Sustainability of the Metaverse: A Transition to Industry 5.0

Abstract

This study analyzes the sustainability of the metaverse technology by adopting a responsible digitalization perspective to drive the transition to Industry 5.0. This is motivated by the current experiences of digital transformation paths, which appear careless regarding the side effects induced when adopting digital technologies—for example, the energy consumption associated with blockchain, the jobs lost due to 3D printing, and the continuous payments required by artificial intelligence systems. While very few sustainable solutions are currently available to properly address these issues, similar effects might materialize when adopting metaverse technology. Therefore, this study provides tools to undertake a responsible digital transformation path through the metaverse to properly manage the transition to Industry 5.0. Specifically, it offers a set of frameworks to analyze the metaverse either from the perspective of the triple bottom line or by adopting an environmental, social, and governance (ESG) perspective and linking it to the most impacted business strategies or by connecting the technology to the sustainable development goals (SDGs). These tools enable readers to understand how society at large can responsibly implement, adopt, and manage a metaverse. By utilizing these frameworks, businesses can identify the most impacted strategies and take action to address any potential negative impacts.

1. Introduction

In 1992, Neal Stephenson—the science fiction author of the novel Snow Crash—coined the term “metaverse” for the first time, defining it as “A massive virtual environment parallel to the physical world, in which users interact through digital avatars” [1]. The word metaverse is a semantic calculus derived from the English word “universe” in a perfect conjunction between past and present: in fact, it combines the prefix in ancient Greek “μετα-” (“through”) with the suffix “-verse.” Etymologically, the metaverse is associated with something beyond the universe. In this sense, the metaverse can be defined as a three-dimensional space within which physical people and objects can move, share, and interact [2]. In fact, the metaverse combines physical reality with digital virtuality, allowing for the development of interactions and connections between users through platforms where social relationships develop [3]. In an increasingly hyper-connected world, where people can do everything with a simple device, the metaverse can be seen as the final frontier of other technologies, such as the Internet and e-commerce [4].

Although metaverse technology is still in the early stages of development, it promises to be a set of interconnected virtual and real worlds whose inhabitants will be able to carry out many habitual activities without having to physically move [5]. In this regard, many companies have taken an approach toward this new reality, seeing opportunities for business growth. In fact, the metaverse is a virtual world in which each person corresponds to a digital avatar, with opportunities to interact, manage, direct, and monitor certain spaces [6]. In principle, the metaverse can allow firms to elevate the potential of business units, affording the opportunity to buy and sell products, monitor processes, obtain information, adjust the forecast, and provide services, to mention a few. Therefore, it becomes a digital facsimile of what firms do and how they live in the real world, whose potential seems unlimited [5,6].

Among the various business aspects that characterize the metaverse, firms and institutions must be ready to address an important question: Is the metaverse a responsible form of technology? This question becomes definitely more urgent due to the advent of Industry 5.0, which represents a fundamental shift in the way industries operate. By incorporating the latest advancements in technology, Industry 5.0 promises to create a more efficient, sustainable, and socially responsible business model. Within this new framework, it is not just the technology that makes Industry 5.0 so important; rather, the human element is also crucial, as it seeks to empower workers and create a more meaningful and fulfilling work experience. By creating a more sustainable and socially responsible businesses, Industry 5.0 can help us move towards a more equitable and just society. As such, studying Industry 5.0 is essential for anyone who is interested in a responsible future and the role that technology can play in creating a better world. By understanding the principles and practices of Industry 5.0, businesses, policymakers, and academics can work together to create a more sustainable and equitable future for all. Under this perspective, the metaverse represents well-fitting technologies with the Industry 5.0 paradigm since humans will heavily interact in the virtual world, which then requires a sustainable and responsible implementation.

The literature on digital transformation has comprehensively documented how the adoption of some digital technologies has detrimental effects on many aspects of sustainability. For example, robotics application technologies help manufacturing systems handle repetitive jobs, and continuous systems achieve economies of scale, and efficiency [7]. All robotics equipment includes sensors, intelligence to make autonomous decisions, and collaborative operations with humans (cobots) for improved productivity, quality, and lead times [8]. However, robotics can be seen as a threat [9], leading to changing working conditions and wages, the risk of job loss, and the need for training programs [10]. Similarly, the use of big data can ensure the optimization of operations in terms of low scrap rate, high saturation of manufacturing equipment, low waste, and superior energy efficiency [11]. However, production systems using big data can become highly capital-intensive [12], which may result in overall higher energy consumption [13]. The empirical evidence demonstrates that the use of big data requires data centers to consume around 200 terawatt hours annually, which is more than the energy consumption of some countries (e.g., Argentina, Ukraine, and Thailand), half of the electricity used for transport worldwide, and around 1% of global electricity demand [14]. Currently, data centers contribute approximately 0.3% to overall carbon emissions, while the ICT sector accounts for more than 2% of global emissions [15]. Finally, the adoption of I4.0 technologies aims to increase productivity throughout the supply chain (SC) [12]. Nevertheless, the presence of outdated production and logistics systems can result in increased emissions and pollution, with a strong detrimental effect on the environment. Accordingly, digital transformation through I4.0 technologies may require a disruptive change in SCs, including green investments in terms of products, processes, and SC networks [16], which negatively influence the efficiency of processes and flows.

Similarly, the metaverse may have important implications in terms of economic, environmental, and social sustainability, and it may also entail numerous trade-offs. For example, accessing the metaverse leads people to reduce their mobility over the eco-system, implying a reduction of CO₂ emissions linked to decreased transportation. However, this might create some social issues due to the reduction of physical relationships and social interactions [17]. Considering that the metaverse will consist of a disruptive technology wave, the identification of tools for responsible digitalization will guarantee proper implementation and adoption, as well as fruitful management. Therefore, it is important to engineer the metaverse with an Industry 5.0 perspective, which seeks people to play an active role in the technologies respecting human rights, working conditions, social integration, and dignity along with the respect of the environment and future generations to come. To pursue these goals, this study borrows the concept of responsible digitalization, which is defined by [18] as a firm’s ability to achieve corporate social responsibility (CSR) goals by adopting digital technologies. Accordingly, firms should not exclusively focus on digital technologies as merely boosters to enhance economic performance. Rather, they should carefully evaluate the implications of digital technologies in terms of environmental effects and social goals. Although this concept was later used in the context of blockchain [19], smart contracts [20], the digital circular economy [21], artificial intelligence (AI), the Internet of Things (IoT), big data, intelligent transport systems, robotics, and 3D printing [22] and has also appeared in recent surveys [23], to the best of our knowledge it has not been used to analyze metaverse technology so far.

Undertaking a responsible digitalization approach seems to be quite urgent since the possible tradeoffs emerging from metaverse technology are fairly clear [24]. For example, the metaverse has the ability to disrupt activities requiring the use of urban resources, such as office spaces, transportation infrastructure, entertainment centers, and other energy-consuming facilities [17]. Through the metaverse, the demand for these activities and objects will be substantially decreased [25]. From an environmental point of view, the metaverse will then entail an interesting trade off: on the one hand, the technology implies a high level of energy consumption [26]; on the other hand, using the metaverse reduces demand for the aforementioned activities and, consequently, the energy consumed [25]. Similarly, the metaverse generally favors social interactions within the digital world, despite the significant reduction of social interactions in the real world [27] and the possible psychological implications [24]. Considering the disruptive impact that the metaverse can have on society at large, this research seeks to answer the following question: Can the metaverse lead to a responsible digital transformation? Can the metaverse guide the transition to Industry 5.0? Accordingly, this study explores the implications of the metaverse in terms of responsible digitalization to identify paths and directions that firms, supply chains, and institutions can take to responsibly implement this technology. Therefore, this research defines tools to implement, adopt, and manage the metaverse with responsible digital transformation objectives through the following: 1. Analyzing the impact of the metaverse on the triple bottom line; 2. Identifying the pros and cons of the metaverse for the most impacted business strategies in terms of the environmental, social, and governance (ESG) perspective; and 3. Connecting the metaverse to the sustainable development goals’ (SDGs) objectives and criteria.

The remainder of the study is organized as follows. Section 2 identifies a link between the metaverse and the triple bottom line. Section 3 delineates sustainability opportunities and challenges the metaverse entails in the major business units by adopting an ESG perspective. Section 4 connects the metaverse to the SDGs and identifies a bridge between these two fields. Section 5 briefly concludes and highlights future research directions in this domain.

2. Meta-Literature Review on the Metaverse Concept and the Triple Bottom Line

Following the introduction of Neal Stephenson’s definition of the metaverse [1], the technology itself has been subject to several interpretations and various arrangements. Matthew Ball defined the metaverse as “an expansive network of persistent, real-time rendered 3D worlds and simulations that support continuity of identity, objects, history, payments, and entitlements, and can be experienced synchronously by an effectively unlimited number of users, each with an individual sense of presence.” [28]. The Cambridge Dictionary defines the metaverse as “[…] a virtual world where humans, as avatars, interact with each other in a three-dimensional space that mimics reality.” [29]. Considering the importance of the metaverse, Facebook decided to change the company’s name to Meta in October 2021, with a clear aim of establishing a connection between technology and people in order to make them protagonists [30].

