Payments network Ripple announced a move today that will make its climate change activist users happy. The company has pledged to be carbon net-zero by 2030 and to decarbonize public blockchains.
“The blockchain and digital asset industry will play a critical role in building a sustainable future for global finance,” the company said in a blog post. “We, as an industry, need to come together to dramatically reduce our collective environmental impact as broad adoption takes hold.”
Ripple plans to decarbonize public blockchains in partnership with the XRP Ledger Foundation, Energy Web, and Rocky Mountain Institute. To achieve this goal, the group is using Energy Web’s EW Zero, an application to find and source emissions-free renewable energy. EW Zero provides an open-source tool that enables any blockchain, not just Ripple’s XRP Ledger, to decarbonize by purchasing renewable energy in local markets in partnership with Energy Web Foundation.
In addition to this, Ripple announced it is:
- Measuring its own carbon footprint and reducing it by purchasing clean, renewable energy for its offices and business activities
- Investing in carbon removal technology with the goal of removing all of its emissions by 2030
- Driving new research with the University College London (UCL) and the National University of Singapore to evaluate energy consumption across digital assets, credit card networks, and cash; and understand environmental impact of crypto adoption
Cryptocurrencies don’t have the same negative environmental impacts as paper currencies, which contribute to pollution, deforestation, and a large carbon footprint. The mining techniques that cryptocurrencies require, however, consume large amounts of energy. This is especially true with Bitcoin. Ripple reported that XRP is 61,000x more energy efficient than Bitcoin, which last year consumed almost as much energy as the country of Portugal does on average.
Ripple is the first major player in the crypto space to make a move like this but it likely won’t be the last. According to a report by Morningstar, over the past three years Environmental, Social and Governance (ESG) index funds have doubled in both number and asset size. Ripple’s new environmentally friendly approach will likely piggyback on the success of ESG investing.
Photo by Sarah Dorweiler on Unsplash