Crypto needs an ESG game plan to attract institutional dollars, according to Consensus 2023 attendees.

Currently, a significant portion of the world’s institutional money has an environmental, social, and governance (ESG) mandate. According to a report from PricewaterhouseCoopers in late 2022, global ESG-related assets under management (AUM) are expected to reach $33.9 trillion by 2026, making up 21.5% of total global AUM.

Simplistically put, if blockchain companies want to attract institutional investment, they need to have an ESG focus.

This article is taken from CoinDesk’s first Consensus @ Consensus Report, which is the result of intimate and curated group discussions that were held at Consensus 2023. Click here to download the complete report.

Despite some in the crypto industry wanting to dismiss ESG entirely as too difficult to work with, participants in a roundtable discussion at Consensus were optimistic, discussing how to embrace ESG rather than ignoring it.

For some, the most obvious and simple solution is to encourage the adoption of proof-of-stake (PoS) consensus mechanisms. With PoS, users pledge their assets to become transaction validators. Just over half of the 165 Consensus attendees who answered an electronic survey voted that this was the best option for addressing climate change.

“Proof-of-work versus proof-of-stake is just going to fly over the heads of many in Washington,” said one Consensus attendee during the discussion, who had prior professional experience in the U.S. capitol. “The first step to get this right is for blockchain to be used as a utility to solve real-world problems.”

See also: Could Bitcoin Be the Greatest ESG Investment of All Time? | Opinion

Although attendees were not unanimous on critical issues such as whether blockchains should abandon the carbon-intensive “mining” process, there was agreement on the gap between the crypto industry and regulators.

Unless the crypto industry learns to speak the language of Washington D.C. and communicate with those on Capitol Hill, there are few areas where consensus on crypto’s ESG mandate can be reached…

Click here to download the complete Consensus @ Consensus report.

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