By Jon Swartz
Joe Sanberg has big plans for the economy, and maybe himself.
The tech entrepreneur and investor wants to lead a tech revolution as a corporate White Knight, and possibly throw in a run for public office. But his foremost goal is to lead the “good economy,” a movement quickly gaining name recognition and the attention of big business amid intense interest in environmental, social and governance (ESG) investing and consumer habits.
“I believe we serve where we are needed. I’m always considering the ways I can help those in need — including running for office. If I ever conclude that’s where I’m needed to serve, then I wouldn’t hesitate,” says Sanberg, 41, co-founder of financial services startup Aspiration.com , and a public policy advocate for labor, corporate responsibility and climate initiatives in California. In 2019, he entertained a run as a presidential candidate declaring a war on poverty and homelessness, and he could possibly run for public office in the near future.
“The next 10 years of tech-driven innovation will be about the creation of the ‘good economy’ — like the past 10 years were about the sharing economy,” Sanberg told MarketWatch. “The good economy is not just about conscience, but consumers are demanding it.”
A prime example — Sanberg calls it an “anchor” of the movement — is Aspiration, backed by venture capital funds and the likes of actors Leonardo DiCaprio and Robert Downey Jr. The latter’s Footprint Coalition Ventures was part of a $50 million investment round on Jan. 27 that raised Aspiration’s total investments to more than $250 million.
“The work [Aspiration is] doing is critically important,” says Mark Wexler, co-founder and managing partner of Just Business , an impact-investment firm. “It’s important to know that your money is not destructing the environment. This is the big play that major companies can make in how they invest and in helping people.”
The Los Angeles–based company, which deems itself a platform for automated ESG impact services for individuals and organizations, features a “Plant Your Change” service that rounds up debit-card purchases to the nearest dollar and uses the change to plant trees. To date, Aspiration has planted more than 5 million trees.
“Aspiration will be to the ‘20s what Airbnb /zigman2/quotes/222990650/composite ABNB +1.90% and Tesla /zigman2/quotes/203558040/composite TSLA +0.13% were to the teens,” in terms of influence on the confluence of tech, politics and society, Sanberg says.
Sanberg, an ex-Wall Street executive and investor who has been vocal about corporate responsibility for years, was a lead investor in Blue Apron Holdings Inc. /zigman2/quotes/203710464/composite APRN -6.31% , the largest fresh meal-kit company in the U.S., and IVY, a leading social university. He also serves on the board of Multiplying Good, which involves more than 1 million young people in volunteerism and public service each year.
Sanberg’s political beliefs and his startup are intertwined in what has been a popular — or essential, the more cynical might argue — pivot by businesses to be more socially active.
Though its origin stretches back years, the good economy movement is growing into as much a necessity for a company’s business plan as 401K plans and lobbying efforts. General Motors Co. /zigman2/quotes/205226835/composite GM +0.17% and Ford Motor Co. /zigman2/quotes/208911460/composite F -0.08% , for instance, have vowed to commit fully to electric vehicles by 2035. International Business Machines Corp. /zigman2/quotes/203856914/composite IBM +0.76% last week said it plans to reach net-zero greenhouse-gas emissions by 2030. Companies that have defined themselves by larger goals beyond their business have flourished, like Beyond Meat Inc. /zigman2/quotes/211617595/composite BYND +0.12% , which has seen shares gain 50% over the past 12 months as it pushes to get meat-eaters to opt for a more environmentally-friendly diet.
For these companies, recent consumer surveys underscore the importance of brand trust, which ranked as one of the five most important criteria for consumers, at 81%, according to an Edelman survey released last year. When asked if they chose, switched, avoided or boycotted a brand “based on its stand on societal issues,” 64% said yes in 2019, compared with 51% in 2017.
About three-quarters of U.S. adults consider reducing their environmental impact as “either a major or minor influence on both their personal behaviors,” a Morning Consult poll in late January found.
The broader investment world is getting on board, too. MSCI, one of the leading providers of indexes for the financial markets, is seeing demand for ESG ratings and index products outstripping growth in its traditional stock index business .
“We’re giving people a way to match up their money and their morals,” Aspiration Chief Executive Andrei Cherny told MarketWatch. “What we’ve seen amid COVID is people switching to plant-based meat, and being more attuned to the environment. Consumers are thinking more about their values than they have previously.”
To that end, Aspiration says it is working with several unnamed companies, including a real-estate firm in Southern California, on good-economy partnerships.
An e-book from early 2016 called “The Good Economy” imagined such an evolving economic system, circa 2020-’40, with “new approaches to production, work, organization, governance, and eventually politics.