Ethereum (ETH) has topped the first institutional-grade crypto ESG (Environmental, Social, Governance) ranking by CCData, while Bitcoin (BTC) was not even in the top 10. Among the top five, Ethereum (ETH) is followed by Solana (SOL), Cardano (ADA), Binance Coin (BNB), and Aptos (APT). However, ETH is the only crypto project with a “AA” grade.
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While Ethereum (ETH) scored above 25 on all three measures, Bitcoin (BTC) scored a 7 on its environmental metric. The asset got a final grade of “B,” with a total score of 58. Meanwhile, Ethereum (ETH) got a total score of 79.
According to the report, Ethereum’s (ETH) move to a proof-of-stake consensus method, which drastically reduced its energy needs, is what led the project to the top spot. Meanwhile, BTC’s proof-of-work consensus method is notorious for its heavy energy usage.
Will ESG scores play a role in the institutional adoption of Bitcoin and Ethereum?
The role of ESG scores is becoming increasingly important for financial institutions. According to PricewaterhouseCoopers (PwC), ESG-related assets could touch $33.9 trillion by 2026. This would represent 1/5th of all investments worldwide. In the US, ESG-related assets are expected to reach $10.5 trillion by 2026.
According to PwC’s report, 78% of surveyed investors said they “would pay higher fees for ESG funds.” Meanwhile, 52% of investors “are willing to build ESG into performance-related fees.”
The report highlighted that there are conflicts between asset managers’ fiduciary obligations to maximize financial returns for clients and ESG concerns. However, three-quarters of investors now view ESG as a component of those obligations.
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Going by the aforementioned data, it is possible that institutions take the ESG score into consideration before buying an asset. In that regard, Bitcoin (BTC) adoption could see a slump among financial giants, while Ethereum (ETH) might not face such issues.