The fourth edition of the prestigious NFT.NYC 2022 is taking place in New York from the 20th to the 23rd of June, featuring the annual Non-Fungible Token Event in the industry. Over 12,000 participants have registered to listen to 1,500+ speakers including thought-leaders from Polygon, VarnerNFT and more from over 76 countries. The three-day event is happening at Times Square in the heart of New York. Most of the LED boards in the cosmopolitan city of New York will be displaying stunning NFT-related projects during the conference days.
Simon Telian, Chief Investment Officer of Advanced Blockchain (AB) will participate in a panel session titled NFTs & Impact Investing: A Natural Fit that unites two of Simon's interest areas, NFTs and impact investing. Impact investing will be essential in promoting and sustaining environmental and social improvements. In particular, the panel discussion subject has become increasingly popular among young people globally who are actively investing and socially aware of their environment. NFTs as an investment vehicle have shown remarkable growth within the last two years. Leveraging the immutability and transparency of the blockchain, it continues to spawn attractive opportunities in the area of impact investing.
Simon, alongside other panelists, will discuss these impact investing opportunities the NFT sector provides, their advantages and disadvantages and which use cases already exist that can be further improved upon.
Impact investing provides an interesting and socially-aware investment vehicle for people aptly hitting the sweet spot of being both sustainable and lucrative. And a lot of people are interested in NFTs for their potential to generate huge returns. But what if you could do both?
What is impact investing?
Impact investing is defined as “investments made into companies, organizations, and funds to generate a measurable, beneficial social or environmental impact alongside a financial return.” In other words, your money goes towards doing good and making a difference while also earning you a profit. Recent research by Bloomberg Intelligence is pegging Global ESG assets at over $41 trillion by 2022 and $50 trillion by 2025, representing one-third of total assets under management globally. The ethos behind impact investing is to benefit society by using the acquired assets that generate measurable returns for an organization doing something good in the world.
What are NFTs?
An NFT is a unique non-fungible token that cannot be replaced by another identical token. As digital assets NFTs are tradable (bought and sold) and stored on a blockchain. Like other asset market cycles, the NFT sector surged from $100 million in 2020 to $22 billion in 2021 within two years. With interesting use cases for NFTs spawning daily, the demand (impact investing inclusive) has continued to grow.
What type of impact investing goals that we target?
As a reference to the UN, the most important sustainability development goals (SDG) to keep in mind are:
GOAL 1: No Poverty
GOAL 2: Zero Hunger
GOAL 3: Good Health and Well-being
GOAL 4: Quality Education
GOAL 5: Gender Equality
GOAL 6: Clean Water and Sanitation
GOAL 7: Affordable and Clean Energy
GOAL 8: Decent Work and Economic Growth
GOAL 9: Industry, Innovation and Infrastructure
GOAL 10: Reduced Inequality
GOAL 11: Sustainable Cities and Communities
GOAL 12: Responsible Consumption and Production
GOAL 13: Climate Action
GOAL 14: Life Below Water
GOAL 15: Life on Land
GOAL 16: Peace and Justice Strong Institutions
GOAL 17: Partnerships to Achieve the Goal
How can those NFTs make an impact on society?
When pursuing social or environmental benefits, crafting intentional investment activities/options is important. One must consider not only what they are doing but why and the impact it will have on those around them as well. After all, humans want their actions to be measured by how much good they bring to others. By leveraging values and ESG Goals, NFT creators have a golden opportunity to attract investors interested in making a difference with their money.
How are NFTs making impact investing easier?
Even though NFTs are still in their early days, they have already started making inroads into philanthropy. In February 2021, The Giving Block launched an NFT campaign to raise money for charity. Giving Block raised over $1 million for six different charities, including the American Red Cross and The Nature Conservancy.
Beyond philanthropy, NFTs also have the potential to help fund social enterprises, which are businesses that exist to solve social or environmental problems. Social enterprises often have difficulty accessing traditional funding forms, such as loans or venture capital. NFTs could provide a new way for social enterprises to raise money.
Examples of NFTs that have made an impact
A social enterprise project like ImpactPays uses NFTs to fund projects with a positive social or environmental impact. ImpactPays sells NFTs and then uses the proceeds to fund projects that align with its impact goals. So far, ImpactPays has funded a project that provides clean water to communities in Kenya and another project that plants trees in the Amazon rainforest.
NFTs could also be used to finance other types of businesses with a social or environmental mission. For example, an NFT could be used to fund a renewable energy project or a waste management initiative.
NFTs have the potential to revolutionize impact investing. By making it easier for people to invest in social and environmental causes. For example, the CarbonLand Trust ESG NFTs are backed by carbon removal credits from forest land to sequester CO2. Furthermore, individual entities may offer several non-fungible sustainability tokens that validate ESG-related accomplishments. Regarding educational empowerment, Teilur’s ESG NFTs are empowering individuals via finance technology training in developing countries to grow those regions' financial infrastructure and economic output. Follow the link for more examples.
Therefore NFTs could help solve some of the world’s most pressing problems. They create a clear way to measure the social or environmental return on investment (ROI) while being accessible for everyone.