech and systems change to create a critical mass of consumers able to turn intent into action and pressure corporations to make the broader changes the world needs.
“There is a big gap between intention and action,” ImpactKarma CEO and co-founder Jayant Khadilkar told Sustainable Brands™. “A lot of us want to spend on conscious companies, but we don’t do it; and it’s because we don’t have the tools to do it. What we’ve created is a bridge between intention and action, to help consumers move from thinking about doing good to actually doing good.”
Corporate sustainability communications are still too often marred by misinformation and greenwashing, increasing public skepticism; so, brand marketing is an unreliable tool for making informed choices. On the other hand, wading through the oceans of available information is unrealistic for most shoppers. Karma Wallet draws company data from over 30 independent sources — which it then maps to a corresponding target in 16 of the UN Sustainable Development Goals (SDGs) and aggregated social and environmental impact. If a company meets a threshold of targets, Karma Wallet indicates the company is making a positive impact.
The best change, Khadilkar says, is when a consumer shifts to purchasing from better brands — thus fostering systems change through grassroots purchasing activism.
ImpactKarma is poised to launch a vertically integrated one-stop shop for understanding, quantifying and taking action on the impact of personal spending. But placing the responsibility to act on individuals alone is only one piece of the puzzle: Systems change is what is truly needed.
Creating a movement
ImpactKarma seeks to harness the power of behavior change at a massive scale to influence the institutions most responsible for steering the global economy toward a sustainable future.
“We are helping consumers change their habits — and with that, demonstrate to corporations that people are moving away from them in order to buy from someone more sustainable,” Khadilkar explains. “We are creating a movement that will put pressure on the corporations.”
Companies take cues from two external sources, Khadilkar said. Investors are on the one side, demanding responsible corporate action. On the other is an eager but largely unengaged consumer base, with little more to go on than unreliable brand marketing. Khadilkar endeavors to put Karma Wallet in enough people’s pockets to continue driving brands toward systems change.
Soon, ImpactKarma will show customers alternatives to brands with less-than-stellar ratings, giving them leverage. With cashback, discounts, etc, the platform will further incentivize customers to change their spending habits in support of good actors, using aggregated consumer spending data to nudge companies in the right direction.
For now, ImpactKarma is building user acquisition and establishing itself as a trusted player in consumer education and action. In the short term, it is focused on providing cashback rewards for shopping sustainable businesses — a feature Khadilkar expects to roll out later this month.
If a company scores high enough on Karma Wallet, users can select the merchants’ provided cashback reward, shop, and have cash automatically deposited into the user’s Karma Wallet account — where it can be pocketed or applied towards other planet-positive projects, such as carbon capture.
Behavior change: Can it work?
Karma Wallet is a bridge between individual behavioral change and systems change — two complementary, and necessary, aspects of effective climate action. According to Khadilkar, this dual approach appears to be working: An internal ImpactKarma survey discovered that 94 percent of surveyed users felt Karma Wallet influenced their purchasing decisions, and 87 percent would recommend the platform to others.
ImpactKarma has noted 60 percent of its users boosting their Karma Score, which suggests the platform is playing a role in helping consumers find agency.
“We’ve seen a steady trend in increase [in Karma score],” Khadilkar said. “What that means is that people are spending more on good companies, and less on not-so-good companies.”
ImpactKarma sees itself in a unique position to effect scalable behavior change due to its portability across financial systems and its vertically integrated approach to social and environmental scoring, combined with time-proven incentives such as cashback rewards.
“There is a trend of individuals shifting to more sustainable banks,” Khadilkar said. “We can provide the mechanism to banks so that they can attract a younger population.”
Karma Wallet could also be used as a reporting tool, he said — with banks, employers and other institutions able to use aggregated stakeholder impact scores to quantify how its customers and employees are making an impact.
More conscientious shoppers want to align with employers and institutions that walk their sustainability talk, and Karma Wallet could be a useful tool for this cohort to demystify the process of shopping their values.