Although a common definition has yet to be developed, there is currently a growing interest in the metaverse since it offers many opportunities as well as numerous drawbacks. In this regard, metaverse developers and adopters must verify whether metaverse implementation and management align with the concept of responsible digital transformation [18]. In other words, they must verify that the metaverse allows developers and adopters to achieve environmental objectives [31] and social scopes [32] in conjunction with economic targets. Therefore, we seek to provide tools to comprehensively recognize the trade-offs entailed by the metaverse through an analysis of the triple bottom line, which consists of economic, environmental, and social impacts. It is only when the metaverse seeks the objectives of economic, environmental, and social sustainability that responsible digitalization objectives can be pursued. While the implications of the metaverse on the triple bottom line are detailed in the next paragraphs,

Table 1. The triple bottom line’s risks and opportunities with the metaverse.

	Economic Performance	Environmental Performance	Social Performance
Opportunities	- new markets for digital goods - new services [2] - brand enhancement, awareness, and engagement [33] - efficiency in terms of resources and material savings, production cycles, inventory, and (in general) operations [34] - no need for monitoring and controlling systems since the technology is transparent and trustable [33] - no intermediaries and efficient transactions [20] - less complaints and reconciliation costs [20] - no fake goods and counterfeiting [35] - positive experiences lead to worldwide word-of-mouth [36]	- less space usage and then, waste [32] - services make people to travel less [37] - lower exploitation of natural resources [38] - less demand for transportation [32] - people do activities from home (e.g., take lunch) implying less energy and resources consumption [31]	- new competences and jobs [36] - new needs and purchasing immersive experiences [39] - no manipulation and corruption [40] - sensing physical goods in virtual spaces [20] - quick solutions to customer complaints [33] - cultural and social expansion [41] - new practices and modus operandi [39] - more physical activities planned to be conducted at home when using the metaverse [32]
Risks	- cannibalization of physical goods or traditional services [42] - pressure on just in time and atypical production systems [43] - no patience for delivering and designing goods [42] - activation of new data centers and storage systems [44] - investments in cloud and computing power [44] - investments in infrastructure with limited governments’ funding [32] - defining new strategies for old customers and markets [20] - duplicate investments to manage customers connecting in different platforms [32] - provide services and work 24/7/365 [36] - uncertain capacity of avatars to replicate the reality [43] - possible queues for managing and producing physical goods and design virtual objects [45] - new training programs and education paths [43] - culture of using and exchanging through NFTs [20] - defining new strategies for the unused physical capacity [46]	- more energy consumption linked to metaverse, which is open 24/7/365, leading to more emissions and heat [31] - request for new infrastructure (e.g., 5G) consuming more land [44] - reengineering of circular economy systems to also consider the metaverse flows [32] - use of resources and materials to make the devices needed for the metaverse to be properly used (e.g., VR helmet) [47]	- changes in the spending habits [2] - decreased real social interactions [37] - shortage of avatars to provide high level of service [38] - limited infrastructure in developing countries [41] - limited capacity to afford and access to technology [47] - increased number of mental diseases [24] - need for ad hoc protocols to avoid criminal activities, violence, and prostitution [40] - standards to avoid moving illegal amounts of money [20] - make sure to respect others’ religions, culture, and education [26] - decreased outdoor physical activities [24]

displays a summary of risks and opportunities linked to economic, environmental, and social goals.

2.1. The Economic Sustainability of the Metaverse

From an economic value point of view, the metaverse offers incredible opportunities to develop prosperity and economic growth. First of all, the metaverse consists of an atypical channel through which to sell physical goods, creating alternatives and options for customers [2]. Furthermore, it allows companies developing the digital market and sales of digital goods to create new purchasing experiences and inspire original purchasing motivations [6]. In fact, the metaverse grants selling options through non-fungible tokens (NFTs). For example, in the fashion industry, the metaverse acts as a new avenue for selling goods, such as digital clothes and accessories, which avatars can model, or homeware can embellish in the digital space [37]. The economic sustainability of the metaverse is then guaranteed by the development of completely new markets, inside which firms have opportunities to develop and sell a wide range of digital goods while organizing both virtual and traditional channels [33]. Interestingly, while digital channels and, in general, e-commerce entails inevitable frictions and generate cannibalization effects, the virtual market creates new needs without generating cannibalization issues [39]. In this way, brands will be able to further expand their product line, given their ability to build spaces and products that are unbounded by traditional physical limitations [2].

From the soft side, firms can leverage economic benefits available through the metaverse by offering a wider range of creative and active marketing and service strategies than in the past [33]. For example, current marketing tools include passive content marketing, i.e., infographics, photos, and videos. These have a low level of fit with the metaverse, in which marketing and service strategies influence firms’ positioning and offerings [6]. These opportunities link to the dominance of the Generation Z audience in business-to-business (BTB) transactions, who constantly demand immersive and engaging forms of marketing and unique services. The overall changes in the metaverse requires dramatically modifying firms’ selling approaches [36]. For instance, firms can set up online stores to sell digital products or propose immersive experiences through the use of virtual reality, which ensures user engagement and a subsequent increase in sales. These opportunities represent the key ingredients of the Industry 5.0 transition, which is characterized by a focus on human-centered technologies, increased collaboration between humans with technology and machines, and granted new chances for firms to innovate and enhance their business models. Specifically, the use of digital technologies, such as online stores and virtual reality experiences, can help firms to increase user engagement and ultimately drive sales. This highlights the potential for Industry 5.0 to enable businesses to create new value for customers and increase their competitiveness through the integration of advanced technologies with human skills and creativity. By extension, companies can consider developing their own branded NFTs for metaverse marketing, which could drive brand awareness and purchasing opportunities [39]. According to Statista.com, there is a significant interest in NFTs from brands, such as Adidas, Taco Bell, and Nike, and among customers [35]. Users’ ability to display and exchange, for example, works of art and real estate using blockchain-backed NFTs in the metaverse opens marketing opportunities for companies to develop their digital assets. Additionally, the opportunity to offer services, such as insurance, certain forms of health care, or consulting, induces new business options. For example, companies can sell digital products and services in the metaverse, such as virtual real estate, virtual goods, and virtual experiences, which can be produced and delivered at a lower cost compared to physical products, hence enabling the transition to Industry 5.0. Finally, the metaverse can reduce the pressure on production and retailing [33]. For example, retail companies can leverage augmented and virtual reality by enabling shoppers to virtually try on products before purchasing or tap into the metaverse as a testing ground to create prototypes of goods [32]. These ways of interacting with the customer activate the production systems only when goods are really needed, generating an enormous advantage in terms of material savings, production cycles, set-up cycles, and inventory, among other operational advantages [34]. The aim is to limit the production and subsequent waste, and this can be achieved by producing only the collections that are actually purchased within the metaverse.

Although the metaverse offers various economic benefits, there are a set of economic downsides that must also be considered [24]. The metaverse necessitates a large amount of data centers and storage, requiring enormous cloud-streamed data and a thousand-fold increase in computing power [44] and, consequently, increases in energy consumption and carbon emissions [31]. In fact, a fully digital world in virtual reality requires low latency to ensure minimal delays in the processing of computer data and the success of the entire business model. Therefore, the infrastructure of countries will make a significant contribution to properly implementing metaverse technology [48]. Furthermore, data centers must be located closer to users, resulting in a series of both environmental and economic costs. Companies will also be urged to create data centers that comply with data privacy and local legislation in less energy-efficient areas, resulting in larger company expenditures and making it difficult to successfully transition to full metaverse adoption [5].

Several brands are preparing to build and embrace the digital future, considering the metaverse an opportunity for business evolution, a brand expansion tool, and a new lever in the creation of competitive advantages [37]. Although this technology offers numerous advantages, such as allowing for greater efficiencies, saving time, and reducing waste and consumption, the current portfolio of consumers is very limited. Meta customers, who make the business model successful, should be taken care of since the metaverse will complement current customers’ purchasing habits rather than fully substituting it [2]. Especially for all non-Z Generation customers, the switch to the metaverse will simply be unfeasible. Companies, such as Nike with Nikeland or Balenciaga with virtual collections, support and promote virtual experiences through the use of digital twins and digital collections worn directly by avatars who live in the metaverse. The latter must provide their availability 24/7/365 since the metaverse never closes or expires [36]. Nikeland, for example, develops as a virtual laboratory that launches shoe prototypes: users can try on shoes in the virtual world before starting production in the real world [45]. However, customers can arrive inside the metaverse from all angles of the world, harming system capacity when selling physical goods. While traditional services, such as strategic consulting, medical visits, and insurance advice, can still be planned, customers do not experience in this culture the need to book a slot to purchase a physical good [43]. The avatars require more knowledge and skills than in traditional digital and physical channels since they face international customers, heterogeneous demands, as well as new and atypical requests [39].

There are several interfaces between the metaverse and the transaction cost theory. The metaverse allows firms to eliminate some intermediaries in the transactions since the supply chains become shorter and more dynamic [46]. In fact, the platforms for managing the transactions support market decentralization since the virtual spaces can be activated everywhere, and the avatars can act at any time [32]. Therefore, several supply chain tiers dissolve, making the transactions less expensive and marginalization less frequent. Furthermore, the value chains handle a reduced number of complaints and reconciliation procedures since the buyers have access to full information regarding objects to buy while enjoying reliability, and traceability, as well as no risk for fakes, corruption, and manipulation [40]. The use of digital currencies ensures the efficient management of transactions, especially through NFTs. They are “digital certificates” based on blockchain technology aimed at identifying the ownership of a digital product in a unique, irreplaceable, and non-replicable way by exploiting hardware, software, inbound, outbound, and human oracles [42]. These digital collectibles represent one of the business keys of the future of the metaverse. The results increase consumers’ trust and fidelity, which translates into a higher willingness to purchase and induces word-of-mouth effects in virtual and social networks. New forms of customer relationship management corroborate these business opportunities [43]. Considering the strict relationships between sellers and buyers inside the virtual environment, the metaverse allows companies to engage consumers better by providing more accurate information and details [36], as well as ensuring that goods are sold using the correct selling approach [39].

