Ethical & Sustainable Crypto: How to Assess Digital Tokens Responsibly

We often think of crypto as the future of finance: Fast, decentralized, borderless. 

But here’s a tough question: At what cost? Is it time we take a closer look at crypto through the lens of ethics and sustainability? Here are some harsh facts:

• Bitcoin mining alone produced 21.5 to 53.6 million tons of CO₂ in a single year (2018). This number is comparable to the emissions of an entire country (!).

• Many tokens are linked to objects that may not even exist or can’t be verified over time. This puts buyers at risk of owning nothing but a hash on the blockchain.

• Permissionless blockchains mean no central authority to appeal to. This creates space for money laundering, fraud, and ethically questionable practices.

New tokens and platforms appear daily, promising high returns and early-mover investors. However, there’s no clear or reliable way to measure which projects are built to last and which are just hype. 

Thus, investors face major risks such as massive environmental costs, buying tokens with no real social value, and fraudulent platforms with weak governance.

So, what is the best way to choose a crypto project to invest in, do it ethically, and avoid scams?

Three pillars of ethical investment

Recently, Dr. Elena Szederejei and Dr. Roderik J. P. Strobl released the article An ESG impact framework for distributed ledger technologies with a specific focus on crypto tokens and settlement platforms. They argue that crypto needs a clear way to tell responsible projects from hype or those harmful to investors and society.

Thus, Szederejei and Strobl propose to use a clear, structured framework based on the three pillars of environment, society, and governance (ESG).

Environment

On the environmental side, they suggest looking closely at the technology that powers a token or platform. Proof-of-work systems, like those used by Bitcoin, consume enormous amounts of energy and have a heavy carbon footprint, while alternatives such as proof-of-stake or proof-of-time can be far more sustainable. 

Even small details matter. For example, NFTs created in lighter file formats (like vector graphics) require significantly less energy to process than heavy image files.

Society

When it comes to society, Szederejei and Strobl recommend asking: What does this token actually contribute? A token tied to rainforest conservation, fair-trade art, or renewable energy clearly has a more positive social value than one fueling speculation or destructive industries. 

The authors stress that crypto projects should be judged by their ability to foster trust, fairness, and ethically positive results, not just financial returns.

Governance

The third pillar is governance. Here, the authors highlight transparency and accountability as essential. 

Investors need reliable information about who created the token, who validates the network, and whether the underlying assets even exist. 

Without clear governance, tokens can easily become tools for money laundering or greenwashing.

United Database for Investors

With the three key factors outlined, the next question is: How can we structure this data for investors?

One of the most concrete suggestions in the paper by Dr. Elena Szederejei and Dr. Roderik J. P. Strobl is the creation of a public ESG token database.

Right now, if you’re an investor or even just a curious observer, it’s almost impossible to compare tokens in a consistent way. Two analysts can look at the same project and come up with completely different ESG ratings because there’s no shared standard. This lack of clarity opens the door for confusion, greenwashing, and risky investments.

A public database would change that. Imagine a platform where every token and settlement system could be evaluated against transparent, uniform criteria:

• How much energy does it consume, and from which sources?
  
• Does it serve a meaningful social purpose or just speculative hype?
  
• Who are the creators, validators, and investors, and is that information verifiable?
  
• Are there anti-money laundering safeguards in place?
  

By pulling this information together in one accessible space, the database would make it easier to identify truly sustainable projects and put pressure on less responsible ones to improve their practices.

Indeed, today, crypto is rewriting the rules of finance and culture. But for all its innovation, it still leaves us with big questions about energy use, ethics, and accountability.

That’s why the idea of a public ESG token database is so powerful. With clear, transparent data, investors, creators, and even regulators could finally separate the hype from the genuinely sustainable projects. It’s a step toward making crypto not just innovative, but also ethical, fair, and safe for everyone involved.

🔍 Want to dive deeper?

This blog only scratches the surface. The full research paper by Dr. Elena Szederejei and Dr. Roderik J. P. Strobl goes into detail on the environmental footprint of crypto, the social consequences of NFTs, and the governance blind spots investors often overlook.

👉 Read the full study on ESG and Crypto Tokens here.