What now for crypto as ESG called out as a scam

ESG is a tool to create value, promote sustainability, and deliver a more equitable world.

However, behind the exaggeration is the potential to pick winners and losers. Unfortunately for cryptocurrencies, the judgment comes mainly from the negative from ESG’s point of view. This is not a bad thing for the market from a deeper perspective.

What is ESG?

ESG, the acronym for Environment, Social & (Corporate) Governance, temporarily translated as Environment, Social & Corporate Governance is a set of standards for measuring factors related to sustainable development and business impact on the community. The concept of ESG originally appeared as CSR (Corporate Social Responsibility) – a term to refer to corporate social responsibility, in a publication published in 1953 by U.S. economist Howard Bowen.

With a focus on sustainability and responsible investment, ESG has become more popular in the corporate and investment world. Many ETFs dedicated to ESG and financial products have sprung up to meet demand.

ESG and Cryptocurrencies

Recently, investors have mixed opinions regarding the cryptocurrency market, including BlackRock.

Elon Musk claimed that Bitcoin miners mainly used non-renewable, polluting energy sources to power their devices a year ago. Conflict reports estimate up to 75% of Bitcoin’s network uses renewable energy sources.

Other links to cybercrime, sanctions evasion, and money laundering means that “cryptocurrencies may not be in ESG-compatible portfolios,” the company said.

Elon Musk calls ESG a scam

Elon Musk tweeted criticizing the U.S. Environmental, Social, and Governance (ESG) index. Musk was deeply disconcerted when Tesla was excluded from the S&P 500 ESG index and had called ESG a “scam.” After his tweet, Tesla’s stock fell 6.8%, costing Musk $12.3 billion.

“The criticism of the ESG index and the gloomy situation of the global stock market put pressure on Tesla’s share price,” said Wedbush analyst Dan Ives. However, with 209.9 billion USD in assets, Elon Musk is still the wealthiest billionaire on the planet, according to Bloomberg Billionaire Index.

The index is renowned for its Nasdaq Composite technology stocks that posted a 4.7% decline on May 18 due to investors’ sell-off. However, Tesla’s stock situation was even bleaker after excluding the S&P 500 ESG index. This indicator uses environmental, social, and governance data to rank and evaluate the efficiency of companies to investors.

This indicator uses environmental, social, and governance data to rank and evaluate the efficiency of companies to investors. In addition, Elon Musk’s decision to buy back Twitter has caused the share price of many tech companies to fall, including Tesla’s shares which have fallen 30%.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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