KPMG, one of the world’s leading professional services firms, has 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 terms of environmental concerns, the report highlights that emissions are a more important indicator of environmental damage than energy usage. To put Bitcoin emissions into perspective, the report compares it to other sources such as tobacco and tourism, and finds that Bitcoin’s emissions are the second smallest contributor, just behind video (US). This finding challenges the common narrative that Bitcoin has a significant negative impact on the environment. The report concludes that “Bitcoin’s emissions may be lower than often discussed.”
To further improve Bitcoin’s carbon footprint, the report suggests utilizing more renewable energy and mining with energy produced from methane. These strategies are commonly recommended for reducing the environmental impact of Bitcoin mining.
The report also addresses the issue of money laundering, stating that Bitcoin’s contribution to money laundering is relatively small compared to the total amount involved in such activities. According to the report, money laundering accounts for 2-5% of the world’s GDP, while Bitcoin transactions account for just 0.24% of that total. Additionally, the report highlights that laundered money is received in Bitcoin far less frequently than in other cryptocurrencies such as Ether, stablecoins, or alt coins. It suggests that Anti-Money Laundering (AML) and Know Your Customer (KYC) measures can be applied when converting Bitcoin to fiat currencies, even though there are currently no AML/KYC requirements for transacting with Bitcoin.
The report emphasizes the positive use cases of Bitcoin as well. It mentions examples like fundraising for Ukraine and electrification projects in rural Africa, showcasing how Bitcoin can be used for social impact.
In terms of governance, the report describes Bitcoin’s governance system as “robust” due to its decentralized nature. Unlike traditional financial systems, Bitcoin’s rules cannot be changed without forking, which prevents abuse or misuse by those in power or individuals with ulterior motives.
It is important to note that the report relies on secondary sources and familiar use cases to support its findings. While acknowledging that Bitcoin remains a misunderstood asset, KPMG also offers a range of crypto-related advisory services, demonstrating its commitment to the evolving digital currency landscape.
Overall, KPMG’s report provides a comprehensive analysis of Bitcoin’s impact on ESG issues. By highlighting the potential benefits and addressing the misconceptions surrounding Bitcoin, the report contributes to a more nuanced understanding of the cryptocurrency’s role in the global economy.