A significant portion of the world’s institutional money now has an environmental, social and governance (ESG) mandate. According to PricewaterhouseCoopers’ end-2022 report, global ESG-related assets are expected to reach $33.9 trillion by 2026, accounting for 21.5% of total global AUM.
Simply put: if blockchain companies want to get those next institutional dollars, they need to have an ESG direction.
This article is excerpted from CoinDesk’s inaugural Consensus @ Consensus report, the product of curated group discussions held at Consensus 2023. Click here to download the full report.
While there are those in the crypto industry who want to reject ESG entirely, participants in a roundtable discussion at Consensus were optimistic that the theme was how to embrace ESG, not hide from it.
For some, the most obvious and easiest solution is to encourage the adoption of proof-of-stake (PoS) consensus systems, which see users pledging their assets to make transactions valid. (More than half of the 165 consensus participants who answered the electronic survey voted it the best option for addressing climate change.)
“Proof-of-work vs. proof-of-stake is going to fly over the heads of a lot of people in Washington,” a consensus attendee with prior professional experience in the U.S. Capitol said at the discussion. “The first step to fixing this is to use blockchain as a utility to solve real-world problems.”
While participants were far from consensus on key issues such as whether blockchains should refrain from the carbon-intensive “mining” process, there was alignment in the disconnect between the crypto industry and regulators.
Unless crypto starts speaking the language of Washington DC and can interact with those on Capitol Hill, there are few points of consensus on crypto’s ESG mandate.
Click here to download the full consensus @ consensus report.