Kedar Karkare: 0:03

Increasingly social impact and sustainability and values are differentiators for brands, right? I think as we move, especially in consumer products. At some point, the product itself becomes commoditized and it's the brand that matters. And so brands are always looking for what do my customers care about? How do I compare to other brands or companies in my category?

Tom Raftery: 0:34

Good morning, good afternoon, or good evening, wherever you are in the world. This is the Climate Confident podcast, the number one podcast showcasing best practices in climate emission reductions and removals, and I'm your host, Tom Raftery. Don't forget to click follow on this podcast in your podcast app of choice to be sure you don't miss any episodes. Hi everyone, welcome to episode 158 of the Climate Confident podcast. My name is Tom Raftery, and before we kick off today's show, I want to take a quick moment to express my gratitude to all of this podcast's amazing supporters. Your support has been instrumental in keeping the podcast going, and I'm really grateful for each and every one of you. If you're not already a supporter, I'd like to encourage you to consider joining our community of like minded individuals who are passionate about climate. Supporting the podcast is easy and affordable, with options starting as low as just three euros or dollars. That's less than the cost of a cup of coffee and your support will make a huge difference in keeping this show going strong. To become a supporter, you simply click on the support link in the show notes of this or any episode or visit tinyurl. com slash climatepod. Now, without further ado, with me on the show today, Kedar. Kedar, welcome to the podcast. Would you like to introduce yourself?

Kedar Karkare: 2:01

Thanks for having me, Tom. Yeah, sure. My name's Kedar. I am a co-founder of a company called Karma Wallet, where we are really trying to build a more transparent and ethical financial system where consumers can grow their wealth and also grow the positive change they're creating in the world at the same time

Tom Raftery: 2:21

Okay. Not at all ambitious.

Kedar Karkare: 2:24

I like to think big

Tom Raftery: 2:26

Tell Yeah, why not? Good for you. Tell me Kedar give some background to this. What was the kind of Damascene moment where you decided you needed to change the world's financial system?

Kedar Karkare: 2:40

Yeah, I don't, I don't know if I'm gonna change sort of the bones of the financial system, but certainly create some, you know, better incentives for people to, to use their money for good. But yeah, where this started is, you know, I'm, I'm not really a finance person by background. I'm actually a scientist, so I have a PhD in evolutionary biology. Graduated from that. Got into the workforce, was working as a data scientist, a market researcher, startup investor. And as I was outta grad school, starting to think about like the contribution I'm making to society, to the world, was thinking a lot about how I can create a better place for everyone. And all, for me, sort of the conclusion that I came to is that there's really two ways that all of us do that primarily. One is through the jobs that we have. We spend most of our time doing that. And then the second one is where and how we use our money. So what happened for me was I was volunteering and recycling and composting, and I just always had this feeling of like, is it really doing anything right? I spend money at all these different businesses and corporations every year. And I'd like to think that I'm putting it to good cause and you know, I try to figure out which companies are ethical or sustainable, but at the end of the day it kind of feels like I click a button, send my money away, and I just don't really know what it's doing. So yeah, I, actually called up my father who was a entrepreneur in the past. And so we co-founded this company together to really help consumers understand where they are putting their money. There's a lot of work that's been done amazing work from, like, from an investment perspective, but the reality is that probably 95% of US consumers spend just way more money than they invest every year, right? You have to spend your money to live. And so we felt like there was an opportunity to show people and help people support the right kinds of businesses when they are spending every day.

Tom Raftery: 4:53

Okay, so how do you do that?

