Over the past year, the meteoric rise of NFTs and the metaverse has paved the way for new talent, new perspectives, and new creativity. But the argument about the sustainability of the virtual dimension is – and perhaps – lives on.
But with great success comes great responsibility and a high price. According to Digiconomist, the power needed to a single Ethereum transaction exceeds what an average US household uses in over a week. The buzz around the metaverse’s technological possibilities is fading; now all eyes are on how responsibly web3 can be navigated.
Luxury brands have the power to drive change in this growing field. But fashion’s track record of sustainability paints an uncertain picture. Greenwashing is already prolific in the mainstream fashion industry, but similar tactics are already being adopted in the virtual space. Simon Waterhouse, CEO of sustainability strategy partner Eco-Age and founder of EBIT, describes the concept as “Metawashing”: a process where a brand “spends more time and money bringing its virtual products, metaverse ideas to market and its NFTs as sustainable rather than minimizing its impact on sustainability.
Are we witnessing Greenwashing 2.0? Or can brands ditch deceptive marketing gimmicks in favor of innovative digital efforts? Here, Daily Jing explores which businesses are leading the way to an eco-friendly future and which ones are failing in the the metaverse market should reach a value of $122.3 billion.
The efforts of luxury show that there is still a lot to do
Luxury doesn’t have the best of reputations when it comes to environmental impact. But now the odd name is using the metaverse as an opportunity to rectify its actions. For example, earlier this year, French beauty house Guerlain released an NFT collection of 1,828 “cryptobees” in an effort to fund biodiversity conservation. Proceeds from token sales have supported a reseeding project in France’s Vallée de la Millière nature reserve. Guerlain also used XTZ, the Tezos blockchain cryptocurrency that claims to use less power than most.
Meanwhile, Balmain’s collaboration with Barbie was powered by the Flow blockchain, a company providing eco-friendly transactions using an alternative, less energy-consuming method to secure NFTs. Balmain and Mattel’s NFTs generated less than 1 KWh per NFT, as opposed to the 340 KWh that a single NFT can often consume — enough to power a 3 hour flight from London to Rome. Considering the number of NFT launches we see each week, the resulting positive impacts are just a drop in the ocean and leave plenty of room for further change.
Greenwashing tactics are invading the virtual landscape
While some use the virtual landscape to showcase their conservation efforts, others rely on smoke and mirrors.
Sportswear giant Adidas has long been vocal about its environmental commitments. The company Goals to achieve a “40% reduction in water intensity by 2025” and become fully carbon neutral in the long term. But these ambitious statements don’t quite match the brand’s Web3 roadmap. For previous token-related projects, Adidas has partnered with Bored Ape Yacht Club and GMoney – NFT collectives that are not particularly vocal about their sustainability goals. The brand also sold 30,000 NFTs as part of its “Into the Metaverse” Ethereum blockchain initiative; an extremely energy-intensive drop, above-mentioned data taken into account.
Similarly, Prada’s sustainability strategy states that the brand strives to mitigate its impact on climate change by preserving ecosystems and embracing circular thinking. The Italian brand’s ongoing Timecapsule NFT project champions circular fashion by pairing tokens with IRL pieces made from upcycled fabrics from the Prada archives. Prada touts the initiative as a way to breathe new life into excess materials, but it’s less clear how much energy the drops emit each month — especially since they’re also sold using ETH currency — and what the brand is doing to offset its impact.
It’s worth noting the countless brands moving in and out of the metaverse without a solid digital roadmap. How much environmental damage do these sporadic drops cause? And how do brands plan to offset their virtual carbon footprint without a clear strategy? It makes sense to test the waters before plunging headlong into the digital space, but diligent actors need to recognize the green byproduct of their campaigns from the start.
Whether or not a brand takes the necessary steps to deliver on its environmental promises often comes down to the blockchain or cryptocurrency system on which it chooses to sell its virtual assets.
To date, the preferred option for owning Web3 digital assets is Ethereum, where most tokens are bought and sold using the ETH currency. But the aforementioned Digiconomist data points to significant consequences of Ethereum’s popularity.
Research shows that there are more eco-friendly options: eco-friendly blockchains like Flow and Chia are designed to consume less energy than Bitcoin and Ethereum. But one of the main problems with smaller blockchains is that investors are cautious about investing their money in fraudulent programs. Stronger security protocols give larger blockchain systems like Ethereum undeniable reliability.
Recognize the climate footprint effect in Web3
For brands looking to take their climate footprint seriously, entering the Web3 landscape at this stage may not be viable. Adam Knight, co-founder of Tong Global, thinks that in its current form, there’s very little to suggest the metaverse is anywhere near being sustainable. “On the face of it, metaverse commerce — primarily the trading of digital items and NFTs through blockchain-based processes and cryptocurrencies — is much more energy-intensive than real-world shopping,” Knight said. “Many companies may try to hide behind the hype, claiming real responsibility for solving these very complex problems. But consumers quickly get the hang of it, and the resulting pushback can be difficult.
The metaverse is still in its infancy, but it’s all the more important for brands to lay a lasting foundation now. Considering the environmental impact of metaverse initiatives should come first, says Carl Navarro, founder of The Good Society, a collective harnessing the power of NFTs to fund global initiatives. Educating teams on how to tell a real project from a fake should also be a priority.
“This is above all the most important aspect when developing businesses and projects in the Web3 space. Once you have that authentic intent, the mission statement and brand ethos can encompass a community that naturally appeals to consumers,” Navarro explained. “It is right that we look to new technologies to create radical change in society, but blind technological solutionism – an absolute belief that technology can provide all the answers – is naïve.”
The rose-tinted glasses in the metaverse are starting to slip, and it’s time for brands to act before it’s too late to undo the consequences. After all, as exciting as the prospect of a new world may be, we simply cannot afford to forget the one we live in right now.