- Following the U.S. Securities and Exchange Commission’s (SEC) approval for BTC exchange-traded funds (ETFs), the number of crypto fund products with significant carbon footprint has grown exponentially.
- In March 2024, the annualised carbon footprint of all physically backed BTC fund products stood at 4487.93 kilotonnes of carbon dioxide (ktCO2) – equivalent to a person flying from London to New York and back over 1.5 million times. This is set to grow further with the London Stock Exchange (LSE) and the Hong Kong Securities and Futures Commission (SFC) now also accepting crypto fund products.
- In response, Zumo and CCRI have announced a new partnership to help financial institutions to better measure, mitigate, and report on the carbon footprint of their digital asset activities.
Edinburgh & London, Wednesday 24 April 2024 – Zumo, the B2B digital assets infrastructure prioritising compliance and sustainability, today announces a new strategic partnership with Crypto Carbon Ratings Institute (CCRI), which provides data on the carbon exposure of investments and business activities related to blockchain.
CCRI’s interdisciplinary team has built a multi-year research track record with a specific focus on cryptocurrencies and their environmental impact. The organisation uses the latest data sources as well as methods based on peer-reviewed studies published in leading scientific journals.
CCRI will now provide the data and methodologies to enable Zumo to further develop its Oxygen solution. The first of its kind, Oxygen uses blockchain technology and strategically sourced market instruments, including renewable energy certificates (RECs), to enable financial institutions to measure, mitigate, and report on the carbon footprint of their digital asset activities.
Last year, Zumo helped Jacobi Asset Management to deliver Europe’s first ESG-aligned BTC spot ETF, listed on Euronext Amsterdam. Zumo will now work in partnership with CCRI to help more financial institutions address the carbon footprint of the new wave of BTC ETFs and other financial instruments coming to the global market.
Research from Zumo and CCRI highlighted that as of March 2024, the annualised carbon footprint of all physically backed BTC fund products stood at 4487.93 kilotonnes of carbon dioxide (ktCO2)*. To put this into context, this is equivalent to a person flying from London to New York and back over 1.5 million times.
Furthermore, the annualised carbon footprint of the US ETF cohort that went live in January 2024 following approval by the SEC was 2056.86 ktCO2*, meaning this new cohort had captured nearly half (45.8%) of the market share – and correspondingly the carbon footprint – for physically backed BTC funds within just a couple of months.
Nick Jones, Founder and CEO, Zumo said:
“As providers’ share of crypto holdings increases, so must their responsibility when it comes to ESG considerations. We’re proud to be partnering with CCRI, which is recognised as the gold standard for sustainability data in our sector. Together, we can help responsible financial institutions to embed sustainability at the heart of their digital asset propositions, in line with investors’ growing ESG awareness and new regulations, such as the EU’s Corporate Sustainability Reporting Directive (CSRD), which requires companies to report Scope 3 emissions.”
Dr. Christian Stoll, Co-Founder, CCRI added:
“Transparency and data is key to measure and manage environmental impacts linked to financial products. Unfortunately, most funds are still not measuring or reporting on the carbon footprint of their crypto activities. We are happy that Zumo builds on our dataset and leverages our complementary capabilities to provide an end-to-end solution to help financial institutions to understand and mitigate their crypto-related carbon exposure.”
About Zumo
Zumo believes everyone should have access to sustainable finance, and that blockchain has the power to deliver this globally. Its mission is to provide a better planet for digital assets, delivering sustainable, accessible and secure ways to unlock the benefits of web3.
As an enterprise-focused digital-asset-as-a-service platform, Zumo’s turnkey, API-based infrastructure offers a fast, flexible and compliance-sensitive route to market, empowering fintechs, banks, asset managers and brands to offer their clients the tools of the future simply, securely and sustainably while also opening up new revenue streams, attracting new customers and supporting customer retention.
A values-driven business, Zumo has underlined its commitment to a fairer society and a sustainable planet with an ambitious 2030 net zero strategy encompassing its own business; the blockchains it works with; and the wider digital asset ecosystem. Carbon-neutral since inception, the business is committed to ongoing collaboration in the decarbonisation of the digital assets industry. Zumo was an early signatory of the Crypto Climate Accord, the first digital asset business to receive U.K. government funding from the U.K.’s national innovation agency, Innovate UK, to further its applied work on the decarbonisation of digital assets, and is now a key contributor to industry guidance on the energy consumption of blockchain, working in tandem with the World Economic Forum and the OECD.
Zumo’s infrastructure also powers the direct-to-consumer Zumo App, launched in the U.K. and registered with the Financial Conduct Authority (FCA).
Zumo | Your digital-assets-as-a-service platform
About CCRI
Crypto Carbon Ratings Institute (CCRI) is a research-driven company providing data on sustainability aspects of cryptocurrencies, blockchain and other technologies.
The interdisciplinary team has built a multi-year research track record with a specific focus on cryptocurrencies and their sustainability impacts. CCRI uses the most up-to-date data sources as well as methods based on formerly peer-reviewed studies published in renowned scientific journals. CCRI provides insights that help their clients to understand and manage crypto-related environmental exposure.
CCRI – Crypto Carbon Ratings Institute (carbon-ratings.com)
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