2.2. The Environmental Sustainability of the Metaverse

Similarly, metaverse technology can entail numerous environmental tradeoffs that firms, institutions, governments, policy makers, people, and stakeholders, in general, should consider when sponsoring its implementation [31].

As with other digital technologies, the metaverse requires an enormous amount of computing power, potentially rising to 1000 times the current computing power used [46]. Data centers worldwide are continuously operating to provide all of the energy needed, although they already consume a significant amount of the total energy of the planet [49], which will definitely increase when the metaverse goes public. The energy required will also be used for the transactions finalized through blockchain, as well as the continuous usage of AI technologies, VR, augmented reality, and cloud services [12]. These statements have already been empirically confirmed in many instances. For example, one single bitcoin transaction consumes around 60% more energy than 100,000 credit card transactions [19]. Again, one analysis in Statista.com found that a single NFT transaction produces, on average, 48 kg of CO2, the equivalent of burning 18 L of diesel [50]. According to the Ethereum Energy Consumption Index: “a single NFT transaction on the Ethereum platform emits nearly 150 kg of CO₂, equivalent to 331.056 Visa transactions or 2.895 h of watching YouTube”. In other words, every NFT purchase in the metaverse becomes an environmental problem. Therefore, the metaverse economy will be sustainable in the near future when activities in the metaverse can be carbon-free or neutral. For instance, Google aims to run data centers with completely carbon-free energy by 2030 and Microsoft by 2025 [51]. Currently located in Iowa, Facebook’s data centers—although not very large—own a 6.966 million megawatt hours energy consumption facility in 2020 [52]. One should not forget the learning capacity of AI inside the metaverse. Learning algorithms through AI models can emit up to 626,000 pounds of CO₂, which is five times more than an American car’s lifetime emissions [53]. The persistent virtual worlds and experiences promised by the metaverse will require an “overabundance of data in the cloud” [54].

On the positive side, the metaverse can considerably contribute to a more sustainable future by saving energy and reducing the waste resulting from producing, developing, and prototyping products [31]. Another positive aspect is that digital products and virtual experiences in the metaverse are significantly less resource intensive and more carbon efficient than similar real-world products [32]. For example, if consumers chose to buy more denim for their avatars rather than their physical bodies, the resource savings could be substantial, including all phases of procurement, production, and distribution [38]. In fact, lots of consumers already intend to buy fewer physical items in the future because they intend to do more things digitally. Continuing this trend, reducing the physical denim trade by 10% would reduce CO₂ emissions by the equivalent of the annual emissions of about 350,000 US internal combustion cars [55]. Moving on, leisure and business travel, both by air and on land, could also be significantly replaced by the metaverse. According to the Environmental Protection Agency (EPA), air travel accounted for 2.5% of global emissions before the start of the pandemic, after which the sector’s emissions were halved [56]. The implementation of the metaverse in the events sector would save organizers an enormous amount of money that is spent on concerts. Last year, the hugely popular video game Fortnite attracted 12.3 million people to attend a performance by rapper Travis Scott [57]. However, the metaverse requires new and more hardware for users. This will, in turn, worsen e-waste issues, considering that less than one-fifth (17.4%) of global e-waste is documented to be properly collected and recycled [21].

The metaverse, a highly innovative platform, promises a substantial reduction in carbon emissions by replacing physical goods with digital ones and replacing real-world presence with virtual interactions [37]. In principle, when elements of our physical world and lives are transferred to the digital world, the generation of emissions increases [19]. However, the current data centers’ objectives are striving to achieve ‘net-zero’ emissions [58]. Ideally, data centers remove as much carbon as they are emitting, with the objective of becoming carbon negative. Brad Smith, the President and Vice Chair of Microsoft, explained that the data center could become carbon negative, which would include but not be limited to using technologies, such as negative emission technologies (NET), afforestation, and reforestation [59].

In terms of congestion and traffic in cities and highways, the metaverse can make considerable contributions to the environment [32]. A positive correlation exists between the implementation of the metaverse and the reduction of air pollution due to diminishing transfers, generating lower vehicle emissions. Adopting a wider perspective, future research and technological developments should define a digital twin of the planet to develop solutions aimed at addressing climate change in the long run [60]. This should be a sort of “planet laboratory” to allow scientists to predict and simulate different scenarios and study possible environmental consequences. For example, it may be possible to develop a digital twin of a certain city using AI and satellite imagery to simulate scenarios and find urban solutions to issues, such as pollution, traffic congestion, etc. [61] The metaverse could also help to develop such an approach, either at the micro level (e.g., for houses and people’s lives) or at the macro level (e.g., analysis of climate changes). A practical example of emissions abatement when using virtual spaces can be found in [62]: A three-day national public conference with 1474 attendees held online produces 55 times fewer carbon emissions than a conference held at physical locations. Therefore, the metaverse could offer an advantage in terms of the reduction of CO₂ for conferences (where there are usually many attendees who come from around the world). Moreover, the chance to integrate a digital twin into the metaverse allows for the optimization of the physical world by monitoring a specific process (replicated online) within the virtual word. In fact, another advantage of the metaverse is that it can contribute to reductions in the real estate footprint [63]: digital twins of factories, products, or processes reduce a building’s carbon emission by 50%. Thus, customers can choose to rely on a sustainable product (online product) rather than going to the store, which contributes to reductions in the real estate footprint and, indeed, lower emissions. However, by far, the biggest sustainability opportunity of the metaverse can be found in cities, which now make up 70% of emissions [25]. Digital twins of cities and buildings can provide insights to city managers to build more efficient and sustainable cities. Lots of research demonstrates possibilities of reducing a building’s carbon emissions by 50%, improving operational and maintenance efficiency by 35%, increasing human productivity by 20%, and improving space utilization by 15% [60].

An important source of environmental impact comes from the terminals since the VR helmet entails production systems that are high polluters. Production requires special and rare raw materials, which will negatively contribute to the current raw material shortage the world is experiencing [47]. This issue will influence production in other sectors, e.g., the solar panel industry, which can instead be a booster for the metaverse to be sustainable. Furthermore, the production of those terminals, as with all high-tech devices, will be primarily based in Asia (China, Vietnam, and Thailand), generating important global warming repercussions due to long-distance transports [64]. All of these insights also apply to AR wristbands, AR glasses, VR headsets, cyber shoes, and tactile gloves. According to data from the United Nations Global E-waste Monitor 2020, 53.6 million metric tons of e-waste was generated worldwide in 2019, and waste is expected to exceed 74 million metric tons by 2030 [21]. The amount of waste in other sectors may decrease substantially. For example, in the fashion industry, considering that people will meet more in virtual spaces than in physical spaces, the demand for clothes will move from physical clothes to virtual clothes. This implies a reduction of natural resources used in the fashion industry, as well as a change in companies’ business focus [37]. At the same time, people can more accurately select the physical clothes they wish to purchase in the metaverse, leading to on-demand production, which in turn leads to a further reduction in energy consumption, natural resources, and waste [65]. This new paradigm can apply to many industries in which goods are designed and created through prototypes, with less waste and lower resource use.

2.3. The Social Sustainability of the Metaverse

Without hesitation, it is fair to say that society outside the metaverse has many differences since it is based on real interactions rather than on virtual interactions. Moreover, social issues—such as social exclusion, the gap between the rich and the poor, discrimination, etc.—will only be amplified through the metaverse [66]. However, considering the disruptive effect of this technology and the role it will play in the future, our real lives and our virtual lives should be balanced to guarantee the social sustainability of the metaverse [25]. In fact, creating an idealistic version of reality can have adverse effects on people’s lives. For the moment, there is no answer to the question surrounding the alignment between the digital world and the real world. Surely, companies, universities, associations, NGOs, and all possible stakeholders can work together to create an inclusive virtual society with a focus on issues, such as accessibility, diversity, inclusion, and equity [4]. In fact, the metaverse carries out the risks of amplifying some social effects, which must be carefully analyzed before diving into its implementation [26]. Furthermore, the social interactions inside the metaverse are a proxy of the interfaces between digital technologies and humans, which characterize the development of Industry 5.0. Hence, investigating the social dimension of the metaverse sheds light on the transition to Industry 5.0.

On a positive note, the metaverse can open up education to people worldwide, especially in developing countries and remote regions [67]. Therefore, the metaverse can ensure that a high level of education is delivered in virtual spaces using avatars. A level of collaboration among companies, universities, schools, NGOs, and governments can guarantee social inclusion and equity [4]. For example, regardless of income or geographic location, the opening of a meta university would offer engaging experiences and collaboration among students around the world, breaking down barriers to international mobility opportunities [47].

Indeed, these goals require a strong physical infrastructure to support an accessible, inclusive, and fair metaverse [48]. Currently, to enter the metaverse, one must have essential conditions, such as an account, a PC or an Internet connection, as well as adherence to the policies and regulations imposed by each platform [68]. For example, to enter the metaverse, in addition to having a Facebook account, one needs the Oculus Quest 2 VR visor, which costs about $400. These are the minimum conditions for using the metaverse, which naturally imposes social differences among social classes due to important economic distinctions. One clear example is provided by the fashion industry, where the metaverse offers the chance for people to virtually try on fashion items before physically purchasing them [37]. This happened through the use of technologies complementing the metaverse, such as the one designed by Samsung and called “e-skin”, which is a digital skin through which the wearers can feel the objects touched in the virtual reality world. This technology simulates the ability of human skin to react to the environment, from pain to sudden changes in temperature and pressure. However, such types of technologies are not universally accessible to everyone throughout the world, amplifying social discrimination and disparity.

