Turning a new leaf
05 Mar 2025
Clelia Frondaroli speaks to Kirsteen Harrison, sustainability director at Zumo, about the state of ESG within the crypto industry and the steps taken to decarbonise the sector
Image: image by kannapat/stock.adobe.com
It is not easy being green, something Kirsteen Harrison as Zumo’s sustainability director knows all too well.
“Just a few years ago, sustainability within the crypto space was quite an evolving field. Since then, I think it’s moved on massively, and there’s a lot more going on in the ecosystem now,” she says, reflecting on the changes that have taken place over the course of her career.
One of these changes — the Markets in Crypto-Assets Regulation (MiCA) — intended to harmonise legislation for crypto-assets across the EU, which at the time of MiCA’s implementation did not have a place within existing financial services regulation. A key aspect of MiCA has been its introduction of sustainability disclosure requirements, where crypto-asset service providers (CASPs) must disclose information surrounding adverse environmental impacts, including energy consumption, carbon emissions, and the use of renewable energy for crypto assets.
“By requiring sustainability disclosures, MiCA provides that level playing field where everybody’s got to talk about what they’re doing,” affirms Harrison. “It certainly makes everybody sit up and take notice.”
It is not just firms that have taken notice. Stefano Chierici, senior product manager, financial information at SIX, believes that the MiCA mandates have been a long time coming. With the industry clamouring for change and better regulation, he is confident MiCA’s adoption “is sure to bring enhanced transparency to markets and a new level of investor protection.”
However, whether Harrison believes the mandates have been the push the industry needs to place sustainability at the forefront of their operations, she still holds her reservations. “Although it’s great to see sector-specific sustainability disclosures coming in,” she muses, “there has been no precedent for doing that, and it remains to be seen if this will have positive outcomes. Hopefully it incentivises change within the sector.”
Moving in the right direction
And yet, change has come. Innovations and new mechanisms have signalled the start of a positive, and perhaps a still little tentative, shift in the ways in which crypto sources its energy.
As Harrison outlines: “We’ve seen a lot of evolution in the sector and a maturation of the market. For example, there’s been a lot of innovation in terms of how Bitcoin mining is powered, and how it can be used to balance grids.”
The rise of these ventures, such as methane clearing and grid balancing (where, in times of high and low energy demand, mining operations can use the extra energy generated by power providers that might otherwise have been ‘grounded’ and gone to waste), are only some of the efforts the industry has implemented to decarbonise crypto mining.
Renewables, such as solar and hydroelectric power, have also played a major role in mitigating energy consumption, an area that Harrison believes crypto has an advantage over other sectors.
“Technologically, we know how to move to renewable electricity relatively easily. Compare this to other sectors, such as aviation, which are much more difficult to decarbonise.”
Yet, being at the forefront of change has not come without added scrutiny and pressure.
Although crypto has the ability to evolve faster than many other sectors, Harrison is aware of how this might reflect on the sector, where “perhaps that also places a greater responsibility on us.”
The nature of crypto consumption is also not all it seems. Although Bitcoin tends to dominate the debate surrounding the energy-intensive nature of crypto mining and rightly so, seeing as it accounts for around 80 per cent of cryptocurrency electricity consumption, “lots of blockchains or cryptocurrencies are not necessarily energy intensive,” Harrison explains.
She continues, “Perhaps the best known example is Ethereum, which moved a couple of years ago from proof of work to proof of stake, and in the process, reduced its electricity consumption by over 99 per cent overnight.” Although this process may be more difficult to replicate with a cryptocurrency such as Bitcoin, due to its decentralised and fungible structure, case studies such as Ethereum’s provides what Harrison believes as “inspiration” for the sector.
Taking accountability
With all signs pointing towards a progressive and greener sector, is it right then for crypto to still be considered the enemy of sustainability, or is it time the public shed their misconceptions?
“Certainly over the last few years, there has been a shift in perception, and perhaps a better understanding as to where electricity consumption comes in,” says Harrison, where the rise of AI and the energy consumption that involves it have perhaps opened up new conversations about wider ecological impacts.
Yet, in an environment where crypto has, as Chierici puts it, “garnered a great deal of media attention over recent months, spotlighting the sector’s lack of transparency,” and with Columbia University naming energy consumption as crypto’s “dirty little secret,” it might be easy to believe that crypto’s environmental impacts are still being actively concealed by the industry.
Harrison instead airs it out in the open: “There is no question that cryptocurrencies, and in particular Bitcoin, are a big consumer of electricity, and that is projected by the International Energy Agency to grow fairly significantly.”
Rather, she understands that it is up to the intermediaries, CASPS, and trading platforms to make their own decisions and take responsibility, as to how they might tackle their carbon footprint.
“What we’ve been concentrating on at Zumo is: how do we take responsibility as a CASP? How do we calculate our own responsibility for that electricity consumption, and how do we fairly take account of that through the procurement of renewable electricity?”
Setting the precedent
So will the future of the sector ever be 100 per cent green?
Smiling as she answers, Harrison paints a hopeful, albeit still cautious, picture of what lies ahead: “The technical answer to that, for grid balancing reasons, is that it’s very difficult to operate anything on 100 per cent renewables all the time.
“But I think within cryptocurrency, we’ve got a better chance than most other sectors of getting really, really close to it.”
With sustainability now seen as “central” to how businesses work and operate, and where pledges to bettering the environment matter just as much to clients and investors as the executives that implement them, if the will of the crypto industry is on her side, for Harrison anything is possible.
