Cryptocurrencies and ESG: a contradiction in terms?

Bitcoin, roughly half of the market by value, is the cryptocurrency poster child. Tesla wishes to be the clean energy poster child. Why, then, did Tesla announce in February 2021 that it planned to accept Bitcoin in payment, and abruptly reversed its policy only three months later?

As a sustainable company, and a responsible investor, at Candriam we feel it is necessary to research and understand the crypto 'asset class'. Unsurprisingly, we find the massive energy use to be Environmentally damaging. Socially inclusive, because a bank account is not necessary? We conclude otherwise. And Governance? Neither the companies, nor the movements of funds, are appropriately recorded and controlled. That pretty much sums up our 'non-ESG' findings.

Contradiction? At the moment, yes. We will follow this topic closely, as the issues are evolving as rapidly as the 'asset class' is growing.

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