It is widely acknowledged that the factors that comprise Environmental, Social and Governance reporting and compliance are somewhat arbitrary across the board. Businesses naturally seek to present their data in the best possible light, while investors who consider ESG have difficulty truly comparing apples to apples.
For example, if a chemical factory in a developing nation reduced its most harmful emissions by 10% in a single year, that would be a much more impressive achievement than a watch company in Switzerland doing the same. The data does not tell the story. But who decides how the two achievements truly compare?
Iâd like to discuss ideas for some type of global standard that would make ESG scores reliably comparable, and increase the credibility of ESG reporting in general.
Three organizations that come to mind that are making significant progress in creating ESG reporting frameworks are: Sustainability Accounting Standards Board (SASB), Global Reporting Initiative (GRI), and the Task Force on Climate-related Financial Disclosures (TCFD). However, if Iâm not wrong, they seem to be doing this independent of one another.
How about a Digital Davos event that brings these three together to discuss increased cooperation in developing a uniform ESG reporting standard?
Interesting topic. Was discussing this with @Kade-CKC-Studio the other day, as related to the below article.
Elon Musk took to Twitter recently to express his concerns, sharing an article that highlighted the surprising fact that tobacco giant Philip Morris had a significantly higher ESG score than the pioneering electric vehicle company. Tesla received a modest ESG score of 37 out of 100, whereas Philip Morris scored an impressive 84.
âHowever, this has also led to opposition as many seeESGrating as faulty and politically motivated. Additionally, companies are accused of âgreenwashingâ or other behavior to game the ratings system to artificially boost ESG scores.â
Relatedly, as @Delia-CKC-Fund pointed out recently, blockchain and ESG can be quite a synergistic set of focus areas.
In the below article, Venkataraman discusses how ESG initiatives aim to address climate change, pollution, and social issues while emphasizing the need for transparent and accountable reporting. He highlights the role of blockchain in enhancing ESG efforts by providing immutable records, traceability, and decentralized identity verification. The article also mentions various organizations and projects contributing to ESG goals. Ultimately, blockchain is presented as a tool to bring trust, transparency, and compliance to ESG management, offering potential solutions to complex global challenges.
For anyone interested, this is a great report generated by Deutsche Digital Assets addressing the prevailing misconceptions surrounding the energy consumption associated with Bitcoin mining. ESG Aspects of Cryptoassets
@Delia-CKC-Fund Interesting paper, thanks for the link. The biggest takeaway for me is that determining the net environmental impact of Bitcoin is much more complex that simply looking at energy usage.
For example, Iâve always wondered about harvesting the energy from excess gas which is flared at refineries. Very interesting to read that there are BTC miners using this energy to create steam to drive generators.
This type of innovation, over the long term, has a net impact that is really difficult to quantify.