Crypto Needs ESG to Attract Institutional Dollars: Consensus 2023

• Crypto companies need to embrace ESG in order to attract institutional dollars.
• At Consensus 2023, attendees discussed how to use blockchain as a tool for solving real-world problems.
• Participants agreed that there is a disconnect between the crypto industry and regulatory bodies.

Crypto Needs Institutional Dollars: An ESG Game Plan

The crypto industry needs environmental, social and governance (ESG) practices in order to draw in institutional dollars. Global ESG-related assets under management (AUM) are estimated to reach $33.9 trillion by 2026, representing 21.5% of total global AUM according to PricewaterhouseCoopers’ late-2022 report. At Consensus 2023, attendees argued that the crypto sector should embrace ESG instead of avoiding it.

Proof-of-Stake: A Solution?

Participants at Consensus voted that proof-of-stake (PoS) consensus mechanisms could be an effective way of addressing climate change as users pledge their assets to become transaction validators. However, one attendee pointed out that regulators may not understand the distinction between PoW and PoS blockchain networks which necessitates the usage of blockchain as a utility for resolving real world issues first before any other considerations can come into play.

Challenges Ahead

Though there were differing opinions about whether blockchains should ditch carbon-intensive “mining” processes, everyone agreed that there is a gap between the crypto sector and regulatory bodies which must be bridged if companies want to draw in institutional investors with an ESG mandate.

Ethereum’s ShadowChain Protocol

In addition to PoS networks being touted as potential solutions for reducing emissions from energy intensive cryptocurrencies such as Bitcoin, Ethereum is looking into its own ShadowChain protocol which would enable developers to create applications without needing their own chain while also increasing data privacy through decentralized storage on offchain nodes thus lowering overall costs associated with running decentralized apps on Ethereum’s mainnet network .


Crypto companies need ESG compliance if they want institutional money but this requires a greater understanding of how blockchain technology can be used effectively for real world problems while keeping up with regulations all at once – something which will take time and effort but ultimately pay off in terms of attracting more capital into this space over time .