Kedar Karkare: 4:56

Great question. So we spent about three years just building a data platform that really underlies and serves the infrastructure for the financial products that we're now offering. The data platform, what it does, it was, you know, based on this realization that as there's more regulations around transparency for sustainability, as consumers are demanding more information, there are different certificates and ratings agencies and nonprofits and publications and news media that are starting to cover and publish some data around what are the brands that we buy from doing out there. But it was all really disparate. It was not aggregated. It was hard as a consumer to figure out what a given company was doing when it came to sort of the social side of things or the environmental side. So what we did is we spent a few years just collecting all of that data, aggregating it, synthesizing it. We map it to a framework provided by the United Nations to provide some consistency about how do we think about whether brands are, are good or bad ultimately. So we now track almost 20,000 different consumer brands. We have, you know, millions of sort of real time monthly data points on those brands that we provide to consumers. And all that data's free. So we're never going to charge consumers for that. It's, we feel like it's a right that we, that we should have as. There's people spending in this economy, and ultimately what that data allows us to do is that when you use one of our financial products, when you make a purchase, we can then show you what is the real world impact of the money that you just spent.

Tom Raftery: 6:49

Okay. A lot to unpack there, I guess. The first question I would have is, what kind of data points are you tracking? Because, you know, the, the, the sustainability space, the ESG space, it's quite broad, so it covers everything from forced labor through to, and you mentioned the UN SDGs, so things like clean water use, energy, clean energy, et cetera, et cetera, et cetera. What, what data points are you tracking per company?

Kedar Karkare: 7:23

It's a great question that could probably be its entirely own podcast with our data and data science team. But at a high level, what we really feel, you know, there's been a lot of focus on environmental impact, rightly so. What we feel like is that as humans in this, this world and this economy that we live in, people care about social issues and environmental issues, and so we try to provide more of a holistic view across those. You know, on the environmental side, we track things like plastic usage. We track carbon emissions, water usage, waste creation. On the social side of things, we track things like fair pay, ethical supply chains, we track if it's a women owned or minority owned company. So those are just a really small subset of the data points that we track. I think, you know, at this point we integrate about 40 different data sources and so that's, you know, millions of different data points.

Tom Raftery: 8:30

Okay. And I assume those data points aren't things like the annual CSR report, which came out in A PDF, which has, you know, which refers to the year before I, I'm, I'm hoping it's a little bit more real time and up to date than that.

Kedar Karkare: 8:47

Yeah, so there's, there's sort of three different ways that we collect data and, and show it to people. One of them is a bit of a lagging indicator. Which comes from certificates, ratings, agencies, sustainability reports. I think it's, it's hard to do truly real time data because companies aren't reporting in real time. That being said, what we also do in order to provide some of that real time information is that we use some of the new AI technology to go out and find real time news articles, press releases, et cetera, about these topics for companies. And then we pull out the meaningful data and information and then we show that to the consumer. And then lastly, we also work directly with companies because unless you're a publicly traded large corporation, it's highly unlikely that all of the data is going to be out there. And so we basically work directly with companies to help fill in some of the gaps and make sure that consumers are seeing the whole picture instead of just what they, what's available online?

Tom Raftery: 9:55

Okay. And how then would I as a consumer come across that information?

Kedar Karkare: 10:02

Yeah, so there's really two ways. One would be you know, you find out about our website through something you're reading, through one of our partners, and you can go to.

Tom Raftery: 10:13

listening to a podcast.

Kedar Karkare: 10:14

exactly. You can go to Karma wallet.io. You can, there's a button that I think it says browse and compare or browse and research. You can go through those, I think 18,000 something companies and look at the, the ratings and, and reports that we create. The second way, which I think is really the future of what we're building, is that we are building our own financial products and we're also integrating with other financial institutions so that you don't have to go to another, yet another website to go do your research before you make a purchase. It's actually integrated into your financial activity. So we see a future where your finances are more than just about your own money, but they're also about the change you're creating in the world. So when you make a purchase from say, Nike, you'll see here are the values they support. Here's their rating, here's the recent news about what they're doing in the world to help you make an educated decision about do I want to continue supporting this company? Or are, is there an alternative that I'd like to look for?

Tom Raftery: 11:20

Okay, and does that information come to me before I make the purchasing decision, or once I've made the purchasing decision?

