Major crypto firms 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 Abu Dhabi Global Market, called for greater data transparency around issues of sustainability.
The group released a report to measure the environmental impact of cryptocurrencies.
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 crypto assets. The group published a report today 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 the environmental impact of cryptocurrencies, digs into their social utility, and warns policymakers against making a trade-off. Earlier, tech giant Elon Musk cited excessive energy use when he stopped taking Bitcoin as payment for Tesla Inc. vehicles.
Bitcoin’s impact on the environment has been a major issue among many.
Bitcoin’s carbon footprint is an uncomfortable reality for investors that have flocked to the cryptocurrency this year amid a rally that has seen the price more than double. As an ever-growing number of investors commit to aligning 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 said, “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.”