Taking sustainability into account in fintech and crypto is more important than ever. With the spread of cryptocurrency – with more financial institutions, companies like PayPal, Visa and Tesla, and individual investors looking to use this technology – energy consumption has accelerated to an already unsustainable level.
The industry has a choice: will we continue on an unsustainable path or can we work together and reduce our collective environmental impact? Last year we partnered with Energy Web (EW) and the Rocky Mountain Institute (RMI) to decarbonize public blockchains – starting with the XRP Ledger, the first major global blockchain to do so. As a company, Ripple also promised to hit net carbon zero by 2030 or earlier.
Today we are excited to announce the next step in Ripple’s sustainability journey: our commitment to the Crypto Climate Accord (CCA) – a new initiative organized by EW, RMI and the Alliance for Innovation Regulation (AIR) to help the cryptocurrency industry to make 100% renewable.
Ripple works with over 20 backers from various industries and blockchains including the United Nations, CoinShares, Compass Mining, the XRP Ledger Foundation and ConsenSys to ensure that the crypto industry comes together to develop solutions that are sustainable, scalable and value-adding for all improve.
Secure a sustainable future together
The market cap for crypto is now nearly $ 2 trillion – double what it was three months ago – underscoring how fast this industry is growing.
However, this comes at a cost. Globally, the damage caused by climate change will amount to almost 3% of GDP by 2060. This is the core of the future challenge: How can both protect the environment? and do global finances flourish without negatively affecting each other?
It starts with companies from across the financial spectrum coming together to address and prioritize emissions reduction and renewable energy use. In an industry known for innovation and rapid change, these should be solvable challenges. With the CCA, the crypto and blockchain community has taken a big step in the right direction.
Inspired by the Paris Climate Agreement, leaders in the fintech and crypto industries have teamed up to launch the Crypto Climate Accord, a private sector initiative focused on decarbonizing cryptocurrencies to ensure that the global financial system is less harmful and more sustainable.
The main objectives of the agreement include:
- Enable all blockchains in the world to run 100% on renewable energies by the UNFCCC COP conference in 2025
- Development of an open source accounting standard for measuring emissions from the cryptocurrency industry
- Achieve net zero emissions for the entire crypto industry, including all non-blockchain operations and retrospective emissions by 2040
Ripple’s journey to carbon neutrality
The Crypto Climate Accord recognizes that financial technologies – including blockchain and cryptocurrency – are well positioned to drive global finance’s commitment to a sustainable future. Recent studies suggest that now through 2023 will be the most critical years of adoption growth for crypto, and we know that a systemic trait like sustainability will be harder to reverse engineer the longer we wait. The time to resolve that problem is now.
Ripple is committed to leading that effort, and our strategic partnership with organizations like the Rocky Mountain Institute, Energy Web, and AIR is a critical component in achieving sustainability. This will ensure that key industry players come together to contribute ideas, technical innovations, policy ideas and innovation funding to help achieve the long-term goals of the agreement.
Across industries, adopting sustainable policies like this can save the global economy an estimated $ 26 trillion by 2030. With the increasing importance of fintech, the opportunity for the industry to lead global finances into a climate-neutral future increases.
Together we can create a more resilient and sustainable global financial system and a healthier, more sustainable world. For more information on Ripple’s commitment to sustainability, see Ripple Impact.