The main backlash point for individuals and companies jumping on the NFT train? The environmental implications. 

Now, don’t misunderstand me, not for a second am I saying that if a company is looking into NFTs that sustainability should only be of interest in protecting their butts from sustainable consumers – not at all. Interest in sustainability is more productive and more likely to succeed if it stems from authentic interest in wanting to protect the environment. 

Let’s look at Salesforce as an example. It drew the ire of more than 400 employees after it announced last month that it was developing an NFT cloud service. The announcement came just a few weeks after the company aired a sustainability-focused Super Bowl commercial, prompting employees to sign an open letter denouncing the cloud service over environmental and economic concerns. The fallout has raised the question of whether it’s possible to balance sustainability efforts with the production of an NFT, which can use enough computing energy to emit as much carbon as a car that drives 500 miles.

“[Sustainability] is not just important, it’s a requirement, and if you were to ask the biggest brands in the world why they haven’t done NFTs, it’s because of their hesitation [around] energy efficiency,” said Mark Soares, chief marketing officer of Blokhaus, a marketing agency that works with the blockchain Tezos.

Although Salesforce hasn’t said whether it will move forward with plans for the cloud service, other organisations, including the U.K. arm of the World Wildlife Fund (WWF) and gaming brands Team17 and GSC Game World, cancelled their respective NFT projects after similar criticisms. 

What these responses show is that when executed without sustainability in mind, NFT collections can backfire on brands, regressing their presence in the metaverse. 

When considering how to make NFTs eco-friendly, brands must do so alongside their pre-existing stance on sustainability—especially as an energy-intensive drop could appear hypocritical.

So, the main question is what eco-friendly alternatives are there?
Tezos is one of the eco-friendlier blockchains being used to create NFTs, as opposed to Ethereum, which is currently the most popular chain for the market with around 80% of total share. While Ethereum currently uses an energy-intensive protocol called proof-of-work (PoW), other chains like Tezos, Solana and Cardano use a less intensive protocol called proof-of-stake (PoS). But PoS networks don’t have as much experience as PoW networks, and are therefore not yet as trusted.(Ethereum plans to transition to PoS this summer, but until then will still be using PoW.)

Moreover, heavyweight NFT marketplaces like OpenSea, Rarible and SuperRare do not currently support many of these PoS chains; and while OpenSea does support a network called Polygon that claims to be less energy-intensive, Polygon’s inherent dependence on Ethereum has cast doubts on the extent of this lesser intensity.

Brands that wish to use eco-friendlier blockchains therefore have had to turn to different NFT marketplaces. For example, Kia, which created its “Robo Dog” NFT collection on Tezos, used the Sweet platform, which supports the Tezos blockchain. 

Nevertheless, when brands do want to choose a more eco-friendly option, the con is that the user base is smaller and therefore likelihood of sales decreases. The answer to this is that big brands should lead the way. Starbucks and Coca Cola will make NFT sales regardless and the power of their influence in choosing a more eco-friendly platform would attract more users in a perfect world.
Alas we do not live in a perfect world and therefore as an independent artist, one should weigh up the pros and cons. If creating an NFT collection will reduce your carbon footprint (no fast fashion in printing t-shirts with merch printed or no gas released via touring with a bus and instead selling metaverse performances) then choosing the more sale-heavy option might still keep the environmental scales tipping in an eco-friendly favour in comparison to having not created a digital experience. This choice is independent and deeply personal. 

Education should come first irrespective of brand preference. Education is needed in every facet of NFTs, but sustainability in particular is especially challenging to navigate.  Most consumers are six to 12 months behind the education cycle, said Horowitz, which could help to explain why the relatively recent emergence of eco-friendlier platforms and carbon offsetting services has not done much to sway public opinion about NFTs in general.

To expedite the catch-up process, brands should seek to educate consumers with additional assets as they would with any other product launch, said Blokhaus’ Soares. For example, soccer club Manchester United announced a sponsorship deal last month with the Tezos blockchain, and released a series of videos developed with Blokhaus to explain the network to consumers. In one of the clips, on-screen text explains that one NFT minted on Tezos consumes just the same amount of energy needed to send a tweet.

Ultimately, brands need to circumvent the complexity of many of the concepts underlying blockchain technology, which may prove to be especially important in the coming months as Ethereum transitions to a PoS network, requiring yet more education. 

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