First Bitcoin ETF in Europe Receives an ESG Label, Sparking Debate
- Many environmental experts were concerned by Jacobi Asset Management’s decision to add an ESG label to its Bitcoin ETF.
- Martin Bednall, Chief Executive of Jacobi, told investors that the ETF will be fully decarbonized.
- Jacobi will support renewable energy initiatives to make up for the greenhouse gas emissions brought on by Bitcoin mining.
Jacobi Asset Management has attached an ESG (Environmental, Social, and Governance) label to its Bitcoin exchange-traded fund (ETF), a decision that concerned many environmental experts.
Jacobi Asset Management, the European ETF issuer, is specialized in providing institutional investors with digital asset management. The company said its Jacobi FT Wilshire Bitcoin ETF is an Article 8 fund, which is a fund that promotes ESG according to EU regulations. Bloomberg reported that the Article 8 fund category covers about $6 trillion in assets.
This is the first time the EU’s ESG investing rules have been applied to an ETF that allows investors to “speculate on the value of Bitcoin,” according to Bloomberg. Martin Bednall, Chief Executive of Jacobi, told investors that the ETF will be fully decarbonized.
Bednall shared that the ETF counts as an ESG product because Jacobi will support enough renewable energy projects to compensate for the greenhouse gas emissions that are caused by Bitcoin mining.
It has been estimated that the computing power needed to mine crypto, uses about 140 terawatt-hours a year. The Cambridge Center for Alternative Finance estimated that only 38% of Bitcoin mining is done through sustainable methods.
Mathew Brander, a Senior Lecturer at the University of Edinburgh Business School, claimed that using Renewable Energy Certificates (RECs) isn’t credible to fulfill a decarbonization strategy. He said, “Buying a REC doesn’t represent any real-world relationship between digital assets and renewable power.”
Bednall addressed the concerns and criticisms and shared, ”RECs were preferred over offsets, as the most material part of our carbon footprint is in relation to the electricity consumption of the Bitcoin network.”
The Jacobi Bitcoin ETF was viewed as a landmark development in the crypto space, as it’s the first Bitcoin ETF in Europe and launched two years after its approval. The ETF trades under the ticker (BCOIN), and the Guernsey Financial Services Commission is its regulatory entity.
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