You can save the planet with a swipe of your bank card. That’s the enticing proposition made by a company called Aspiration, which promises to take the leftover change from customers’ purchases and use it to plant trees around the world. Aspiration is on track to spend $149 million this year marketing that message, according to its financial documents, considerably more than the revenues the company expects to take in.

“Clean rich is the new filthy rich,” Aspiration proclaims on billboards across New York, Texas and California. Other ads, ubiquitous on social media, feature images of Aspiration’s debit card, which depicts a green treescape and is made from recycled plastic. The likes of Leonardo DiCaprio, Orlando Bloom, Robert Downey Jr. and Drake have invested in the company. Aspiration has received enthusiastic press coverage (with the exception of a critical dissection by New York University marketing professor Scott Galloway). And the company won further headlines in September for its reported $300 million, 23-year sponsorship deal with the Los Angeles Clippers, which will feature Aspiration’s name on signs inside the Clippers’ new arena, give the company a role in sustainability initiatives and put its logo on the jersey of every Clippers player.

Aspiration is part of a wave of digital companies promising to help the environment while providing convenient but otherwise mundane services like checking accounts and debit cards and the occasional investment account. Its claims seem to justify the “green” mantle: Aspiration has said it has planted 35 million trees over the past 12 months. And it touts its mutual fund, which it says is “free” of fossil fuels. Aspiration and its executives routinely make these claims and use these figures in their statements, in their marketing and advertising, and in some cases in federal regulatory filings.

But many of Aspiration’s claims seem to fizzle somewhere between their marketing language and the footnotes in their own legal documents. For example, Aspiration boasts that it has “5 million passionate members.” But the fine print in an investor presentation prepared by the company explains that a “member” is defined as anyone who has ever signed the terms and conditions in preparation for opening an Aspiration account — even if that person never actually opened the account or deposited a penny in it. Aspiration’s actual tally of active customer accounts was 592,148 as of June. That includes all checking, savings, credit card and investment accounts.

Aspiration’s signature marketing claim — about its tree-planting program — turns out to be overblown upon closer examination. “In the past year, the Aspiration community has planted over 35 million trees,” CEO and co-founder Andrei Cherny said on an Aug. 18 webcast announcing that his company would go public by merging with a special purpose acquisition company, or SPAC, in what was billed as a $2.3 billion deal. He later added that the company now plants “as many trees every day as there are in Central Park.” (More broadly, Cherny said, “Sustainability is our product. It is the business we are in. It is what we deliver to our customers whether they are individuals or businesses. It is our mission.”)

The footnote for one of Aspiration’s two main tree programs presents a different picture than Cherny did: “The advertised number of trees planted is the cumulative total of to-be planted trees...” In other words, that 35 million figure included millions of trees that had not actually yet been planted.

After weeks of questions from ProPublica, during which the company declined to say how many seeds or saplings have actually been planted, Aspiration said the actual number is 12 million. In a written response for this article, Cherny said, “The Aspiration community has supported the planting of more than 35 million trees, an amazing accomplishment we’re really proud of. Over 12 million of those trees are already in the ground, with more being planted every day.” He added that it can “take up to 18 months” for its partners to put a tree in the earth.

ProPublica attempted to confirm these figures with the three organizations Aspiration uses to plant trees. A spokesperson for Eden Reforestation Projects initially declined to provide any numbers, citing confidentiality restrictions, then later emailed and offered a higher figure than Aspiration provided: “The current total of trees planted for all project sites that Aspiration sponsors is 16 million trees.” A second Aspiration partner, Arbor Day Foundation, told ProPublica it planted 6,000 trees for Aspiration between early 2019 and Aug. 1 of this year. “There are currently no agreements in place with them at this time,” a spokesperson wrote in an email. A spokesperson for the third partner, One Tree Planted, confirmed that Aspiration “supported one reforestation project with us so far,” but declined to comment further, citing “confidentiality/non-disclosure commitments.”

There’s a second key footnote, one that appears in materials for Aspiration’s signature “Plant Your Change” offering. That program lets consumers who use a debit or credit card — whether provided by Aspiration or an unrelated financial institution — choose to have every purchase rounded up to the nearest dollar, with the “change” used to plant a tree. It generally costs 10 cents to plant a tree, according to Eden, and Aspiration will fund one tree for each purchase. In other words, whether you bought an item that cost $9.89 or $9.09, the leftover change will be used to plant one tree. What happens to the remaining 81 cents in the second example? It goes to Aspiration, which says it uses it for “administrative costs, marketing and promotion costs, third-party vendor fees, and other conditional costs.” It also notes that “Aspiration may retain, dependent upon the Service Fee for a particular transaction, the remainder.” (Cherny responded, “There is a lot more involved in a large-scale tree planting initiative than just the individual cost of the trees, and there is infrastructure that needs to be funded in a program of this size and scale.”)

