KPMG, one of the world’s Big Four professional services firms, recently released a report on Bitcoin and its impact on environmental, social, and governance (ESG) issues. The report suggests that Bitcoin offers several benefits within an ESG framework.
In the report, KPMG examined each component of ESG individually and found that emissions are a more significant indicator of environmental damage compared to energy usage. When comparing Bitcoin’s emissions to other sources such as tobacco and tourism, the report found that Bitcoin ranked second lowest in terms of contributing to emissions, just behind “Video (US)”. This led the report to conclude that “Bitcoin’s emissions may be lower than often discussed.”
The report also discussed strategies to improve Bitcoin’s carbon footprint, such as using renewable energy and energy produced from methane for mining.
Additionally, the report addressed concerns about Bitcoin’s role in money laundering. It stated that money laundering accounts for 2-5% of the world’s GDP, according to United Nations Office on Drugs and Crime statistics, while it only accounts for 0.24% of Bitcoin transactions. The report highlighted that laundered money is received in Bitcoin far less frequently than in other cryptocurrencies like Ether, stablecoins, or altcoins. It also mentioned that Anti-Money Laundering (AML) and Know Your Customer (KYC) measures could be implemented when off-ramping Bitcoin, even though there are currently no AML/KYC requirements for transacting with the cryptocurrency.
The report provided positive use cases of Bitcoin, such as its role in fundraising for Ukraine and electrification projects in rural Africa. It also emphasized that Bitcoin’s governance is robust due to its decentralized nature, which prevents changes to its rules without forking the currency. This prevents abuse or misuse by those in power or individuals with ulterior motives.
However, despite outlining the benefits and use cases of Bitcoin, the report acknowledged that it is still widely misunderstood. KPMG, as a firm, offers various advisory services related to cryptocurrencies.
Overall, the 12-page report relied on secondary sources and familiar use cases to shed light on Bitcoin’s potential in the ESG space. It serves as a reminder that Bitcoin’s impact is not limited to financial aspects but also extends to environmental and social considerations.
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