Zumo partners with CCRI to address crypto carbon footprint

CCRI is a body focused on providing data regarding the carbon exposure of investments and business activities in the blockchain sector.

It boasts an interdisciplinary team with a track record of multi-year research, particularly concentrating on cryptocurrencies and their environmental impact. Utilizing current data sources and methodologies grounded in peer-reviewed studies from reputable scientific journals, CCRI aims to offer accurate insights into carbon exposure.

Under this partnership, CCRI will furnish Zumo with data and methodologies to facilitate the development of its Oxygen solution. Oxygen, utilizing blockchain technology and strategically-sourced market instruments like renewable energy certificates (RECs), aims to enable financial institutions to gauge, mitigate, and report on the carbon footprint of their digital asset operations.

In the past year, Zumo collaborated with Jacobi Asset Management to introduce Europe’s inaugural ESG-aligned Bitcoin spot ETF, listed on Euronext Amsterdam. This partnership intends to aid more financial institutions in addressing the carbon footprint associated with the growing number of Bitcoin ETFs and other financial instruments entering the global market.

Research conducted by Zumo and CCRI disclosed that as of March 2024, the annualized carbon footprint of all physically backed Bitcoin fund products totalled 4487.93 kilo-tonnes of carbon dioxide (ktCO2), equivalent to over 1.5 million round trips between London and New York.

Moreover, the annualized carbon footprint of the US ETF cohort, which commenced operations in January 2024 subsequent to approval by the SEC, amounted to 2056.86 ktCO2. This cohort, capturing nearly half (45.8%) of the market share for physically backed Bitcoin funds within a short span, underscores the rapid growth of carbon footprint in this sector.

Representatives of Zumo emphasized the increasing responsibility of providers in addressing ESG considerations as their share of crypto holdings expands. They expressed pride in partnering with CCRI, recognized for its sustainability data integrity, to help integrate sustainability into digital asset propositions, aligning with investors' heightened ESG awareness and evolving regulatory frameworks such as the EU’s Corporate Sustainability Reporting Directive (CSRD).

CCRI representatives stressed the significance of transparency and data in managing environmental impacts associated with financial products. They highlighted the prevailing gap in measuring and reporting on the carbon footprint of crypto activities within most funds. Dr. Stoll welcomed Zumo's utilization of CCRI's dataset and capabilities to offer a comprehensive solution for financial institutions to comprehend and mitigate their crypto-related carbon exposure.