Crypto Poses Governance, Climate Risks, ISS ESG Warns

A new paper published by ISS ESG, the responsible investment arm of Institutional Shareholder Services, outlines the governance and climate impacts of crypto assets for investors. As well as the cryptocurrency industry’s rate of growth slowing, it continues to evade regulations applied to traditional finance players, the report said, meaning that investors are more vulnerable to issues such as the recent collapse of the FTX network. Further, mining of cryptocurrency is very energy intensive. Although this process can be done using renewable energy, ISS ESG said crypto mining carries a risk of “crowding out” other needs for renewable energy. ISS ESG has outlined some recommendations to address these risks, including assessing the alignment of crypto investments with the UN Sustainable Development Goals (SDGs), or adopting a proof of stake algorithm.

The practical information hub for asset owners looking to invest successfully and sustainably for the long term. As best practice evolves, we will share the news, insights and data to guide asset owners on their individual journey to ESG integration.

Copyright © 2023 ESG Investor Ltd. Company No. 12893343. ESG Investor Ltd, Fox Court, 14 Grays Inn Road, London, WC1X 8HN

To Top
Newsletter SignupReceive all the latest stories from the ESG Investor editorial team

Subscribe to our free weekly newsletter below and never miss a story.