Spending guilt is usually associated with forking over too much money on something you can’t afford. Still, it can also be triggered by purchasing items from companies that don’t align with your values. This has become an increasingly big issue as consumers learn more about how certain products are made or how certain companies operate.
The Conscious Consumer Spending Index was released last year by consultancy Good.Must.Grow found that socially responsible spending hit an all-time high in 2021. The index tracks consumers’ importance on purchasing from socially responsible companies, actions they take to support products and services, and future intent to increase their spending.
The increased focus on responsible spending has opened up a market for tools to give consumers better purchase data. One of those tools is Karma Wallet, a digital platform that aims to help users identify brands with responsible business practices, analyze the carbon footprint of their spending, and offset that footprint through partner organizations.
ImpactKarma launched Karma Wallet, a Raleigh, North Carolina-based startup co-founded in 2019 by Jayant Khadilkar and Kedar Karkare. Khadilkar serves as ImpactKarma’s CEO. Karkar, a Senior Intelligence Analyst at CB Insights, came up with the idea for Karma Wallet when he kept getting asked the question, “How can you be a conscious consumer when you can’t measure or verify your choices?”
Karker and his father, Jayant, created Karma Wallet as a data-driven platform that evaluates companies for impact so consumers “can shop with knowledge and intention,” according to the Karma Wallet website.
As Sustainable Brands noted in a recent article, Karma Wallet is banking on the marriage of behavior change, fintech, and systems change to create a “critical mass of consumers” who can turn intent into action and pressure corporations to make changes that benefit the world.
“There is a big gap between intention and action,” Khadilkar told Sustainable Brands in an interview.
“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.”
Karma Wallet’s premise is simple. If a company meets a sustainability and social responsibility target threshold, Karma Wallet will note that the company is making a positive impact. The idea is to push consumers toward more responsible brands, which might push companies to improve their business practices.
“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 said. “We are creating a movement that will put pressure on the corporations.”
ImpactKarma’s focus is on bolstering its brand and expanding its user base. The company will provide cashback rewards and discounts for shopping sustainable businesses. The goal is to incentivize customers to change their spending habits. Eventually, the company will show customers alternatives to brands with low ratings.
If a company scores high on Karma Wallet, users can select its cashback reward, shop for items, and then have cash automatically deposited into their Karma Wallet accounts. From there, the money can be pocketed or applied toward sustainability projects.
ImpactKarma’s sustainability program includes membership in 1% for the Planet, a global organization in which members commit to donating the equivalent of 1% of gross sales to environmental partners through a combination of monetary, in-kind, and approved promotional support.
ImpactKarma has also pledged to plant a tree for every account with at least one linked credit card. So far, it has planted about 950 trees.