Environmental Sustainability in the Auction Industry

Earlier this month, Christie’s announced its intention to be net-zero by the year 2030. It is the first major auction house to publicize a comprehensive environmental sustainability plan. Christie’s outlined its pathway to sustainability in a press release. Steps include halving its carbon emissions, diverting landfill waste, and switching to recyclable packaging. 

“We know the broader art industry shares the desire to combat climate change, and we promise to use our leadership position to drive positive change, actively looking to form collaborations with stakeholders across the art world and beyond,” said Tom Woolston, Christie’s Global Head of Operations. 

In light of this announcement, Auction Daily explores the issues of environmental sustainability in the auction industry.

How Auctions Impact the Environment

The auction industry can exact a heavy toll on the environment. Carbon emissions typically come from shipping and logistics, including transporting consignments, sending out purchased auction items, and managing internal processes. Building maintenance and business travel can also increase an auction house’s carbon footprint. Christie’s released an analysis of these factors near the end of 2019. In a single year, the auction house produced 33,743 cubic tons of carbon and other greenhouse gases. This is approximately equivalent to the yearly emissions of 7,300 passenger vehicles.

Sotheby’s leadership team made predictions for the 2020 art market in 2019. They anticipated an emphasis on environmental sustainability, telling ARTnews that “there will… be a shift in how art itself reflects the growing concerns of our ecological crisis, and the types of art collectors are interested in.” That trend has already started. Auction houses sell artworks, but they can also endorse environmental activism, seek out sustainable artists, and host charity auctions for various causes. While those elements may not directly impact the atmosphere, they can influence culture and buying habits. 

Many auction industry leaders already acknowledge this responsibility and opportunity. The Financial Times notes that “87 per cent of the world’s wealthiest individuals, families, family offices and foundations said the effects of climate change played a part in their investment choices.” Because art is a form of investment, auction houses have a strong incentive to become more sustainable. 

Sustainable Solutions

A year of digital sales and social distancing taught the auction industry some lessons. For example, the move to online spaces made paper materials mostly unnecessary. Christie’s successfully reduced its printed materials production by 75% during 2020. This made financial sense even when the company announced its paper reduction plan in 2019. The industry was settling into online bidding formats at the time, and both Christie’s and Phillips found that print catalogs carried less importance. In its 2020 Annual Report, LiveAuctioneers also stated that it saved 68 tons of paper through online bidding. 

However, the industry will need to take more aggressive steps to shrink its impact. Christie’s recent announcement included a commitment to the Science Based Targets initiative (SBTi), a partnership that helps private businesses reach sustainability targets. The goal is to prevent global warming beyond 1.5 degrees Celsius. The auction house also joined the Gallery Climate Coalition to develop an industry-level response to the issue. 

Collaboration and accountability will determine the success of these solutions. At a 2020 sustainability conference, art world leaders emphasized the need for data collection, carbon offsets, and sustainably-minded exhibitions. A single company’s actions may not sway the industry, but a coordinated response could lead to lasting changes. 

Cryptocurrency, NFTs, and Current Issues

While the auction industry is addressing its environmental sustainability problems, new concerns are on the rise. The first few months of 2021 have seen an explosion of interest around crypto art and non-fungible tokens (NFTs). These digital artworks moved from somewhat fringe online spaces to the mainstream auction world after a series of high-profile events. NFTs could now sell for millions of dollars at auction, including Beeple’s EVERYDAYS: THE FIRST 5000 DAYS, which achieved USD 69.3 million with Christie’s yesterday. This shift toward digital artwork complicates discussions of art world sustainability. 

Cryptocurrency mining notoriously requires massive amounts of energy. To mine proof-of-work cryptocurrencies such as Bitcoin and Ethereum, special computers must run complex calculations that burn electricity. Most of this electricity comes from fossil fuels, and the burned carbon adds up. According to The Guardian, cryptocurrency mining consumes more energy per year than Apple, Facebook, Amazon, Microsoft, and Google— combined. Its carbon budget is roughly the same as Norway’s. NFTs are not exempt from this process. Digital artists, including Joanie Lemercier and Memo Akten, are already raising the alarm about NFT artworks’ environmental impact. 

As the auction industry embraces NFTs, the debate around their sustainability is entering the art world. Cryptocurrency transactions demand a continuous energy investment. That continues from an NFT’s creation to any auction appearances. While auction houses are tackling traditional issues of environmental sustainability, the rising cryptocurrency trend may reverse the course.

Looking to read more about the auction industry? Auction Daily recently discussed the issues of representation, leadership, and art world diversity.