Crypto Asset ESG Ranking, Ethereum Tops ── Bitcoin Degrades Due to Massive Energy Use | CoinDesk JAPAN | Coin Desk Japan

According to a survey by crypto asset data company CCData, Ethereum (ETH) topped the crypto asset (virtual currency) ESG ranking for institutional investors, followed by Solana (SOL) and Cardano (ADA). Bitcoin (BTC) has fallen in the rankings due to its high energy usage.

CCData’s first ESG benchmark was created in collaboration with the Crypto Carbon Ratings Institute (CCRI) and was released on July 13th. The benchmark evaluated 40 large and highly liquid crypto assets using parameters such as decentralization, security and climate impact.

Top crypto assets in ESG ranking (CCData)

The importance of ESG (Environment, Society, Governance) in investment is becoming more and more popular, especially among institutional investors and major asset management companies. ESG-related assets under management could reach $33.9 trillion by 2026, accounting for one-fifth of all global investments, according to global accounting firm Pricewaterhouse. Coopers (PwC) predicted in a report late last year.

Many attendees at CoinDesk’s Consensus 2023 said that if crypto assets want to attract new institutional money, they should embrace ESG rather than hide from it. Notably, asset management giant BlackRock, which has been at the forefront of pushing for Bitcoin ETF registration, is a proponent of ESG-focused investing.

To meet this growing demand, CCData has created a new crypto-specific scoring framework.

“ESG benchmarks are an important first step towards making the industry more resilient in the face of challenges and criticism from regulators, policy makers and the media who consider ESG requirements to be a top priority,” reports CCData. the book says.

The benchmark considered a variety of metrics, including decentralization, energy consumption and community engagement, to measure the environmental, social and governance risks and opportunities of crypto assets. Then, the points for each indicator were tallied, weighted average with an overall score of up to 100 points, and a final score ranging from AA (best) to E (worst).

Crypto assets with a grade of BB or higher are considered top class in the report.

Ethereum was the only blockchain to receive an AA grade, performing well on all three ESG factors. According to the report, this is in part due to the network’s recent move to proof-of-stake technology and the elimination of mining, which has reduced energy consumption.

Solana, Cardano, and Polkadot (DOT) were given the highest grade of A for their excellent diversification.

Bitcoin received a B grade, scoring high on social and governance aspects, but was criticized for its high energy consumption and hardware requirements.

“The rating does not imply overall superiority, but rather represents a means of ranking crypto assets according to ESG parameters,” the report states. “We provide the tools an investor needs to make informed decisions and allocate resources to assets that hold his high ESG scores.”

｜Translation: CoinDesk JAPAN
｜Editing: Toshihiko Inoue
｜Image: CCData
｜Original: Ethereum Tops New Crypto ESG Ranking, Bitcoin Slammed for Heavy Energy Usage