Furthermore, one must recall the social effects of digitalization that lead people to isolation. This is true, especially for vulnerable people, who attempt to live in a virtual world, hence isolating themselves from the real world and everyday life [41]. These people can become addicted to the digital life inside the metaverse, which requires a high level of engagement. People are used to spending a lot of time in immersive metaverse experiences, sharing personal data and details that might result in data privacy issues [47]. This highlights the natural propensity of metaverse to make the transition to Industry 5.0 real and possible. Furthermore, people can shape avatars as they wish and adopt completely different behaviors behind VR visors. Accordingly, the metaverse requires regulation to prevent it from shifting from a great social opportunity to a fatal social threat. On the other side of the coin, it must be noted that the metaverse improves social self-efficacy by generating people’s support in their feelings of loneliness. Hence, it surely reduces discrimination in terms of race, gender, and physical disability [41].

Considering the implications of the metaverse in terms of ethics, security, and inclusion, attention must be accorded to its possible social repercussions. For many scientists, the metaverse is considered a way to reinvent healthcare treatments [69]. However, we know very little about whether the metaverse may, in fact, be responsible for numerous healthcare concerns in the psychiatric community. Indeed, in the UK, Instagram was accused of playing an important role in the suicide of a young teenager, “Molly Russel” in 2017 [70]. Many experts are becoming more concerned about the growing effects that technologies and social media have on mental health. The fear of witnessing, in conjunction with the development of the metaverse, increases depression, psychoticism, and paranoid addiction—especially in the younger generations—is being seriously studied by regulators [24]. In fact, immersion in the digital world can trigger health problems in users, in particular, their ability to discern between the real world and the virtual world. The vision of the metaverse as an ‘escape’ from reality would imply a sense of momentary well-being in which one has the illusion of being in a place considered “perfect.” The metaverse’s enabling elements are at least one technological generation away from the necessary maturity required to implement this new technological paradigm on a massive scale [32]. Therefore, there is an implicit risk of excluding those who do not have appropriate skills or socioeconomic factors supporting the use of these technologies, such as developing countries [26].

According to the current development of the metaverse, social sustainability requires regulations and protocols to ensure that security, data processing, and social issues are adequately addressed, as well as the ethical and psychological implications the metaverse may have on people [24]. This warning becomes definitely important nowadays due to the transition to Industry 5.0, which imposes a comprehensive reflection on both the benefits and the drawbacks linked to the implementation of immersive technologies, such as the metaverse. Moreover, the metaverse raises concerns about privacy issues and the fear of being hacked and having one’s identity stolen. The metaverse is a brand-new technology, so some people are uncertain about its safety and its ability to protect consumer data. Accordingly, people are requested to learn about the use of blockchain to guarantee data protection and privacy [46].

The metaverse can and will accommodate a whole series of activities that involve smart working or conferences, drastically reducing physical distance issues and bringing people closer together on a virtual level [62]. The social sustainability of this new ecosystem may be realized, for instance, with the implementation of Horizon Home, a platform developed by Meta that aims to promote socialization by recreating a potentially unlimited meeting place able to geographically connect distant individuals. As a consequence, the metaverse will require people to acquire new competencies and jobs, increasing demand for graphic designers, programmers, virtual fashion designers, etc. [71]. However, based upon the huge investments required to implement the metaverse, it is likely that only large companies will be able to launch such projects, potentially threatening SME businesses and possibly leading to workplace closures.

Finally, it is important to note that the metaverse opens up doors to people from many countries and regions. Therefore, the proper management of new people virtually accessing a country and the identified companies will generate a positive impact on the general welfare of that country and the related society [41]. This can lead to side effects, such as population growth attributable to future immigration flows into that country, cultural and social expansion, new and more proactive government legislation, larger GDPs, and new know how and innovative practices. On the other hand, individuals with bad intentions can use the metaverse for activities linked to criminality, violence, prostitution, and the export of capital outside the country, along with the risk of attracting terrorists into a territory and the reinforcement of criminal organizations’ activities, as well as adaptability issues linked to religious, cultural, and educational differences.

3. ESG Analysis of Business Strategies in the Metaverse

Since the world is rapidly moving toward the metaverse, it is important to analyze how firms should undertake responsible strategies for its implementation. Each strategy should consider the tradeoffs emerging through an ESG approach by analyzing the environmental, social, and governance perspectives, which are then summarized in

Table 2. Pros and cons of the metaverse for business strategies.

	Environmental Perspective	Social Perspective	Governance Perspective
			Economic Dimension	Stakeholder Dimension
Production	PROS: lower emissions and resources usage and waste [39] CONS: activation of energy consuming production processes [38]. Repurposing of some production facilities [32]	PROS: diversified goods offered to consumers [38] CONS: adjust the purchasing to the production outcomes. Possible delays due to the production complexity [43]	PROS: raw material savings and better organization of production resources [32] CONS: integrating digital and physical goods in one unique planning generates inefficiencies [31]	PROS: highlight the production process capacity to handle both physical and digital goods [20] CONS: understand how to justify that part of the traditional market will not be served due to the presence of digital goods [26]
Procurement	PROS: suppliers are paid through the smart contracts according to the real performance, with an incentive to reduce the defected goods and the waste [20] CONS: using blockchain increases the use of energy and heat [50]	PROS: diffuse transparency decreases the presence of fake goods and frauds [42] CONS: Important pressures on suppliers, who can be constantly monitored on the metaverse [32]	PROS: better selection of suppliers leads to efficient procurement and deals. No transaction costs when using blockchain [36] CONS: using NFT and cryptocurrencies can discriminate some suppliers, leading to lose convenient deals and agreements [46]	PROS: ensuring fairness and justice [42] CONS: excess of transparency can harm procurement policies driven by unwritten conditions (e.g., relationships with a historical supplier are favored independent of other purchasing conditions) [43]
Logistics	PROS: lower quantities moved over the supply chain decreasing congestion, emissions, and accidents [55] CONS: being exposed to an international trade market favors low frequency deliveries toward very far suppliers [6]	PROS: people will be less constrained by the availability of logistics [32] CONS: less requests for logistics services imply a decreasing need for jobs [26]	PROS: internal and external visibility ensured by the metaverse technology allow firms to optimize the logistics flows and networks [32] CONS: increase of agility, availability, and on-time delivery performance controlled by the blockchain [42]	PROS: highlight the logistics capacity to reach consumers with both digital and physical goods and service [20] CONS: investments to reallocate the logistics capacity. Requalification of employees [26]
Quality management	PROS: considering that blockchain governs the transactions, supply chain parties target excellent quality, which results in decrease of natural resources wasted [26] CONS: increasing number and frequency of controls requires more energy and IoT sensors, leading to more emissions. More resource usage due to VR tools [36]	PROS: metaverse ensures high levels of quality, which are monitored constantly by buyers before deciding whether to purchase. Transparency, traceability, fairness, originality, honesty, and visibility are all ensured [42] CONS: VR tools are expensive and cannot be afforded by the society at large [26]	PROS: Quality can be continuously checked by all parties in the metaverse, generating ad hoc payments [42] CONS: The blockchain makes smart transactions according to the quality levels, unauthorizing or penalizing transactions also when facing business challenges and disruptions [32]	PROS: communicate to the public the total quality management orientation reached through metaverse at all SC levels. This leads to more transparency, fairness, and reputation [3]. CONS: the metaverse can reveal some non-fully correct and fair practices adopted by stakeholders and suppliers, leading to a lower reputation [72]
Inventory management	PROS: waste reduction through inventory optimization [18] CONS: more energy consumption and heat due to the creation of virtual inventory and virtual goods [43]	PROS: people can have full visibility of the inventory and order it from wherever it is located [20] CONS: the metaverse reduces needs for operators managing the inventory, leading to social issues. The metaverse can distract from the serving vulnerable and fragile locations (e.g., developing countries) where physical goods will be still needed for many years [71]	PROS: higher turnover leads to lower capital absorption and then, holding cost. By giving visibility over the supply chain, the metaverse allows inventory to be optimized [43] CONS: low inventory leads to needs of rapid deliveries. Less opportunities for speculative purchases [32]	PROS: Announce the savings due to inventory optimization and the international recognition and brand due to lower waste [18] CONS: the lower needs for warehouses can generate the issue of reallocation or repurposing of capacity. If all business will move on the metaverse, these targets will be difficult to be achieved [41]
SC network	PROS: make a true environmental analysis and assessment of suppliers [34] CONS: suppliers willing to collaborate on the metaverse can be not-environmentally friendly [42].	PROS: Higher visibility allows firms to constantly monitor the suppliers and their actions [34] CONS: SC networks will be created in richer places where the metaverse can be implemented and used [41]	PROS: SC relationships will become more transparent and trustable, thus enhancing SC visibility [42] CONS: SCs will be disrupted and shortened with many suppliers being withdrawal [40]	PROS: the governance will announce expanding the supply chains’ boundaries, opening new business opportunities and reaching unimaginable markets [2]. CONS: being an open and accessible platform, the metaverse can be easily accessed by the competitors [13]
E-commerce and omnichannel	PROS: Better visibility through the metaverse allows firms to optimize the logistics reducing the environmental impact [43] CONS: integrate new flows induced by metaverse activities, which are customer-focused rather than environmental-focused [18]	PROS: Use e-commerce and omnichannel to reach remote regions that will not take advantage from metaverse [65] CONS: lower access to traditional e-commerce and omnichannel solutions due to deliveries for goods sold on metaverse [45]	PROS: More e-commerce and omnichannel solutions will be used when selling physical goods on the metaverse [42]. CONS: Avatar economy can cannibalize the e-commerce leading to omnichannel investments to become sunk costs [45]	PROS: e-commerce and omni-channel will continue to exist and excess of capacity will be used in favor of minorities and fragile classes [65] CONS: the core business generated through e-commerce and omnichannel will not be lost but it will be rather integrated with new opportunities offered by metaverse technology [41]
Stores and physical distribution	PROS: using metaverse, customers will travel less to visit stores, abating the CO2 emissions. Moreover, the metaverse allows the physical store to display virtual goods, which implies a lower amount of resource consumption wasted to display a wide range of physical goods [72]. CONS: More energy consumed by the metaverse [24]	PROS: people have better visibility of the stores’ availability, try and verify goods virtually before purchasing them physically, and get 24/7/365 services given the non-stop functionality of the metaverse [31] CONS: Lower amount of jobs required in stores, with people being either fired or reallocated. Weak infrastructure will not make people able to access the metaverse [41]. Physical and mental health issues for users missing physical interactions. Non-stop availability at the store [32]	PROS: Less inventory and less space needed in stores thanks to the VR technologies supporting the metaverse [18]. CONS: Investments to integrate the metaverse in the physical spaces [44]	PROS: The transformation of the physical stores in meta stores will offer new business opportunities and open new markets, leading to increasing business opportunities [2]. CONS: Stakeholders and shareholders are informed that a proper worker policy will be adopted, with no negative implications for the staff [39]. There is a need for a plan to reallocate, reintegrate, and reeducate workers according to new skills and competences needed in the metaverse [36]

