Published 2 years ago.
About a 5 minute read.
Virgin Money’s sustainability-linked loans will reduce finance costs for businesses that proactively help the transition to a more sustainable economy; and Aspiration’s new credit card will enable consumers to work toward a ‘zero’ carbon footprint.
Image credit: Andrea Piacquadio/Pexels
Virgin Money — a collaboration with Clydesdale
Bank and Yorkshire Bank that calls itself a “disruptive force in UK banking” —
announced this week it is launching sustainability-linked loans (SLL) for all UK
companies. The SLLs, available in late Spring, will reduce the cost of finance
for those businesses whose core activities proactively help the transition to a
more sustainable economy. Virgin Money is the first bank in Europe to offer such
loans in commercial banking.
The methodology behind this was created by Virgin Money in partnership with the
Future-Fit Foundation, creators of the
— and is delivered through a series of conditional questions assessing current
Environmental, Social and Governance (ESG) performance; and helping businesses
to prioritise and take action to make further progress. The outcome provides
companies with an objective assessment of the negative and positive ESG impacts
associated with their business activities, which are a necessary step toward
reaching the UN Sustainable Development
The sustainability-linked loans will launch in late Spring 2021, with a digital
version of the questionnaire tool also available for customers and non-customers
alike on the Virgin Money website at the same time. For eligible customers
borrowing at least £250,000 and with a sufficiently strong ESG assessment, the
SLLs will have no arrangement fee. Virgin Money has committed that 5 percent of
all its business loans will be to firms driving environmental and social change
by September 2022, as judged by the tool.
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Even during a pandemic and global economic uncertainty, becoming more
sustainable is important to the majority (85 percent1) of UK SMEs, according to
Virgin Money research — but just under half (43 percent) have managed to
translate this into clear targets. However, the imperative to do so is clear —
as more and more consumers say a company’s environmental and social policies
help them make spending and purchasing
Virgin Money’s research also shows that over half (57 percent) of SMEs say cost
has made it difficult for their business to be more sustainable. These costs are
often absorbed by the company (29 percent) or shared between the company,
customers and suppliers (20 percent).
Graeme Sands, Corporate and Mid-Market Director at Virgin Money,
said: “While businesses overwhelmingly recognise the importance of
sustainability, many — especially SMEs — struggle to translate good intentions
into a clear plan, and are worried about the cost and time involved in
implementing an ESG programme.
“This is why we partnered with Future-Fit Foundation — to help SMEs and other
businesses manage and measure sustainability. The benchmarking tool enables us
to identify those businesses with capabilities that proactively drive other
companies or consumers to create a more sustainable society and the loans will
help these companies grow faster and help relieve some of the cost pressure. We
firmly believe that we, and other banks, have a duty to direct capital
“Every business must play its part in solving today’s most pressing social and
environmental challenges — not only to ensure we transition our economy to
operate within planetary boundaries and to meet societal needs, but also because
it makes sound business sense,” says Future-Fit Foundation co-founder Martin
Rich. “Any organisation which fails to step up is at risk of losing its
customers and potentially its licence to operate. Getting started can be
daunting, not least for SMEs — which is why we’re excited about our
collaboration with Virgin Money, who share our vision not only to make a
positive impact but to help others do the same.”
To highlight the importance of a strong sustainability agenda for SMEs and
provide other banks with advice on how they can help, Virgin Money and
Future-Fit Foundation have jointly published a case study
including details of the assessment tool.
1 Survey conducted by Censuswide: SMEs – 1,006 respondents who are senior
decision makers in SMEs, survey conducted 19 to 23 October 2020.
Image credit: Anete Lusina/Pexels
Meanwhile, Aspiration — a certified B Corp that
empowers customers to spend, save, and shop in ways that protect the planet —
recently announced the upcoming launch of its first credit card, Aspiration
Zero. The company says the first-of-its-kind credit card will bring the
average US user to carbon-neutral status just through regular use — with
cash-back rewards when they do so.
“There are plenty of credit cards out there that let you rack up miles; this is
the only card that rewards you for taking miles off of the planet,” Aspiration
co-founder and CEO Andrei Cherny said. “For the first time, you can have a
climate change-fighting tool right in your wallet.”
Each time the credit card is used, Aspiration will plant a tree through its
global reforestation partners; and by rounding up their purchase to the nearest
dollar, the customer can plant one, too. Through the Aspiration app, members can
track their progress in eliminating their carbon footprint through these
offsetting activities. Every month in which a user gets to carbon ‘zero,’
Aspiration will reward them with up to 1 percent cashback on all of their
Aspiration Zero is the latest in a growing arsenal of tools aimed at helping
consumers manage their impacts through their purchases. In 2018, Ben &
Jerry’s scoop shop in London
the world’s first retail platform — powered by the Poseidon Foundation’s
and blockchain — that allows businesses to measure the carbon footprint of
financial transactions in real terms. The platform gives retailers and their
customers the opportunity to support action on climate change by helping fund
forestry conservation projects around the world when they buy and sell everyday
Now, with the launch of the Zero credit card, Aspiration has a complete
ecosystem of “clean money” products —
from accounts that help customers save fossil fuel free, debit cards that let
them track the impact of their spending on people and the planet, and investment
and retirement accounts that bring sustainable options to all.
People can sign up for the Aspiration Zero waitlist
at www.aspiration.com/zero. For every sign up
to the waitlist from a personal referral, Aspiration will plant ten trees.
Published Mar 25, 2021 2pm EDT / 11am PDT / 6pm GMT / 7pm CET