Cryptocurrency And ESG: The Beginning Of A Beautiful Friendship

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Dustin Plantholt   Editor

Cryptocurrency And ESG: The Beginning Of A Beautiful Friendship

Crypto is all about community and in 2021 the community spoke loud and clear about its concerns regarding negative environmental impacts, sustainability, the corruption in government and governmental structures, supply chain and data sovereignty.

Increasingly socially conscious investors are looking for companies to improve the environment and the public good and conduct business in a way that honors fairness and transparency.  These three factors—the environment, social responsibility, and governance are commonly referred to as ESG. And the crypto world is taking it seriously as ESG standards have quickly become a common investment benchmark.

In response to the fervor, not only did blockchain technology go mainstream, its very nature providing opportunities for change and improvements in governance and supply chain issues, but also the investment industry saw a boom in funds focused on sustainability.

This growth was due to investment company “elders” showcasing their ESG focused funds in the traditional model and through the introduction of cryptocurrency ESG focused funds such as the Sarson Funds Cryptocurrency ESG Strategy Fund, which strives to align community interests with investment goals and asset managers. Sarson Funds showcases how ESG can thrive in a cryptocurrency portfolio.  Only projects that seek to protect civil rights, reduce corruption, expand financial inclusion, reduce censorship, promote liberty, improve health services, foster scientific discovery, protect the environment, benefit low-income communities and others are considered for investment.

When it comes to protecting the environment, the digital asset industry has an incredible ability to respond quickly to news. Shortly after Elon Musk’s Tweet condemning the high energy usage of Bitcoin mining, the crypto community responded with a carbon neutral Bitcoin cryptocurrency. The traditional banking system uses more than four times the energy to power its systems than Bitcoin.  And since Bitcoin primarily uses renewable energy, its overall carbon footprint is between half and a quarter of that of brick-and-mortar banks.

The world of crypto places high ideals on social projects. From decentralized autonomous organizations to tokenization of real estate, personal data sovereignty, and NFTs, blockchain technology provides many opportunities for investors to add social impact projects to their portfolios.  Sarson Funds investment team spends countless hours researching projects like GoodDollar, a non-profit community-driven protocol designed to generate, fund, and distribute basic income via its token, G$. What other platform could dream up free income for anyone with an internet connection?

Cryptocurrency’s ability to expand the reach of capital markets through decentralized and permissionless delivery of financial goods and services is astounding. Delivering on the promise will require good governance.  From the transparency of the peer-to-peer architecture of the blockchain, to doing social good through projects such as GoodDollar, to protecting the environment by responding quickly and creatively to threats, cryptocurrency is a natural fit for an ESG portfolio as the options are limitless.

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Dustin Plantholt   Editor