. Considering an environmental, social, and governance (ESG) perspective enables a more comprehensive approach to planning the transition to Industry 5.0 in the context of the metaverse.

3.1. Production Planning

Production planning becomes more complex when implementing metaverse technology for two reasons. On the one hand, some physical goods will not be made anymore, since they will be substituted by digital goods [39]. On the other hand, the orders for physical goods can directly come from the metaverse due to the interactions among avatars. Therefore, the operations manager must handle an additional source of demand input [32]. The VR and digital twin technologies can substantially help to verify the feasibility of production planning [73] while leading to better usage of raw materials and resources [74]. In fact, since consumers have better information about goods, they can make orders comprised only of what they need, leading to a shift from pull to push production systems. However, the integration of traditional production planning with metaplanning might require atypical investments and modifications in production systems [68]. Considering that the metaverse favors the development of pull production systems, the usage of resources and wastes will be minimized since the processes will be activated on demand [72]. At the same time, the integration between digital and physical facilities may require an atypical usage of energy, leading to additional CO₂ emissions [38]. While the presence of digital goods engages consumers with new and emerging needs to satisfy, part of the physical market may be unsatisfied due to more appealing business opportunities offered by digital goods [39]. When implementing the metaverse, firms should be able to communicate to the public the capacity to develop the digital business model without disturbing the traditional business model, which links to firm value and reputation [26].

3.2. Procurement

Procurement is an important step in the supply chain, in which the raw materials required for production are identified and purchased. The metaverse allows this process to be improved and made more efficient by enabling firms to carry out a more rigorous selection of suppliers [32]. System transparency enables a more effective evaluation of suppliers and, consequently, a more effective selection process [36]. Blockchain transactions enable better management of reconciliation processes, as well as a reduction in transaction costs [40]. Since smart contracts are activated by transferring cryptocurrencies and NFTs, some suppliers using traditional payment systems may be reluctant to use a virtual payment system, with the relative risk of losing important suppliers [46]. At the same time, activating smart payments allows suppliers to perform conforming deliveries and reduce waste, although transactions with blockchain are energy consuming [50]. However, thanks to the oracles located over the territory, transparency and fairness are ensured, leading to higher social implications [42]. Shareholders and stakeholders exploit these outcomes to increase the brand reputation, sponsoring trustful and fair business models. Being active 24/7/365, the metaverse can place pressure on suppliers due to continuous controls and monitoring [43]. Furthermore, firms can employ special procurement strategies with some suppliers due to factors, such as the length of the relationships, people involved, and joint investments. These exceptions are difficult to be implemented on a smart contract, leading to a loss of relational value.

3.3. Internal and External Logistics

Logistics covers the organization of internal and external flows of material and information, and the metaverse can contribute to operating costs and distribution planning. Over the whole supply chain, the metaverse offers opportunities for 3D representations of the production, distribution, and commercialization of goods, which are dynamically and continuously optimized and updated [73]. Since the blockchain controls the entire distribution system, the logistics operators are constantly monitored by the oracles and paid according to their real performance, generating pressure surrounding how to manage the unexpectedness of logistics [25]. Considering that the metaverse allows physical goods to be displayed in a virtual world, as well as some physical goods to be substituted by digital goods, there will be a lower request for logistics services, with a positive impact on the environment [55]. However, since the metaverse places people and stakeholders from all over the world in contact, the logistics will probably cover longer distances. On the one hand, the lower importance of logistics will render people free to instantaneously buy digital goods on the metaverse, increasing their level of satisfaction and the associated social outcomes [6]. Nonetheless, the decreased demand for logistics services directly implies the social issue of lowering the number of jobs in the field. Finally, the governance can declare firms’ capacity to be on the spot by serving traditional demand, as well as by launching new projects linked to digital goods. At the same time, new investments are needed in terms of increased reallocation of logistics capacity, as well as the requalification of workers [26].

3.4. Quality Management

The metaverse pushes firms, inspired by their principles, to adopt total quality management. On the one hand, the metaverse allows quality to be verified and certified through a combination of technologies, such as blockchain, VR, e-skin, and avatars [36]. Given a chance to replicate in a virtual space those practices adopted in real environments, the metaverse ensures that quality can be continuously monitored and controlled, reducing all possible types of defects and waste [18]. These objectives are in line with lean management principles. More specifically, the metaverse makes real objectives, such as transparency, traceability, fairness, originality, honesty, and visibility [3]. Considering the strict, quality-based rules applied in some instances, the perpetual quality checks ensured by the metaverse can become problematic in cases of challenges and disruptions when firms and stakeholders must manage exceptions [32]. Hence, the blockchain and the related smart contracts should be flexible enough to guarantee SC flows and fluidity, even in turbulent instances [40]. While the aforementioned benefits grant value to society at large, the high-tech tools (e.g., smart glasses and visors) to ensure living in the metaverse can be highly expensive and not easily affordable by everyone. Thanks to the lean management principles inspiring waste reduction and the elimination of errors, the metaverse can certainly aim to achieve environmental performance [26]. These elements can be communicated by the governance to the stakeholders and the shareholders to enhance trust and reputation. However, the metaverse for total quality management should be parsimoniously employed since some inappropriate practices being adopted by some stakeholders or SC parties can emerge and disrupt business models and supply chains with scandals and dishonor.

3.5. Inventory Management

One of the main advantages to be achieved through the metaverse is the optimization of inventory. From an economic point of view, the use of VR technologies allows the metaverse to observe [72] and then lower inventories, minimizing both capital absorption and holding costs. Inventory optimization is ensured through the full visibility of inventory available over the whole supply chain, with the consequence of high inventory turnover and reduced risks of overstock. At the same time, the supply chain requires agile logistics and production systems since the metaverse can generate orders 24/7/365, and just-in-time approaches might be challenging to implement [43].

From an environmental perspective, considering that consumers can better shape, appreciate, and select the goods they wish to purchase, inventory managers do not need to keep high inventory in stock while simply focusing on what consumers might want. Hence, the waste of resources will be minimized [37]. However, transforming physical goods into virtual goods to make them visible requires the reengineering of the entire system, leading to higher energy consumption and heat, which have a negative impact on climate change and the environment [68].

When implementing the metaverse, social performance will increase, since people can easily find goods on the platform or shape them using 3D printing applications. This increases consumer utility and the economic value to be extracted from new markets [45]. At the same time, the requests for operators to manage the inventory will be minimal, leading to some job losses and social issues, while new competencies and emerging skills will require ad-hoc training to manage both physical and virtual inventories [71]. Similarly, the great opportunities offered by the metaverse can distract managers and professionals from serving remote and fragile places in which the metaverse cannot work due to the missing infrastructure (e.g., 6G connection). Hence, firms should communicate that these markets will continue to be served for many years to protect and assist fragile and vulnerable people living in remote regions [41]. In fact, preserving such opportunities will provide the chance for competitors to garner market advantages and competitive positions. Along with these improvements in firms’ reputations, announcing that the savings obtained from the optimized inventory will be reinvested in such social activities will surely increase shareholder interest in investing in the metaverse. At the same time, both the shareholders and the stakeholders should identify a new plan for reallocating the resources (e.g., warehouses), which will no longer be used after the implementation of the metaverse, but which are still in good condition and offer great functionality [61].

