In a recent roundtable, cryptocurrency experts converged to dissect the intersection of Environmental, Social, and Governance (ESG) factors and digital assets. During the discussion, MarketVector’s Indexes’ COO Thomas Kettner noted that ESG scores make cryptocurrency more competitive as an asset class.
The panel included Lena Klaaßen, Co-Founder of CCRI (Cryptocurrency Rating Institute), Nick Jones, CEO & Co-Founder of Zumo, and Kettner. Klaaßen noted during the discussion that cryptocurrencies are inherently superior when it comes to ESG over their increased transparency.
Zumo’s co-funder chimed in, noting that transparency could be seen as one of the unique selling points of the cryptocurrency sector, as blockchain-based digital assets are “uniquely transparent” when it comes to ESG analysis.
MarketVector’s Indexes’ COO Thomas, during the panel, noted that it make sense to make ESG measurable and comparable, as scores between different projects can be compared and allow investors to make informed decisions based on different metrics.
Per his words, it’s standard in asset classes to have ESG scores, and these scores could make cryptocurrencies more competitive when compared to other asset classes.
Kettner also touched on how checking ESG factors is different between regular companies and crypto projects. He said that in crypto, the community plays a big part due to its open and decentralized nature, unlike traditional companies where mostly the management and stakeholders decide on ESG actions.
The group supported the idea that in the future, ESG will move from being just a trendy term to a regular part of evaluating assets, much like how it’s done in traditional markets. They believe that paying attention to ESG factors will become crucial in judging the value of digital assets, making crypto more aligned with traditional finance in terms of being sustainable and transparent.
Earlier this year, CCData’s ESG Benchmark report revealed that ESG mandates are “increasingly prevalent amongst institutional investors and funds,” with global ESG-related assets under management forecasted to reach $33.9 trillion by 2026.
Per the report, Ethereum was the only digital asset to achieve an AA grade in the ESG Benchmark, and it was followed by Solana, Cardano, Binance Coin ($BNB), Aptos ($APT), Polkadot ($DOT), $DAI, $XRP, and Tezos’ $XTZ, all of which managed to get an A rating.