Kedar Karkare: 11:30

Yeah, so it's a good question. The way we are approaching it currently is that it's primarily after the purchasing decision. Obviously the information is there and available for consumers to find prior to a purchase. What we've found in our data, you know, there's, there's a ton of amazing, amazing research out there about how to use sort of sustainability or impact data to help drive purchases. But what we found is that, you know, I think most of us can relate, sometimes when you need something, you just need it. And you go to Amazon and you buy it, and you get it in a day because, you know, life. That we, so we found that some of this data actually has a much bigger drive or effect on loyalty to a brand than it does in the first purchase. So that's sort of our approach is, you know, we'd like to integrate prior to a purchase down the road, working with brands to show the data on their site, on the cart, on the checkout page. At this point we're looking at mostly post-purchase.

Tom Raftery: 12:39

Okay. And. You mentioned financial products. What are the financial products that you have?

Kedar Karkare: 12:46

Yeah, so we are launching our first financial product, this quarter. So it should come out towards the end of Q1. And it is a debit card, so it's a technically a prepaid reloadable debit card. What that means is that we ourselves are not a bank. All you have to do is essentially transfer money from your existing bank onto the card, and then you can spend it just like any other debit card anywhere that Visa has accepted. And as you make those purchases, you'll see here's sort of the impact of each purchase. Here's my cumulative positive change I'm creating. And you know, we understand that at the end of the day, it's important to create a financial benefit for our members. So we actually work directly with, with ethical and sustainable brands to provide unique and exclusive incentives and offers for our members to make those purchases. So you can earn up to 20% cash back when you use the debit card. And then down the line we'll have a point system, we'll have rewards. So that's our first product. It does, it doesn't require any credit check or any, you know, any new bank account. And so in a way, I think it's actually a really great product for us to start with because not only does it help consumers see the change they're creating, but it actually creates some more equity for people that want to make a difference, but maybe can't get a new credit card or a new bank account. They can easily sign up for our card, just transfer money onto it from wherever they have it. And then down the line we'll offer other financial products, you know, credit cards, investment accounts, et cetera.

Tom Raftery: 14:29

Okay. And you mentioned cash back. How does that work?

Kedar Karkare: 14:33

Yeah, so basically what we feel like is unique about Karma Wallet is that the people that sign up are inherently individuals that care about certain values. So everyone has their own, you know, background and identity and, and unique things they care about. But we ask people what those are when they sign up, we can see what those are based on the purchases they're making. And then on the other side, we have brands that are looking for consumers that share their values. And so we're able to make that connection. And essentially then the brand offers some percentage cash back as a deal for the consumer to provide some incentive, to go ahead and make that purchase and make that connection.

Tom Raftery: 15:22

Okay. Okay. And what kind of. Because you, you mentioned scoring on the website, for example, and I assume it'll be the same on your kind of balance that you get on your card. I assume there'll be an app on your phone or something that you'll be able to track your purchases and see, I've been doing really well this month, or really poorly this month, but what kind of scoring system do you have for companies? Is it like a zero to 100? Is it like, these companies are absolutely terrible? What were you doing spending your money with them? These companies are awesome. You know, where, where is it on that kind of scale?

