Digital-asset companies are pushing back against claims of excessive energy usage in the cryptocurrency sector as world leaders flock to Glasgow this week for key climate change talks.
Global Digital Finance, whose members include industry juggernauts BitMEX, Coinbase Global Inc. and Crypto.com called for greater data transparency around issues of sustainability. The group published a report on Monday in an effort to set industrywide environmental goals amid greater scrutiny of Bitcoin’s contribution to global warming. The report contemplates how best to measure environmental impact of digital assets, digs into their social utility and warns policy makers against making a trade-off.
The rise of ESG investing, where investors take account of a company or asset’s environmental, social and corporate governance credentials, risks tempering demand for the digital assets. Crypto advocate Elon Musk cited excessive energy use when he stopped taking Bitcoin as payment for Tesla Inc. vehicles earlier this year.
The industry pushback was apparent in London-based commercial think-thank Z/Yen’s contribution to the report titled: Don’t Throw the Digital Baby Out With the Climate Bathwater.
Bitcoin’s carbon footprint is an awkward reality for investors that have flocked to the digital currency this year amid a rally that has seen the price more than double. As an ever growing number of investors commit to align their portfolios with the Paris Agreement’s goal of keeping planetary warming to 1.5°C, bringing clarity to Bitcoin’s carbon contribution and taking steps to mitigate that will become ever more crucial.
Coinbase Chief Policy Officer Faryar Shirzad proposed a commitment to voluntary reporting: “It may be time for our industry to partner with established leaders in carbon accounting and reporting to develop a bespoke, standardized framework for assessing and disclosing the climate impacts of crypto mining, trading, and holdings.”
