Sustainability in the Art Market
Updated: Aug 7, 2022
The art market has expanded significantly in recent years, becoming a fully-fledged alternative asset class. Indeed, a growing number of private and institutional investors are looking for new investment alternatives with varying risk and return profiles and are deciding to invest some of their wealth into the art market. Moreover, the art market displays extremely low correlation coefficients with other asset classes, which gives a great incentive for investors to invest a share of their wealth into art to achieve a more diversified portfolio.
A rise in art data availability accompanies this growing interest in the art market. Databases, indices, and art market analyses have recently emerged, empowering investors, and allowing them to make more informed investment decisions. Furthermore, several art-focused funds have recently appeared, making it easier for modest investors to invest in a diversified art portfolio. Also, many major firms are major art collectors, implying that investors may be indirectly investing in the art market. In other words, art collectors increasingly see art as an investment and less as a consumption good. All these factors result in the art market being at an all-time high with auction houses reporting record prices. As art is becoming an increasingly appealing asset class for investors, investors must assess and understand the environmental impacts of collecting art.
Unfortunately, art is a very polluting industry. On the one hand, artworks and art installations are generally produced using polluting and non-renewable materials. For example, due to rainwater runoff, an outdoor artwork may have a covering that emits harmful compounds. These items can pollute rivers and have significant repercussions for ecosystems and, in the long run, human health. Also, temporary art installations and materials used during short-term events are rarely recycled when dismantled, which causes a lot of waste. On the other hand, the art market causes a lot of greenhouse gas emissions due to the transportation of humans and artworks. For example, some artworks are frequently shipped and travel the world many times to be exhibited in different countries. Moreover, the art market is responsible for a great amount of human transportation around the world, as art enthusiasts frequently travel to attend exhibitions or international art fairs. To summarize, the art market is considerably lacking in terms of sustainability.
Despite that, the art market’s attitude toward sustainability is currently changing, mostly due to the COVID-19 pandemic and the raising awareness regarding the climate crisis. In 2020, as exhibitions and art fairs got canceled worldwide, the art market had to reinvent itself and find new ways to display artworks and attract an audience. During the pandemic, many collectors turned to online platforms, as online sales reached a record high of $12.4 billion. Moreover, many artists, galleries, and art fairs created new virtual channels to see and enjoy art, such as virtual and online exhibitions. This eliminated a lot of travel and both galleries and collectors reflected on their travel behaviors. Indeed, many of them realized that they would not need to attend so many art events abroad in the future, as online solutions resulted in a great alternative.
As the pandemic offered a glimpse of an alternative to function more sustainably, many art market players increased their efforts to offer a more sustainable way of doing their business. For example, a group of gallerists and art professionals founded the Gallery Climate Coalition (GCC) in late 2019 to set recommendations and guidelines to make the art market more sustainable. As a starting point, the GCC identified a few important areas of action to assist galleries in determining viable actions to minimize their emissions. More specifically, they focus on the transportation of artworks, business travel, and energy consumed in galleries which are the activities that contribute the most to greenhouse gas emissions in the art sector. Other art players are recently showing signs of wanting to conduct their activities more sustainably. Auction house Christie’s pledged to be carbon net-zero by 2030 whereas art gallery Hauser & Wirth appointed a Global Head of Environmental Sustainability.
To summarize, investors are increasingly participating in the art market as they seek assets that offer different risk-return profiles and want to diversify their portfolios. However, they must be aware that participating in the art market is not environmentally friendly and should therefore be cautious regarding their consumption and purchasing behavior. One of the most effective ways collectors can fight for a more responsible art industry is by carefully screening whether the gallery, museum, or artist with whom they are doing business is adopting sustainable practices or is a member of a climate solutions group such as the GCC.
Artland (2017). Sustainability in the Art World: Fighting the Environmental Crisis
Max Beinhacker (2020). Art and Sustainability: The Responsibility of the Art Market
The Art Newspaper (2019). How the art world is going green
Artsy (2021). How Collectors Can Advocate for a More Climate-Conscious Art Market
Le Temps (2019). Le lourd bilan carbone de l’art contemporain