Regarding energy-intensive, proof-of-work environmental issues (Proof of work) Mechanism, Bitcoin (Bitcoin) Used to produce new coins and verify transactions has recently been the front and center.The debate about Bitcoin’s energy use is Tweet from Tesla CEO Elon Musk In May, he stated that his company would no longer accept Bitcoin payments due to the “increasing use of fossil fuels” on the Internet.
Since then, a Bitcoin mining companies can go green in many ways It has been discussed, many of which include the use of 100% renewable energy.For example, El Salvador’s President Naib Bukler recently Disclosed a plan for a geothermal power company, Allowing Bitcoin miners to use its facilities to ensure clean mining.
Prove green potential through ESG ratings
Although innovative, these measures are easier said than done. In addition, if these mechanisms are to be implemented, it may still be necessary to prove Bitcoin’s green potential to show its impact.
To prove true energy conservation, Bryan Bullett, CEO of Bit Digital (one of the largest listed Bitcoin mining companies), told Cointelegraph that the company recently submitted a third-party environmental, social and corporate governance (ESG) review. Bullett pointed out that the international ESG framework is used by many companies and favored by institutional investors to track and verify the company’s environmental standards and compliance.
Sam Tabar, Chief Strategy Officer of Bit Digital, further told Cointelegraph that the company may be the only miner to hire an independent ESG company to list on the Nasdaq:
“Our ESG rating will be provided by Apex Group ESG Ratings & Advisory, a well-known ESG expert. Apex meets our requirements for an independent process to ensure relevance and consistency around ESG, and is committed to creating ESG transparency for investors as we do .”
According to Tabar, once completed, Apex’s ESG report will enable Bit Digital to draw meaningful conclusions to better understand the company’s ESG performance relative to international standards and its peers, and then identify areas for improvement, while tracking follow-up Progress made over time.
It should be noted that Bit Digital’s ESG rating has not yet been announced, as Tabar added that he is not sure when the company will receive the rating. “It does not depend on us, but we are open to review. On average, our miners have been using most of the carbon-free energy mix, so we expect this to be reflected in our scores.”
Will ESG ratings become a continuing trend for miners?
Although Bit Digital may be one of the first mining companies to be reviewed by a third-party company ESG, other miners may also choose to do so.
For example, Rob Chang, CEO of clean energy Bitcoin mining company Gryphon Digital Mining, told Cointelegraph that the company is using 100% hydroelectric power to mine Bitcoin. Although Chang pointed out that Gryphon has achieved 100% carbon neutrality, Brittany Kaiser, chairman of Gryphon’s board of directors, explained that ESG ratings will be carried out after the company’s first mining machine is launched. August. “We haven’t seen ESG ratings yet because we are before operations. However, our electricity source is 100% renewable, and the carbon credits we buy are more than 250 times the footprint it generates to offset our mining machines Delivery.”
Tabar also pointed out that for publicly listed mining companies, it is important to conduct ESG ratings based on the knowledge of shareholders:
“Institutional investors increasingly need transparency and compliance with international ESG standards. Therefore, in order to attract institutional investment, miners must operate in a sustainable manner and provide the market with consistent ESG indicators.”
Although the rationale for ESG ratings is clear, it can be challenging for Bitcoin miners to obtain ESG scores because of the large amount of data that must be disclosed. Andy Pitts-Tucker, managing director of ESG at Apex Group, told Cointelegraph that the ESG rating process differs from provider to provider. “For listed companies or funds, the company will evaluate according to public information such as media sources and annual reports, and score each’E’,’S’ and’G’ category and give a total score.” He added: “For private companies and their investors, the data must be provided by the company itself.”
Pitts-Tucker further added that ESG ratings specifically provide a consistent standard that can be used to measure a company’s ESG performance. Therefore, he pointed out that ESG ratings did attract people’s attention last year, because the global pandemic has refocused the world on all types of risks, including non-financial and ESG factors:
“Companies are now facing increasing pressure from investors, employees, and customers to disclose their ESG certificates. Companies now not only want but need to demonstrate their ESG certificates and compliance because their hands are Forced by the enforcement of regulations.”
Is Bitcoin an ESG disaster?
Although a recent decarbonization report by the Big Four accounting firm KPMG Restore ESG ratings are quickly becoming a company’s best practice, and some traditional financial services companies believe that Bitcoin ESG is almost impossible.
For example, Benefit Financial Services Group, a registered investment advisor for institutions and individuals, recently Publish A blog post about the challenge of obtaining Bitcoin ESG scores. Unsurprisingly, the post mentioned that, in essence, Bitcoin mining is an “undeniable environmental offender.” Therefore, the entire document criticizes Bitcoin as being unethical and harmful to the environment.
Although this may be a common view, Sam Wyner, KPMG’s Director of Crypto Asset Services and Co-Head of Cointelegraph, told Cointelegraph that, in some cases, Bitcoin mining operations may be more suitable for ESG scores than large organizations because they are usually smaller, More focused, therefore, more agile:
“They will face the same challenges that any company trying to obtain an ESG rating will face: organizational maturity, ESG and availability, and the granularity of data needed to support the rating. This is a problem that even the largest companies are trying to solve. And, just Like any company that has experienced this situation for the first time, there is always the risk that the rating will fall below expectations.”