3.6. Supply Chain Network

The metaverse will definitely disrupt supply chains and related networks for two motivations. On the one hand, the transactions will be managed within the platform and will be governed by the blockchain [42]. Therefore, several intermediaries within the supply chain will simply disappear. On the other hand, new relationships will be built with other suppliers, such as companies that own the platforms, avatar designers, Internet servers, etc. [32] Therefore, the current supply chains will be redesigned and engineered in meta supply chains, which grant visibility, transparency, and trust to all parties to constantly optimize SC flows [34]. These features allow supply chain leaders to fairly and precisely evaluate suppliers’ green attitudes and, thus, select only true green suppliers to be included in the supply chain network. However, not all suppliers will have the capacity to work on the metaverse. For example, using blockchain to manage transactions can be highly disruptive [40]. Hence, environmental achievements might be compromised by the current set of skills acquired and competencies available. From a social perspective, a meta supply chain allows people to pursue trusted and efficient transactions thanks to diffused visibility. At the same time, supply chain networks can be extended only to regions and countries in which the available infrastructure supports technology augmenting territorial discrimination and disparities [41]. Finally, shareholders will surely appreciate the metaverse’s capacity to create wide networks not reachable by traditional tools and practices (e.g., e-commerce). However, this change will also increase the risk of being exposed to new and atypical competitors [13].

3.7. E-commerce and Omnichannel

Although the pandemic has accelerated the need for e-commerce and omnichannel solutions, the metaverse will increase the demand for such solutions even more. This wave will entail some economic tradeoffs for economic performance. Firms thinking about implementing the metaverse will sell physical goods in an immersive environment, which requires great support with several solutions for deliveries [13]. At the same time, selling through the metaverse might cannibalize sales conducted through e-commerce and traditional online platforms [45]. This trade off puts firms in very challenging situations, and it is thought that the metaverse will also activate an avatar economy, which can be extremely appealing in some sectors, such as fashion and service [6]. Considering these trade-offs and the visibility throughout the supply chain, the metaverse will allow logistics networks to be optimized, including the various omnichannel and reverse omnichannel solutions, thereby reducing emissions linked to transportation, among other impacts [43]. However, especially regarding the current platforms for the metaverse, major developers’ efforts are devoted to defining new and emerging needs, with an orientation toward customers’ attention and attraction rather than toward the minimization of environmental impacts. The same applies to social performance. While the metaverse will allow firms to enter into direct contact with consumers in other places of the world in an immersive environment, and through the interaction of avatars, the omnichannel solutions to be organized from very far places and remote regions will make the metaverse accessible only virtually, and not in reality [41]. Therefore, shareholders should be assured that firms can manage all markets (physical, online, and virtual markets) in an effective way without sacrificing the satisfaction of minorities and fragile people while always performing all business facets.

3.8. Stores and Physical Distribution

The metaverse will bring efficiency to the management of stores and any form of physical distribution. In fact, since most of the selling activities will shift inside the metaverse, the spaces and, in general, the resources needed inside stores will be much lower than the current configurations. At the same time, the space, although reduced, should be integrated with new technologies linked to the metaverse, such as VR, augmented reality, and blockchain [73]. Considering that consumers will travel less to visit physical stores, emissions will be reduced, and congestion will be minimized [66]. At the same time, the energy and the efforts required to run the metaverse can overcome these benefits, which can be environmentally effective only if the energy spent in the virtual environment comes from renewable resources rather than natural resources. From a social point of view, the stores will always be open through access to the metaverse, offering a great and continuous range of services and functionalities [43]. However, using the metaverse can lead to people being exploited due to 24/7/365 platform access, the acquisition of new skills and competencies that can only be spent inside the metaverse, as well as the connection with the physical distribution when the metaverse links to the sale of material goods. The transformation of traditional stores into meta stores will give shareholders a chance to substantially boost the business model by reaching new markets and regions, although the insurance of social performance will be properly communicated in terms of social reallocation, reintegration, and reeducation.

4. Measuring the Impact of the Metaverse through the SDGs

Beyond analyzing the metaverse implications for economic, environmental, and social performance, as well as for governance and the most likely influenced business strategies, the analysis of the sustainability of the metaverse cannot be complete without also analyzing and measuring its impact with respect to the SDGs. The SDGs, in fact, summarize 17 goals to achieve a more sustainable future and planet for everyone. These goals have been fixed by United Nations General Assembly (UNGA) in September 2015 after an extensive process of consultations and negotiations. Considering that the SDGs have a deadline of 2030, progress towards their achievement is monitored by the United Nations through various indicators and reporting mechanisms, including the sustainability from a microscale analysis (e.g., energy consumption) to a macroscale analysis (e.g., hunger in the world). The SDGs are most likely directed to countries since some of the global challenges—such as climate change, gender equality, peace, and justice—can be addressed and managed at a very high level in society. However, firms, institutions, people, and stakeholders, in general, can use the SDGs to demonstrate the contribution they offer at a global level.

Therefore, this section proposes an SDG evaluation framework to analyze the sustainability of the metaverse for an effective transition to Industry 5.0. By using the metaverse, companies can collaborate on a global scale, reduce their carbon footprint, and streamline their production processes. Industry 5.0, through the metaverse, can revolutionize the manufacturing industry by fostering creativity, innovation, and sustainability. Overall, the metaverse and Industry 5.0 can be seen as complementary approaches that can work together to promote sustainable development and support the attainment of multiple SDGs. By leveraging the potential of virtual worlds and advanced technologies, these approaches can help create a more sustainable and equitable future for all. Hereby, we define and summarize in

Table 3. Measuring the impact of metaverse through SDGs.