Kedar Karkare: 16:01

Yeah, that's a great question. We spend a lot of time thinking about it. We actually have a number of different ways that we show sort of like a scoring or a rating. One of them is just a pure numerical scale, so it goes from negative 16 to 16. The reason it's 16 is because there are 17 United Nations sustainable development goals, one of which is really only applicable to to governments. So we take the remaining 16 and that's how we score based on the data we have. In addition to that numerical scale, we also think it's important to show what values does a company support. I think increasingly consumers are aware that, you know companies are made up of humans. Humans are not perfect. But if we can understand the values that a company stands for, then we can have some belief and trust that that's what they're working towards. So I think we have, about 30 or 35 different values that we track. So that would be things like fair pay, women owned, plastic neutral, forest friendly values like that. That's one way. And then the last way would be some of the AI work that I talked about is that we pull essentially snippets from what's available online and we make them really easy to read and understand, and we show the consumer, if you just wanna snapshot of what this company's doing in a certain category, let's say waste creation, this is what they're doing. When it comes to saying, you know, oh, you've been really bad this month. You've been really good this month. There's so much just like, I almost want to call it consumer shame out there, consumer shaming around like, oh, you made a bad purchase, or you shouldn't be supporting this brand. It's just like cognitive overwhelm. And so, I mean, based on really a lot of research across industries when it comes to behavioral psychology, what we do our best to do is use positive reinforcement. So things like sending an email saying, Hey, we know you care about supporting minority owned businesses and you supported four of those this week. So that's, I mean, that's amazing. Keep, keep up the great work. Or you know, you this month have contributed to X dollars to companies that pay fair wages. So that sort of positive reinforcement, I think actually creates more behavioral change and also just makes people feel better, right?

Tom Raftery: 18:39

Sure, and can you kind of set your priorities within the app as well to say, I'm really interested. You know, I'm interested in sustainability in general, but within that I'm really interested in this particular aspect of it.

Kedar Karkare: 19:22

Absolutely. So, those 30 or 35 different values that I mentioned. We have, basically a simple screen where you just click the ones that are most important to you, and then the way we calculate your karma score, as we call it, so sort of an idea of how, how good you're doing with where you're spending your money. It's based on the values that you specifically care about because we know everyone is unique. And then also the offers that you'll see, the companies that we'll recommend to you are the ones that are most in line with those values.

Tom Raftery: 19:54

Okay, so, you mentioned that the card is coming out, sometime this quarter, first quarter of 24. Do you have any other products available right now, or is that gonna be the first one to kind of hit the market and people can use?

Kedar Karkare: 20:15

Yeah, so that's, that's really the first financial product that we're offering. We previously, and it's still available online, although it's not a primary focus, we had created a way for consumers to just go see how they were doing so you don't have to pay us anything. Simply just link your existing credit and debit cards and then get an overview of, are these companies good or bad? What are some alternatives? So that, I suppose, could be classified as a product. But in terms of financial products, this is really the first one.

Tom Raftery: 20:48

Okay. And I'm guessing it's US only at the moment

Kedar Karkare: 20:52

Yes. So you have to be, you have to be a US resident to get the card. You can technically use it internationally. There are some international fees. But for all intents and purposes, it's a US card.

Tom Raftery: 21:06

Okay. Any plans to go beyond the US?

Kedar Karkare: 21:08

Absolutely. You know, I would love to. I think from a just from a starting point, you know, we're here in the US. I was born and raised here. Feel like I have a decent understanding or a better understanding of what Gen Z and millennial US consumers are looking for as compared to European or or even Asia Pacific. So that's why we started there. But yeah, I think the, the fundamental infrastructure of where we're building is that if we have the data about companies and brands in that region, we can integrate it with financial products.

Tom Raftery: 21:50

Okay. And where to next? The card launches sometime this quarter. What are plans for, you know, the next 5, 10, 15 quarters?

Kedar Karkare: 22:01

Oh 5, 10, 15. You're making me do math here. Like how many years is that? Uh,

Tom Raftery: 22:06

3, 4, 5 years, let's say.

Kedar Karkare: 22:08

Yeah. So there's really like two, there's two components of what we do. There's the Karma Wallet as a FinTech, you know, get our debit card. We will, likely launch a credit card in the future, have investment accounts, have donation accounts. You can use us as the place to grow your wealth and your positive impact on the world. That being said, if you look at the FinTech landscape, how companies have been built in the past, the realities of the situation are that a very small percentage of consumers would actually, even in the best case scenario, leave their existing financial institution or transfer money from there onto our product. So we feel like the market is big enough there for us to build a company. But ultimately there's another piece of the business, which is if you're already banking with Chase or Capital One or you know, one of the large US financial institutions. We will actually integrate with them so that you never have to leave. You can just see the change you're creating. You can see our data embedded within your existing banking products.