The sorts of tree-planting programs Aspiration and its peers are engaged in have mixed reputations even when well-executed. “It’s easy to tie tree-planting to a transaction,” said Forrest Fleischman, associate professor in the Department of Forest Resources at the University of Minnesota. “But if someone says they are planting a tree every time X happens, it doesn’t really tell you they’re doing a meaningful activity, and it very well could be a method of greenwashing.” The process requires a long-term commitment, Fleischman said, adding that effectively growing a tree in a proper environment and making sure it survives is a 20-to-50-year proposition. “This focus on the number of trees planted is not a meaningful measure of your impact on the ecosystem,” he said.

Cherny countered: “It’s scientifically proven that trees take carbon out of the atmosphere, and the more trees we plant today, the more sustainable our planet will be for decades to come.”

Aspiration’s investing arm also appears to be less environmentally friendly than the company’s marketing suggests. It offers a mutual fund called Redwood, which Aspiration describes as a “fossil-fuel-free fund investing in sustainable businesses that are leaders in their industry.” The fund excludes stocks of companies with more than 5% of their sales in such industries as alcohol, tobacco, defense, nuclear power, gambling and pornography, and completely rules out shares of firearms issuers and companies within the oil and gas category, including companies that provide services to oil and gas companies. The formula, according to Aspiration’s marketing language, adds up to “the triple bottom line of profit, people, and the planet.”

But the mutual fund’s latest shareholder report, filed with the SEC, reveals that it owns shares in multiple companies that are either huge users of fossil fuels or are in the industry itself. Shares of Southwest Airlines, whose airplanes and operations emitted 12.6 tons of greenhouse gases in 2020, make up almost 3% of the fund. That’s more than the fund’s holdings in sustainable energy stocks, which combine to make up 2.3% of the portfolio.

The Fund also owns a stake in MSA Safety, which sells safety equipment to the oil and gas industry, among others. In addition, the company that runs the mutual fund on Aspiration’s behalf is the asset management arm of UBS, a giant bank that is on a list of the biggest fossil fuel financiers in the world that Aspiration cites on its website. “We are proud that Redwood earned an A grade from the gold standard As You Sow, calling it a 100% fossil fuel free fund,” Cherny said. (As You Sow is an independent organization that grades investments on various environmental, social and corporate governance, or ESG, measures; it doesn’t count industries that use large amounts of petroleum, such as airlines or shipping, as fossil fuel companies.)

“The problem we see with Aspiration is that they fall classically in that ESG space, and it is less bad,” said Zach Stein, co-founder of Carbon Collective, an investment advisory firm that constructs portfolios with low climate impact. “That does not mean it’s good. There is a gap between those two.”

When it comes to Aspiration’s claims about its own finances, here, too, it’s worth reading closely. In large letters in its investor presentation, Aspiration declares the business “cash flow positive”; beneath that, in smaller letters, are the words “before marketing expense.” Aspiration relies on a yardstick that most companies don’t use: “Adjusted EBITDAM.” That stands for earnings before interest, taxes, depreciation, amortization and marketing.

Excluding spending on marketing from a calculation of its profitability — when marketing is both a routine cost and by far the company’s biggest expenditure for the foreseeable future — is striking. “It’s very strange to represent your overall finances in that way,” said Daniel McCarthy, a marketing professor at Emory University who specializes in customer-based corporate valuation. “I haven’t seen any other company do that before.”

Aspiration’s Chief Financial Officer, Rojeh Avanesian, defended the use of EBITDAM in the August investor call, saying, “We believe EBITDAM to be the appropriate profitability metric for us to use given the historic growth opportunity and lifetime-value to acquisition-cost ratio that we are experiencing,”

Aspiration’s results certainly look better using the company’s preferred metric. According to the investor presentation, as of October, Aspiration estimated its 2021 adjusted EBITDAM will be positive: $536,000. If you count the company’s marketing expenditure by using the more traditional EBITDA, which Aspiration provides on the same page of the investor presentation, the result is a loss of $149 million.

It does appear Aspiration will have plenty of cash on its balance sheet when it receives $412 million from the SPAC that is acquiring it in the transaction that will make Aspiration a public company. The press release described the merger as a $2.3 billion deal, a figure that refers to the “implied equity value,” an extrapolation based on the price paid by the SPAC for 23% of Aspiration’s shares.

If you believe the company’s projections, Aspiration has a very green future (in both the environmental and profit sense). But the fine print in the company’s materials suggests it has a long way to go to get there.

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