In the first institutional-level crypto ESG rankings conducted by CCData, Ethereum (ETH) emerged as the highest-ranked cryptocurrency, while Bitcoin (BTC) did not make the top 10.
The top five cryptocurrencies are Ethereum (ETH), Solana (SOL), Cardano (ADA), Binance Coin (BNB), and Aptos (APT). Notably, Ethereum (ETH) is the only crypto project to receive an “AA” grade in the rankings.
In the ESG ranking, Ethereum (ETH) scored over 25 points on all three metrics, while Bitcoin (BTC) scored 7 points on its environmental metric. Bitcoin ultimately received a grade of "B" with an overall score of 58, while Ethereum received a score of 79.
The report attributes Ethereum’s (ETH) top ranking to its shift to a proof-of-stake consensus method, which significantly reduces its energy requirements. In contrast, Bitcoin (BTC) relies on a proof-of-work consensus method that is known for its high energy consumption.
The impact of ESG scores on institutional adoption of Bitcoin and Ethereum:
ESG scores are becoming increasingly important in the financial sector, with forecasts from PricewaterhouseCoopers (PwC) suggesting that by 2025, ESG-related assets could reach $33 trillion, or one-fifth of global investment. In the United States, ESG-related assets are expected to reach $5.2026 trillion by 2026.
According to the PwC report, 78% of investors surveyed said they were willing to pay higher fees for ESG funds. In addition, 52% of investors said they were willing to include ESG factors in performance-related fees.
The report highlights the conflict between asset managers’ fiduciary duty to maximise financial returns and the growing importance of ESG issues. Nevertheless, three quarters of investors now view ESG as an integral part of these fiduciary obligations.
Considering the above data, institutional adoption of assets may be affected by ESG scores. Therefore, Bitcoin (BTC) adoption among financial giants may decline, while Ethereum (ETH) may face fewer obstacles in this regard.