Tom Raftery: 23:23

Nice. Nice. I imagine, because if people are buying through Karma Wallet through the card, there's gonna be a lot of purchase data that you'll have visibility of. Are any any plans to make use of that data?

Kedar Karkare: 23:41

Yes. That's a great question. There's a few ways that we'll make use of the data. So, first and foremost, we will never sell personal data. We're not in the business of monetizing consumers. That being said, I think there's an interesting opportunity to de-identify, aggregate the data, and do essentially what amounts to research and reporting on consumer trends. Ultimately, what we're trying to do is connect people that share a certain set of values with the companies and brands that share those same values, and so there is a business to be built around helping brands understand what are consumers looking for? What do they say they want? What are they actually buying? And how can you build your business to better align with your ideal set of customers?

Tom Raftery: 24:33

Okay. Nice. On the, so we've, we've talked about the consumer side of the card. What about the, the flip side, the other side, the brands that people are purchasing from? Are they going to want to have access to this data, have access to this data, do anything as a, as a result of seeing this data?

Kedar Karkare: 24:56

Absolutely, you know, we've already started to get a, a decent amount of inbound requests from brands. Something to the effect of, why is my score this way? Or why isn't my score better or, can you tell me more details about it. So we're starting to see that brands do care about the way consumers are perceiving and receiving information. So there's that piece of it. And then the second piece is that increasingly social impact and sustainability and values are differentiators for brands, right? I think as we move, especially in consumer products. At some point, the product itself becomes commoditized and it's the brand that matters. And so brands are always looking for what do my customers care about? How do I compare to other brands or companies in my category? So yeah, I think there's a huge opportunity for us to actually help brands improve their own operations, improve the way they're communicating to their customers. So you can almost think of this as sort of like a three three part system. There's consumers, there's financial institutions, and there's brands. And so we envision Karma Wallet as really the infrastructure that sits in the middle to connect to those three so that everyone's incentives are aligned towards building the future we want.

Tom Raftery: 26:29

Okay. And. How do you protect consumers from companies greenwashing?

Kedar Karkare: 26:39

Yes. That is why we, for the most part, don't show data that is, purely from the company. So that's why, you know, early on we were talking about the data sources that we use, and I talked about certificates, ratings agencies, nonprofits, news media, like reporting. We try to stay away from too much company reported data. And when it is company reported or there's not, documentation to validate and verify, we will clearly show that this is unverified. This is an unverified claim. So we, I mean, that's, that was one of the reasons I wanted to do this, was I, I thought I had a an idea of which companies were good or bad, and I realized that it was entirely colored by greenwashing and advertising. So we try to stay as data-driven as we can. We as Karma Wallet, do our best not to be the ones deciding whether a company is doing good or bad. We simply take the data that's there, put it in one place, and make it easy to understand.

Tom Raftery: 27:46

Yeah, because I was looking through one of the categories on your website there, the automotive one, and I was surprised to find one of the companies that is a pure EV maker being rated negatively with a minus rating and a kind of a red banner. And I, I would've thought if they're a pure EV maker, you know, surely they'd get bonus points for that, but apparently not. And some of the le, the legacy automa automakers were getting at least neutrals if, if not positives. So, yeah. And, and you say it's, it's all data based. So interesting. It's, uh, it, it, it did surprise me, that one. So that's, that's, and I'm, I'm assuming that's across the board, that's not just automotive, that's in, in all the categories. There will be surprises for people there.

Kedar Karkare: 28:33

Absolutely. That's actually one of the things that we are always trying to solve is that we as members of the, the economy really like, have a a pretty ingrained perspective of what we feel like a company is doing. And we tend to sort of categorically say, you know, okay, they're an EV company, they're good, or they're a legacy automaker, they're bad. But when it comes to the EV company, while the electrification of the vehicle aspect may be really incredible, there may be other data about the way they treat their workers or the supplies they use, that may be contributing to a lower score. So we actually get that a lot with some of the larger brands where we hear, hear our members saying, Hey, I, I thought this company was horrible. And we say essentially something to the effect of, for every brand, every company, there's almost always areas for improvement, and some are worse than others, but they're also doing some good things. And here's what you should look at on that front.