SDGs		Metaverse’s Objectives	Actions to Be Taken through the Metaverse
	End poverty in all its forms everywhere	Use the metaverse to make people, firms, policymakers, and stakeholders aware of the poverty conditions in some countries.	- implement ad hoc plans for sustain poor and vulnerable people by discovering the real living conditions through the metaverse - realize the real needs of people in a poverty state, the access to basic services, and financial means. - use the metaverse to better estimate and simulate the social conditions after a disaster or a shock - use the metaverse to get the consensus on the implementation of policy frameworks to help poor populations
	End hunger, achieve food security and improved nutrition, and promote sustainable agriculture	Use the metaverse to verify the practices of sustainable agriculture as well as the practices used to achieve food security, improve the level of nutrition to the target population, and end of hunger in remote regions and poor countries.	- use VR applications in the metaverse to ensure that people have proper access to sufficient foods and nutrition - simulate supply chains in the metaverse to reach people in all remote regions independent of their social status and needs - identify supporting practices and resources for family farmers, pastoralists, and fishers. - collect consensus to make a resilient agriculture, which can adapt to climate change, extreme weather, flooding, and other disasters and that progressively improve land and soil quality. - organize events on the metaverse to inspire the protection of species, cultivated plants, animals, resources through technology developments, and investments in agriculture.
	Ensure healthy lives and promote wellbeing for all at all ages	Activate the metaverse to adopt practices for promoting the health of the society at large by protecting, preventing, and caring any physical and mental diseases.	- use the metaverse to connect to fragile people to decrease some ratios, such as the maternal mortality rate - identify critical situation for decreasing the end preventable deaths of newborns and children - educate people to decrease the transmission of diseases, such as AIDS, malaria, and tuberculosis, and avoid abuse of substances - activate practices to decrease the health protection and avoid any type of accident, including the exposure to hazardous chemicals and waste - make use of the metaverse to verify the needs for vaccines and medicines
	Ensure inclusive and equitable quality education and promote lifelong learning opportunities for all	Make sure that the metaverse is an educational virtual and highly accessible environment, which offers opportunities for learning and developing skills and sense of global citizenship.	- develop high level and equitable education on the metaverse - ensure that education is accessible, also financially - exploit the metaverse as a virtual environment for increasing skills and vocations for entrepreneurship, especially for vulnerable classes, such as disables - make use of metaverse to promote social sustainable development through inclusion, human rights, culture of peace and non-violence, and practices for good citizenships
	Achieve gender equality and empower all women and girls	Use the metaverse to promote the gender equality by defeating any form of violence and abuse that restricts the woman’s rights as well as the protection of leadership positions that woman can cover in all spheres.	- defeat any form of discrimination and violence through the metaverse, also among avatars - report the negative consequences of harmful practices, such as mutilation and forced marriage - promote the protection of household, infrastructure, and public sector as well as the protection of sexual and procreative health - ensure that woman cover leadership positions in economic, public, and political life
	Ensure availability and sustainable management of water and sanitation for all	Map the sources of water through the metaverse and its usages to verify the practices to implement for a better water management and improvement of accessibility, quality, and efficiency.	- use the metaverse to better estimate the needs for water all over the world. - detect and take care of vulnerable subjects who need adequate and sanitized water - map the wastewater through the metaverse and identify ad hoc intervention to guarantee quality of water by also removing chemicals and mitigating pollution - use the metaverse to redesign the supply chains for removing issues of freshwater waste and contamination - adopt VR and Digital Twins to simulate the changes in the ecosystem when implementing practices to improve water and sanitation, as well as treatments and sustainable practices by engaging the community at all levels
	Ensure access to affordable, reliable, sustainable, and modern energy for all	Use the metaverse to identify the best sources of energy and simulate execution plans on the virtual environment.	- minimize the consumption of energy when using metaverse - identify the areas in which energy is scarce and make infrastructural changes if necessary to make energy affordable - simulate the best combination of natural resources and renewable resources through metaverse to produce energy - organize meeting and events on the metaverse to sensibilize governments and stakeholders in supporting the creation of new and renewable energy sources while favoring cooperation and exchanges of expertise
	Promote sustained, inclusive and sustainable economic growth, full and productive employment, and decent work for all	The metaverse seeks to derive ad hoc plans to achieve economic growth by involving all possible parties in setting up effective activities. The transparency obtainable from the metaverse guarantees decent work conditions and treatments.	- model a business venue through the metaverse to sponsor the economic growth, especially in developing countries - favor the investments in metaverse to guarantee achievements in terms of innovation, diversification, technological upgrade, and a focus on high-value added activities and culture - make the metaverse a place for offering financial services to sponsor the creation of production activities, decent jobs, and entrepreneurial activities - monitor the overall production and consumption through the metaverse while supporting disables and vulnerable people - use the metaverse to make transparent all working conditions and treatments to guarantee gender equality and equal value - sponsor ad hoc education and training aiming at economic growth while prohibiting child labor and migrant working
	Build resilient infrastructure, promote inclusive and sustainable industrialization, and foster innovation	Exploit AI, VR, and Digital Twins of metaverse to identify the best infrastructure to be created as well as the most innovative and resilient solutions to adopt.	- promote the construction of ad hoc infrastructure, especially in developing countries, to make the metaverse work. - identify the new jobs that will be created with the metaverse, and the industrialization level required to achieve sustainability - offer financial services to support the creation, the upgrade, and the maintenance of the infrastructure - sponsor product and process innovation for industry and infrastructure - use the metaverse to simulate the creation of resilient infrastructure, especially in developing countries
	Reduce inequality within and among countries	Exploit the metaverse potential to mitigate any form of inequalities and make them evident through the use of digital technologies within the virtual environment.	- make use of the metaverse to map the incomes and the related growths of a certain region and distribute value accordingly - transparency in the metaverse helps in achieving social and political inclusion for people coming from all social statuses - apply smart payments through blockchain and guarantee equality in wages, taxes, social protection, and subsidies - implement smart applications to develop new regulations and update old ones - create dashboards in the metaverse to demonstrate the real equality and justice over the society - identify the best investments to be made through the metaverse to safeguard order, regularity, responsibility, migration, and treatments, especially in developing countries
	Make cities and human settlements inclusive, safe, resilient and sustainable	Transform physical cities in virtual cities to monitor and improve all possible situations and conditions for improving people’s life and protecting the environment.	- make buildings virtual in the metaverse to verify how to make them available for the society at large - simulate the logistics of cities in the metaverse through Digital Twins as well as the urbanization to improve mobility and accessibility - adopt metaverse solution to protect and safeguard the cities’ heritage and culture - use the metaverse to create immersive experience for visiting cities and attractions - exploit the metaverse potential to simulate cities’ situation and then reduce the number of deaths, accidents, and risky situation as well as protect vulnerable people and disables - optimize urban waste management through the metaverse - adjust the city tax level according to the people’s contributions to cities’ development and preservation for future generation
	Ensure sustainable consumption and production patterns	Make physical consumption and production virtual on the metaverse to continuously monitor processes and flows and optimize social, environmental, and economic performance along with all operations.	- exploit the metaverse potential to create efficiency in production and consumption by running simulation through VR and Digital Twins to harmonize all eco-systems’ parties - make transactions and verify goods and services using the blockchain - exploit the metaverse to identify sustainable production and consumption opportunities led by shifting from using natural resources to using renewable resources - replicate supply chains on the metaverse to remove not needed layers and intermediaries while directly reaching the end-users - implement Life Cycle Assessment inside the metaverse to define the best sustainable strategy to adopt - sponsor the adoption of Circular Economy practices (reuse, recycling, refurbish) through the metaverse, also by also running educational programs and training - implement learning algorithms and AI systems to generate sustainable reports and identify areas of impact
	Take urgent action to combat climate change and its impacts	The metaverse allows one to better perceive the ecosystem changes and be aware of the risks for the humanity, which lead to better definition of real actions and contributions offered by involved parties.	- create a virtual map through the metaverse for monitoring the state of the ecosystem in response to the climate change and defining a set of resilient actions - use the metaverse to monitor the real contribution to climate changes offered by countries, companies, institutions, and stakeholders. - organize meeting in the metaverse to include the climate change inside the countries’ policies and regulation - the metaverse allows one to be better sensitized to the climate change issues by perceiving the reality of ecosystems damages and changes as well as the associated risks - define a set of training and educational programs in the metaverse, in which avatars can get in touch with highly influential parties - promote actions for climate change by also considering social spheres, which are always evident in metaverse virtual spaces
	Conserve and sustainably use the oceans, seas, and marine resources for sustainable development	Exploit the metaverse potential to discover the real conditions of life below the water and constantly monitor actions and changes to adopt timely and adequate corrective actions.	- visualize the real state of the life below the water using the metaverse, including pollution of all kinds - control how the maritime and coast ecosystem are really treated and managed through the metaverse, to define effective resilient practices and restoration policies - define the level of acidification through the digital technologies of the metaverse and take ad hoc corrective actions using science-based management approaches. The same applies for other objectives, such as uncontrolled harvesting, illegal fishing, as well as unreported, unregulated, and destructive fishing practices. - use the blockchain to better define the subsidies to be granted, according to the real impact on the maritime and the coast ecosystem - organize training and education activities to sponsor the sustainable development of fisheries, aquaculture, and tourism inside the metaverse - use the metaverse to discover the latest technologies available, even in other frameworks, to sustain the life below the water.
	Protect, restore and promote sustainable use of terrestrial ecosystems, sustainably manage forests, combat desertification, halt and reverse land degradation, and halt biodiversity loss	Virtualize the life on land through the metaverse to recognize the best practices and actions to undertake for a proper preservation, protection, and improvement.	- virtualize terrestrial and freshwater ecosystems and the related services on the metaverse to map the fields that require protection and intervention - simulate the best deforestation and forestation initiatives, restoring the degraded forest and increasing the afforestation - organize meetings and events on the metaverse with experts to limit desertification and protect mountains along with the natural habitats for preventing species extinction - use the metaverse to monitor lands and promptly discover illegal and invasive activities or actions - organize fund raising on the metaverse to promote actions to improve life on land, align to regulation and international targets, and incentivize all interested parties
	Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels	Use the metaverse to push people, institutions, and stakeholders to create a peaceful society inspired by sentiments of justice and equity.	- prevent any form of violence and deaths by AI and VR available within the metaverse - simulate plans and actions to check for social justice - adopt ad hoc programs to prevent criminal activities and actions, including corruption and bribery - make the financial flows trustable and transparent using the blockchain and NFT - make virtual spaces on the metaverse to allow everyone, especially from developing countries, to contribute and actively participate - ensure that identity and privacy are respected and protected when lying in virtual spaces
	Strengthen the means of implementation and revitalize the Global Partnership for Sustainable Development	Use the metaverse to leverage the Global Partnership for Sustainable Development and set new and timely targets.	- make use of the metaverse as a booster for resource mobility and for engaging international organisms in providing help and assistance to developing countries - organize found raising events to financially support the economic growth and cover the debts - develop initiatives inside the metaverse to support international collaboration and knowledge creation in science, technology, and innovation - disseminate the knowledge through the metaverse to show the environmental, social, and economic effectiveness technologies - promote the creation of rules and regulation for people from different countries when using the metaverse to promote equity - facilitate the market transparency and accessibility, while reaching sustainable developments and stability -promote the formation of partnerships and engage them through NFTs to create equalities.

how the metaverse can be helpful in achieving some of the fixed objectives and define some real actions to be taken by countries, as well as by companies, institutions, policymakers, and all involved stakeholders.

SDG1—End poverty in all of its forms everywhere. Metaverse technology allows one to recreate the physical environment within the virtual space. Therefore, the real conditions of poor people can be revealed, such that policymakers, governments, and stakeholders can be aware of the poverty conditions existing in some countries. Accordingly, the metaverse can be extremely helpful in planning and engineering the required aids for poor and vulnerable people by discovering the real poverty state, along with access to basic services and financial means. The technologies available in the metaverse—such as VR, digital twins, and augmented reality—allow one to properly simulate the social conditions after a disaster or a shock and avoid delays and the waste of resources.

SDG2—End hunger, achieve food security and improved nutrition, and promote sustainable agriculture. The metaverse can be used to verify the practices adopted by firms in agriculture, as well as the subsidies and other initiatives sponsored by countries. Such practices should aim to achieve food safety and security, allow for the full traceability of food and nutrition, and better plan food distribution in remote and poor regions to mitigate any forms of discrimination and hunger.

SDG3—Ensure healthy lives and promote wellbeing for all at all ages. The metaverse is potentially a very dangerous technology for health since people will spend time in a virtual environment in which social interactions are only virtual and activities for health are minimized. Walking to work or visiting a place via bicycle tour help to ensure that people are physically and mentally healthy compared to being stuck in a certain place with visors and being transformed into an avatar on the metaverse. While the types of social interaction in the metaverse can be unique and very broad, all side effects must be evaluated to achieve SDG3. Therefore, metaverse development and diffusion should be managed by ensuring the promotion of social health and protecting, preventing, and caring for any physical and mental diseases.

SDG4—Ensure inclusive and equitable quality education and promote lifelong learning opportunities for all. The metaverse offers great opportunities to leverage the value and quality of educational programs by providing immersive experiences to participants. The metaverse ensures great access and unimaginable opportunities to learn and develop skills and competencies that are not available in remote regions and developing countries. In this sense, the metaverse allows for the creation of high-level backgrounds to people all over the world.

