Sabine's Writing

Critical Reflection on ethics of using NFTs in the social impact space

Note: This has not been peer reviewed

Title: A Critical Reflection on How an Interdisciplinary Approach Can be Used in the Exploration Around the Ethics of Using NFTs to Fund Social Impact Projects

NFTs’1 popularity has risen exponentially over the last year (Murphy & Oliver, 2021). Social impact projects and charities are increasingly using them for funding because of the amount of money available in the space. NFTs are an attractive charitable funding tool: Smart contracts to track donations, donor tax benefits, no third-party intermediaries, and new donors enticed by the current ‘cool factor’ (Avdoshin & Pesotskaya, 2020; The Giving Block, 2021). However, NFTs have various ethical issues, especially concerning their carbon footprint. Some recent NFT releases, especially for social impact funding, have been criticised for the hypocrisy of their actions2 (UNICEF, 2021; WWF UK, 2022; Calma J. , 2022). The benefits of funding projects with NFTs make it worth exploring ways to balance out their negatives. An interdisciplinary exploration is ideal as it considers a variety of lenses - which this piece will show is required. This brief discussion will cover technical, philosophical, linguistic, and psychology lenses.

Carbon emissions related to the crypto space are steadily increasing. Ethereum, the main blockchain for NFTs, currently uses the proof-of-work system to validate transactions, which is extremely energy-hungry. Ethereum and Switzerland have a similar annual carbon footprint (Calma J. , 2021; Ethereum, 2022). The creation, sale, and transfer of one NFT can result in a carbon footprint equivalent to two months of an average person's electricity usage (Calma J. , 2021). Carbon offsetting has become a popular solution, where one can pay to have one’s carbon output counteracted (Ghussain, 2020). However, carbon offsets do not necessarily ethically and efficiently ‘cancel out’ the linked carbon emissions to make the difference people hope this solution will (Ghussain, 2020; Kahn, 2021; Watt, 2021). An interdisciplinary technical overview of the concerns around NFTs’ environmental impact could include data analysis of different blockchains' energy usage and visualisation of the effect of the subsequent carbon footprint. Better knowledge of the issue can lead to better solutions.

Environmentally-friendly technical solutions are advancing. Many artists and platforms are branching out to the concept of carbon offsetting. Though as discussed, it is not a perfect solution (Watt, 2021). NFT platforms operating on alternative, more environmentally-friendly blockchains are becoming popular (Wintermeyer, 2021; Calma J. , 2021). However, many alternative cryptocurrencies still require transactions through Bitcoin or Ethereum, which has caught some platforms out3 (Calma J. , 2022; Farand, 2022). Other modest ways to reduce the impact of NFTs are using lazy minting, layer-2 scaling optimisation, and sidechains (Bruner, 2021; Calma J. , 2021). Focusing on innovations to reduce rather than offset emissions from NFTs is vital for its sustainability. An interdisciplinary exploration into solutions using multidisciplinary discussions would balance technical, environmental, and ethical approaches.

While the technical solutions offered may help, they run the risk of veering into the land of greenwashing. Greenwashing is a technique often used by organisations today to falsely present themselves as being more eco-friendly than they truthfully are - a technique likely used in the NFT space (Mitchell & Ramey, 2011). The language used around so-called eco-friendly NFTs appears misleading, and data analysis of these words would be an interesting interdisciplinary strategy to dig deeper into the greenwashing of NFTs. The ‘competitive altruism theory’, used in greenwashing discussions, suggests people make purchases to be perceived as altruistic and elevate their status (Mitchell & Ramey, 2011). Which, in this case, would comprise buying a ‘sustainable’ or charitable NFT on a public forum for everyone to see your 'altruistic' purchases (Mitchell & Ramey, 2011; Kahn, 2021). Greenwashing takes the onus off organisations to make real, sustainable change, as their customers will still buy into the idea of being more eco-friendly. With behavioural understanding, linguistic studies and marketing psychology, an interdisciplinary approach can be used to investigate the consequences of greenwashing NFTs.