Tom Raftery: 29:41

Nice. Nice. We're coming towards the end of the podcast now, Kadar. Is there any question I did not ask that you wish I had or any aspect of this we haven't touched on that you think it's important for people to be aware of?

Kedar Karkare: 29:57

You know, I think we, we covered a lot of what we do in a short amount of time. I would say the piece that we haven't talked about is sort of what is the cost associated with being a Karma Wallet member. We are from the debit card and membership perspective, it, you know, we charge a monthly fee. So currently it'll be$3 and 65 cents a month. So the inherent meaning behind that is that we should do our best to support a better world. 365 days a year comes out to 1 cent a day. So we feel like that's not, not too crazy. And, and then if you pay annually, it's $40 a year. When you refer a friend, you earn $30. And we find that our members are typically projected to earn at least three times the annual fee when it comes to the cashback they can earn.

Tom Raftery: 30:54

Great. And Kedar, what is the business model for Karma Wallet?

Kedar Karkare: 30:59

Yeah. So, you know, we talked about the two components of the business. The one that is really a, a financial company for consumers, and then the integrations with existing financial institutions. The integrations with existing institutions, it's, you know, an annual fee and then they pay us per member that opts into seeing our data. And then on the consumer side, we charge a monthly membership fee. You can pay annually and get a discount. We don't charge any other sort of fees that or, or really anything on your money. We just think that, we want to build a community of people that are passionate about this and we feel like a few bucks a month to join that community is reasonable. so we are basically membership fee driven.

Tom Raftery: 31:46

Okay, and Karma Wallet is, is it B Corp, no?

Kedar Karkare: 31:49

Karam Wallet is a B Corp. We're also a public benefit corporation, so not only do we report on a bunch of companies, we do our absolute best to be entirely transparent with everything we do. We donate 5% of our revenue to nonprofits every year. And we also are building sort of an automated donation feature. If you wanna round up your purchases or you want to allocate a certain amount of money each month for donations, we will surface the best nonprofits that align with your values. So you can do that.

Tom Raftery: 32:20

Okay. Nice, nice. Great. if people would like to know more about yourself or any of the things we discussed on the podcast today, where would you have me direct them?

Kedar Karkare: 32:32

Ooh, about myself, I'm not sure. You know, the things we discussed on the podcast. Karma wallet.io is our website. You can find all of the company ratings as well as the wait list signup for the the debit card product. If you wanna know more about me or the company, you know, we've had some recent, awards, if you will. We were named to the Best in Business list by Inc. Magazine, late last year. Won a couple of other sort of innovation and, and sustainability awards. So I'm sure if you Google Karma Wallet, some of those will show up in the news section. But yeah, I think primarily like if you do nothing else after listening to this podcast, go to karma wallet.io, click on the browse button and just take a look at some of the companies that you buy from or some of the companies that you're interested in. See what our data says. Reach out if you're interested in why it's that way or why it might be different than your perspective because we're always looking to learn from people that are passionate about this.

Tom Raftery: 33:35

Cool. Cool. Fantastic. Kedar, that's been really interesting. Thanks a million for coming on the podcast today.

Kedar Karkare: 33:40

Thanks for having me!

Tom Raftery: 33:42

Okay, we've come to the end of the show. Thanks everyone for listening. If you'd like to know more about the Climate Confident podcast, feel free to drop me an email to tomraftery at outlook. com or message me on LinkedIn or Twitter. If you like the show, please don't forget to click follow on it in your podcast application of choice to get new episodes as soon as they're published. Also, please don't forget to rate and review the podcast. It really does help new people to find the show. Thanks. Catch you all next time.