“I think we need to be positive and yet realistic. We’re not there yet. We’ve got a long way still to go, but let’s lead the way and show other sectors how it can be done.”
“Just a few years ago, sustainability within the crypto space was quite an evolving field. Since then, I think it’s moved on massively, and there’s a lot more going on in the ecosystem now,” she says, reflecting on the changes that have taken place over the course of her career.
One of these changes — the Markets in Crypto-Assets Regulation (MiCA) — intended to harmonise legislation for crypto-assets across the EU, which at the time of MiCA’s implementation did not have a place within existing financial services regulation. A key aspect of MiCA has been its introduction of sustainability disclosure requirements, where crypto-asset service providers (CASPs) must disclose information surrounding adverse environmental impacts, including energy consumption, carbon emissions, and the use of renewable energy for crypto assets.
“By requiring sustainability disclosures, MiCA provides that level playing field where everybody’s got to talk about what they’re doing,” affirms Harrison. “It certainly makes everybody sit up and take notice.”
It is not just firms that have taken notice. Stefano Chierici, senior product manager, financial information at SIX, believes that the MiCA mandates have been a long time coming. With the industry clamouring for change and better regulation, he is confident MiCA’s adoption “is sure to bring enhanced transparency to markets and a new level of investor protection.”
However, whether Harrison believes the mandates have been the push the industry needs to place sustainability at the forefront of their operations, she still holds her reservations. “Although it’s great to see sector-specific sustainability disclosures coming in,” she muses, “there has been no precedent for doing that, and it remains to be seen if this will have positive outcomes. Hopefully it incentivises change within the sector.”
Moving in the right direction
And yet, change has come. Innovations and new mechanisms have signalled the start of a positive, and perhaps a still little tentative, shift in the ways in which crypto sources its energy.
As Harrison outlines: “We’ve seen a lot of evolution in the sector and a maturation of the market. For example, there’s been a lot of innovation in terms of how Bitcoin mining is powered, and how it can be used to balance grids.”
The rise of these ventures, such as methane clearing and grid balancing (where, in times of high and low energy demand, mining operations can use the extra energy generated by power providers that might otherwise have been ‘grounded’ and gone to waste), are only some of the efforts the industry has implemented to decarbonise crypto mining.
Renewables, such as solar and hydroelectric power, have also played a major role in mitigating energy consumption, an area that Harrison believes crypto has an advantage over other sectors.
“Technologically, we know how to move to renewable electricity relatively easily. Compare this to other sectors, such as aviation, which are much more difficult to decarbonise.”
Yet, being at the forefront of change has not come without added scrutiny and pressure.
Although crypto has the ability to evolve faster than many other sectors, Harrison is aware of how this might reflect on the sector, where “perhaps that also places a greater responsibility on us.”
The nature of crypto consumption is also not all it seems. Although Bitcoin tends to dominate the debate surrounding the energy-intensive nature of crypto mining and rightly so, seeing as it accounts for around 80 per cent of cryptocurrency electricity consumption, “lots of blockchains or cryptocurrencies are not necessarily energy intensive,” Harrison explains.
She continues, “Perhaps the best known example is Ethereum, which moved a couple of years ago from proof of work to proof of stake, and in the process, reduced its electricity consumption by over 99 per cent overnight.” Although this process may be more difficult to replicate with a cryptocurrency such as Bitcoin, due to its decentralised and fungible structure, case studies such as Ethereum’s provides what Harrison believes as “inspiration” for the sector.
Taking accountability
With all signs pointing towards a progressive and greener sector, is it right then for crypto to still be considered the enemy of sustainability, or is it time the public shed their misconceptions?
“Certainly over the last few years, there has been a shift in perception, and perhaps a better understanding as to where electricity consumption comes in,” says Harrison, where the rise of AI and the energy consumption that involves it have perhaps opened up new conversations about wider ecological impacts.
Yet, in an environment where crypto has, as Chierici puts it, “garnered a great deal of media attention over recent months, spotlighting the sector’s lack of transparency,” and with Columbia University naming energy consumption as crypto’s “dirty little secret,” it might be easy to believe that crypto’s environmental impacts are still being actively concealed by the industry.
Harrison instead airs it out in the open: “There is no question that cryptocurrencies, and in particular Bitcoin, are a big consumer of electricity, and that is projected by the International Energy Agency to grow fairly significantly.”
Rather, she understands that it is up to the intermediaries, CASPS, and trading platforms to make their own decisions and take responsibility, as to how they might tackle their carbon footprint.
“What we’ve been concentrating on at Zumo is: how do we take responsibility as a CASP? How do we calculate our own responsibility for that electricity consumption, and how do we fairly take account of that through the procurement of renewable electricity?”
Setting the precedent
So will the future of the sector ever be 100 per cent green?
Smiling as she answers, Harrison paints a hopeful, albeit still cautious, picture of what lies ahead: “The technical answer to that, for grid balancing reasons, is that it’s very difficult to operate anything on 100 per cent renewables all the time.
“But I think within cryptocurrency, we’ve got a better chance than most other sectors of getting really, really close to it.”
With sustainability now seen as “central” to how businesses work and operate, and where pledges to bettering the environment matter just as much to clients and investors as the executives that implement them, if the will of the crypto industry is on her side, for Harrison anything is possible.
“I think we need to be positive and yet realistic. We’re not there yet. We’ve got a long way still to go, but let’s lead the way and show other sectors how it can be done.”
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