SDG5—Achieve gender equality and empower all women and girls. The metaverse should be planned as a platform to promote gender equality. This target can be achieved by defeating any form of violence and abuse that restricts women’s rights and disrupts their lives. Sensibilization in the metaverse is guaranteed by the immersive experience the technology offers by simulating domestic violence, racist attitudes, and discriminatory behaviors. The metaverse can better clarify the negative consequences of such actions, which are highly difficult to identify and recognize. Furthermore, the metaverse should be designed to sponsor the protection of leadership positions that women can attain in all spheres of political and economic domains.

SDG6—Ensure the availability and sustainable management of water and sanitation for all. The metaverse can transform the physical world into a virtual world, with the advantage of being able to realize the actual shortage of water occurring all over the world. Consequently, the metaverse increases the awareness of the water needs of people in remote regions and developing countries and provides solutions to better connect sources of water with the demand for water, with the result of increasing water quality and the efficiency of its distribution. Furthermore, it highlights the interventions required in various areas to make water accessible.

SDG7—Ensure access to affordable, reliable, sustainable, and modern energy for all. With regard to water, the metaverse can optimize the production and distribution of energy by virtualizing physical spaces. Therefore, the metaverse allows one to identify the best sources of energy and simulate execution plans to make the energy available for all and affordable at a fair price. The combination of all available technologies (e.g., VR, augmented reality, and blockchain) renders the metaverse able to identify the ideal portfolio of energy sources for poor and vulnerable people.

SDG8—Promote sustained, inclusive, and sustainable economic growth, full and productive employment, and decent work for all. The metaverse will be disruptive for all business models and, for certain, will imply the closure of some businesses (e.g., some tiers in the supply chain will simply disappear) while sponsoring other types of businesses (e.g., virtual consulting) and new job positions (e.g., meta designers). Unlike other digital and non-digital technologies, the metaverse replicates the physical world in a virtual environment, in which everyone can gain access and verify working conditions and treatments. These features make the metaverse highly socially oriented since it guarantees, among other targets, the respect of individuals, adequate working conditions, respect of working rights, and the mitigation of child labor and exploitation.

SDG9—Build resilient infrastructure, promote inclusive and sustainable industrialization, and foster innovation. One advantage of virtualizing the physical objects in the metaverse links to the chance to exploit the potential of technologies, such as AI, VR and digital twins, to improve and manage the infrastructure. The combination of these technologies allows one to either simulate the construction of new buildings for countries and regions that need a proper urbanization or to fully analyze the existing infrastructure to adequately renovate it through the latest solutions available and thereby increase related resilience.

SDG10—Reduce inequality within and among countries. Since the metaverse reveals the conditions in physical spaces, it can easily recognize and identify any form of inequality and combine the various digital technologies for prompt mitigation. Such an opportunity is associated with various social inequalities, for which actions to be undertaken are difficult to adopt. Examples of inequalities that are potentially withdrawable with the metaverse link to incomes, inclusion, payments, justice, migration, and treatments.

SDG11—Make cities and human settlements inclusive, safe, resilient, and sustainable. Metaverse technology allows one to transform physical cities into virtual cities. Consequently, all flows, activities, ways of behaving, and people’s lives can be continuously monitored and controlled. This implies the avoidance of dangerous situations in a city (e.g., aggressions toward fragile individuals, improper disposal of garbage, and inadequate use of e-scooters) while improving both the people’s lives and the city’s efficiency.

SDG12—Ensure sustainable consumption and production patterns. By exploiting combinations of digital technologies—such as digital twins, VR, augmented reality, and blockchain—the metaverse virtualizes any form of production and consumption activity, allowing for significant improvements in terms of efficiency and effectiveness on cost, time, quality, waste reduction, and the preservation of working conditions (e.g., no danger to people’s health, adequate treatment of animals, and respect of the fauna and the entire eco-system).

SDG13—Take urgent action to combat climate change and its impacts. Thanks to the capacity to virtualize the physical world, the metaverse can make people, institutions, policymakers, and, in general, stakeholders aware of the real changes occurring in the ecosystem (e.g., melting glaciers) and simulate the possible consequences for future generations, including fauna and flora.

SDG14—Conserve and sustainably use the oceans, seas, and marine resources for sustainable development. Beyond making physical objects virtual, the metaverse can also be used to monitor life below the water and make it virtual. This would imply the constant monitoring of seas, oceans, and rivers, the identification of proper and timely corrective actions and policy, and the incremental societal awareness of the importance of protecting both the maritime and the coastal ecosystem.

SDG15—Protect, restore, and promote the sustainable use of terrestrial ecosystems, sustainably managed forests, combat desertification, and halt and reverse land degradation and biodiversity loss. Similar to life below the water, the metaverse can render the terrestrial ecosystems virtual, enhancing the capacity to protect terrestrial and freshwater ecosystems and the related life of people and animals to preserve future generations and species. Furthermore, the combination of all digital technologies allows one to simulate the effectiveness of some activities (e.g., deforestation of degraded areas and afforestation of new regions).

SDG16—Promote peaceful and inclusive societies for sustainable development, provide access to justice for all, and build effective, accountable, and inclusive institutions at all levels. The metaverse will be the best place to organize meetings and events for sensitizing all on the creation of a society inspired by principles of justice and equity while combating violence, corruption, and any form of criminal activities. The metaverse achieves these targets by combining digital technologies with the blockchain, which guarantees transparent actions, behaviors, and transactions.

SDG17—Strengthen the means of implementation and revitalize the Global Partnership for Sustainable Development. Considering that the metaverse is accessible 24/7/365 and allows one to reach virtual spaces and places around the world and meet with unimaginable people and subjects (e.g., see the singers in Fortnight), the virtual spaces available in the metaverse sponsor global partnerships around the world by providing support, assistance, and collaboration. Initiatives can span from simple fundraising to knowledge and science creation and diffusion driven by sustainable development.

5. Conclusions and Future Research Agenda

This study seeks to analyze the sustainability of metaverse technology from three perspectives: a triple bottom-line perspective, an ESG perspective, and an SDG perspective. The comprehensive approach taken to analyze the sustainability of the metaverse is driven by the recent advancement of Industry 5.0 technology, which places the human at the center of processes, leveraging human creativity and ingenuity alongside advanced technologies along with respecting human rights and individual dignity as well as promoting equitable and inclusive workplaces. Therefore, it seeks to provide a broad analysis of sustainability linked to the metaverse, with the target of driving people, firms, policymakers, supply chains, and stakeholders in general through the adoption and management of the metaverse employing a responsible digitalization path to guarantee the Industry 5.0 transition. As highlighted in the literature, several negative consequences and side effects materialize when under-estimating the possible impact of digital technology adoption and without making a responsible digital transformation. For example, blockchain technology allows one to identify and then mitigate the phenomenon of fake and counterfeit goods. However, blockchain uses an enormous amount of energy, which makes it environmentally unfriendly. With different effects, the adoption of AI technology improves and attaches the decision-making process in a proactive way, even though the AI requires firms to acquire information from ecosystem seeds, resulting in additional costs due to information dispersion and the need for validation. Similarly, robotics, 3D printing, and digital twins allow firms to digitalize production facilities and create efficiency. Unfortunately, they can also result in job losses and requalification. IoT can reveal information about the ecosystem continuously and transparently. However, it may not be socially sustainable due to data security and privacy protection issues.

Considering the aforementioned experiences with digital technology adoption, this study sheds light on both the positive and negative implications of adopting metaverse technology in the near future. After introducing metaverse technology, a triple bottom-line analysis is conducted by evaluating the economic, the environmental, and the social impact of the metaverse. This analysis provides a general framework for future research and practitioners in evaluating the adoption of the metaverse by highlighting the emerging trade offs. Future research should be developed to verify how these tradeoffs can be solved and to propose viable solutions for society at large. Following this, the research moves to the ESG analysis by addressing the most important business strategies that will be influenced by the metaverse and highlighting the positive and negative aspects in terms of environmental, social, and governance parameters. The presence of a dual dimensional analysis, that is, business strategies and ESG, allows one to better understand the implications of the metaverse for both functional and corporate strategies and then define a responsible digitalization path that considers all emerging pros and cons. Finally, the research bridges the fields of SDGs and the metaverse to push decisionmakers to reflect on the UN targets when implementing and managing the metaverse. We highlight the thorough potential that the metaverse can grant by addressing sustainability issues through the high-level objectives described in the SDGs. Beyond providing a connection, the research suggests the objectives and the real actions to be executed on the metaverse to reach SDGs. Future research should highlight how metaverse applications are able to consider SDG targets and achieve them continuously to render the adoption of the metaverse a responsible digital transformation to finally drive the transition to Industry 5.0.

This study is not free of limitations, which are identified below to inspire researchers, practitioners, and policymakers to further investigate this field, also providing tools to responsibly implement the metaverse. Future research can use the frameworks suggested herein to verify if the current applications of the metaverse are responsibly applied and are considering sustainable goals. Corrective actions should be taken to avoid issues that emerge when implementing other digital technologies. Beyond examining the current development and business cases, future research can verify how stakeholders are preparing for the metaverse and confirm that the undertaken path aligns with the responsible digitalization path, to take the proper direction toward the Industry 5.0 transition. Machine learning algorithms and simulation tools should be designed and run to estimate the possible implications of the metaverse by taking a probabilistic approach. Currently, empirical studies can be undertaken to determine how the various stakeholders think about the changes linked to metaverse technology and include them in an ideal implementation path. Considering that the metaverse is in the early stages of development and adoption, it is not too late to implement the metaverse in a responsible way.