Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Who Wins When ESG Investing Principles and Crypto Investments Collide? (2/2)

CryptocurrencyJul 11, 2021 09:00AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
Who Wins When ESG Investing Principles and Crypto Investments Collide? (2/2)

Within weeks of Musk’s tweet, Saylor and Musk tried to take steps to resolve Bitcoin’s environmental issues. The pair organized and launched a renewable BTC mining initiative in the U.S. called the Bitcoin Mining Council. Saylor subsequently tweeted a list of the largest Bitcoin mining operations invited to join that inaugural meeting.

Saylor’s tweet referenced the intent to “…pursue industry ESG goals…”. In fact, the formation of the Bitcoin Mining Council fulfills the PRI’s principles three through six. This represents a good example of how collaborative ingenuity can bridge the gap between ESGs and crypto investments.

There are more positive examples to examine that can suggest mutually beneficial synergies between investors seeking a balance between cryptocurrencies and environmental, social, governance (ESG) factors.

Environmental Impact

To help address its energy consumption and sustainability issues, the digital asset industry proactively launched its own eco-friendly initiative. The Energy Web, the Alliance for Innovative Regulation, and RMI launched the Crypto Climate Accord. The Accord is a private sector-led initiative for the entire crypto community. It was inspired by the Paris Climate Agreement and focuses on reducing all carbon produced by the cryptocurrency industry to net-zero emissions by 2030.

Crypto Climate Accord Signatories comprises 45 companies and individuals spanning the cryptocurrency, tech, finance, non-governmental organizations, energy, and climate sectors. These supporters publicly commit to achieving emissions targets for all of their respective crypto-related operations using electricity.

The Crypto Climate Accord is also supported by the UNFCCC Climate Champions. This proactive initiative is a bold step toward reconciling pro-environmental investment principles with crypto activities, even though crypto’s enviro-impact is lower than the finance industry, and traditional gold mining.

That’s according to the Ark Investment website when measured by electricity costs alone, Bitcoin is much more efficient than traditional banking and gold mining on a global scale. Traditional banking emits 1,368 Megatonnes (Mtoe) of carbon per year and gold mining emits 144 Mtoe. Bitcoin emits 61 million Mtoe, less than 5% and 45% of traditional banking and gold mining, respectively.

Note: Carbon Dioxide Equivalent (CO2e)

Source: ARK Investment Management LLC, 2021. Data Source: Source: Hass McCook (@FriarHass), https://bitcoinmagazine.com/business/bitcoin-vs-financial-sector-energy-use

Societal Benefits

One of the greatest benefits of cryptocurrency is democratizing banking services to the 1.8 billion individuals of the world who have no access to any kind of financial offerings – defining them as “unbanked.”

Financial “access for all” is a noble goal. It’s currently in beta test in the country of El Salvador, which recently adopted Bitcoin as its sovereign currency. As far as implementation El Salvador announced it was planning to deploy Bitcoin as legal tender using the cryptocurrency’s Lightning Network, level two solution via digital wallet provider, Strike.

According to Strike, its mobile payments app already launched in El Salvador in March and quickly became the number one downloaded app in the country. This rapid adoption of the digital wallet app is not surprising given the fact that more than 70% of El Salvadorians do not have access to banking or financial services, but mobile device penetration in that country is 146%.

The world will be watching the implementation and rollout of Bitcoin as a reserve currency. Success regarding the PRI principle of societal good would go a long way toward normalizing cryptos as viable investment options even for the most ardent ESG loyalists.

Governance

By necessity and design, most crypto service providers have taken significant steps rolling out safeguards to protect investor privacy and invested assets. They have also implemented anti-corruption technology, which includes anti-money laundering protocols and blocking financing of terrorism using programmed frameworks. All of this has been put in place in advance of formal regulatory requirements being imposed on them.

Additionally, an oft-cited criticism against cryptocurrencies is that it funds criminal activities such as the recent ransomware attacks against energy and food processing companies in the U.S. In reality, a benefit of cryptocurrency transactions is that they are largely transparent and traceable – except for a handful of privacy tokens. Also, blockchain analytics firm Chainalysis reports that criminal activity represented only 0.34% of cryptocurrency transactions in 2020, down from 2.1% in 2019. These activities should encourage ESG-focused investors that crypto is making strides in these critical areas.

Optimism Grows

At least one Bitcoin miner believes the industry has turned a corner on the ESG front and will successfully navigate the concerns of principal investors. Daniel Roberts is the co-founder of Iris Energy, a successful and sustainable Bitcoin mining operation that owns and operates real assets, including data center infrastructure – all powered by renewable energy, with a net-zero carbon footprint.

During a recent Bloomberg interview, Roberts defended Bitcoin’s value proposition. “The recent news in the space and the focus on ESG continues to highlight that the business model we embarked on many years ago is likely the right one,” Roberts said. “We are hopeful of attracting the right capital partners to help us grow.”

Given these facts, perhaps when an irresistible force meets an immovable object the result is a high-potential sustainable investment for institutions.

On the Flipside

  • The greatest risk to cryptocurrency could be its own success, which is likely to drive increased government regulation and oversight – despite the industry’s own efforts to manage ESG concerns.

This is the second part of a two-part article. You can read the first part here.

EMAIL NEWSLETTER

Join to get the flipside of crypto

Upgrade your inbox and get our DailyCoin editors’ picks 1x a week delivered straight to your inbox.

[contact-form-7] You can always unsubscribe with just 1 click.

Continue reading on DailyCoin

Who Wins When ESG Investing Principles and Crypto Investments Collide? (2/2)
 

Related Articles

Is Elrond ($EGLD) Ready To Hit $300 Again?
Is Elrond ($EGLD) Ready To Hit $300 Again? By CoinQuora - Sep 23, 2021

EGLD is trading at $241.78 with a +17.57% gain in the last 24 hours. It keeps on climbing up over the past few weeks. On September 14, 2021, it reached its new all-time high of...

Blockdaemon secures unicorn status with $155M raise
Blockdaemon secures unicorn status with $155M raise By Cointelegraph - Sep 23, 2021

Blockchain infrastructure developer Blockdaemon has secured its status as a crypto unicorn after concluding a $155 million Series B fundraiser, putting the company on track to...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email