So given these negatives of NFTs - mainly the tangible environmental impact and the likely greenwashing - is it ethical for social impact projects to use NFTs for funding? Do the ‘greater good’4 results of receiving more money to fund social-good projects outweigh the environmental impact in the long term? As posed by Broadhead and Placani (2021), [is it] "sometimes morally permissible to do harm if that harm is offset by doing good". The backlash received by WWF-UK and UNICEF5 Giga NFT drops indicates many people disagree with this logic (Calma J. , 2022; UNICEF, 2021). However, it is a discussion not to ignore. Crypto and NFTs are here to stay – either one joins in and takes advantage of the increased income stream, or one gets left behind.

Many more lenses and perspectives would aid this exploration, especially as this issue spans the intersection of technology, ethics, the environment and finance. However, within the brief scope of this piece, the discussion above includes some introductory examples of how an interdisciplinary approach can be used to address and explore the issue around the ethics of using NFTs to fund social-good projects.


  1. Non-Fungible Tokens
  2. Backlash shown in replies to the tweet released by UNICEF (UNICEF, 2021)
  3. WWF tried to use Polygon, which claimed to eb more eco-friendly, but reportedly required transactions through Bitcoin still (Farand, 2022)
  4. An ethical theory which requires its own unpacking beyond the scope of this piece, as the ‘good’ is subjective
  5. Backlash shown in replies to the tweet released by UNICEF (UNICEF, 2021)


Avdoshin, S., & Pesotskaya, E. (2020). Blockchain in charity: Platform for tracking donations. Proceedings of the Future Technologies Conference (FTC) 2020, 2, 689-701.

Mitchell, L. D., & Ramey, W. D. (2011). Look How Green I Am! An Individual-Level Explanation for Greenwashing. Journal of Applied Business and Economics, 12(6), 40- 45.

Murphy, H., & Oliver, J. (2021, December 31). How NFTs became a $40bn market in 2021. Retrieved from Financial Times: abd4-8a99faa7737d

The Giving Block. (2021). NFTs & Charity: How Can You Use NFTs to Donate Cryptocurrency to Charity? Retrieved from The Giving Block: cryptocurrency-to-charity/

Wintermeyer, L. (2021, March 19). Climate-Positive Crypto Art: The Next Big Thing Or NFT Overreach? Retrieved from Forbes: crypto-art-the-next-big-thing-or-nft-overreach/?sh=11e2c03fb0e6

Calma, J. (2022, February 8). How the World Wildlife Fund tried — and failed — to create an eco-friendly NFT. Retrieved from The Verge: layer-2-blockchain-energy-emissions

WWF UK. (2022, February 4). NFT statement. Retrieved from WWF:

UNICEF. (2021, December 10). UNICEF tweet on NFT collection for Giga . Retrieved from Twitter:

Ethereum. (2022, February 18). Ethereum energy consumption. Retrieved from Ethereum:

Calma, J. (2021, March 15). THE CLIMATE CONTROVERSY SWIRLING AROUND NFTS. Retrieved from The Verge: cryptoart-ethereum-blockchain-climate-change

Ghussain, A. (2020, May 26). The biggest problem with carbon offsetting is that it doesn’t really work. Retrieved from Greenpeace: biggest-problem-with-carbon-offsetting-is-that-it-doesnt-really-work/

Kahn, B. (2021, March 25). Carbon Offsets for NFTs Don't Address the Deeper Problem. Retrieved from Gizmodo: address-the-deeper-problem-1846520183

Bruner, R. (2021, November 18). Environmental Concerns Have Cast Doubt on NFTs—But That’s Changing. Retrieved from Time: environmental-impact/

Farand, C. (2022, February 2). WWF-UK faces backlash over plan to sell NFTs to fund conservation work. Retrieved from Climate Home News: nfts-fund-conservation-work/

Broadhead, S., & Placani, A. (2021). The Morality of Carbon Offsets for Luxury Emissions. World Futures, 77(6), 405-417. DOI: 10.1080/02604027.2021.1969876

Watt, R. (2021). The fantasy of carbon offsetting. Environmental Politics, 30(7), 1069-1088. DOI: 10.1080/09644016.2021.1877063