The American House of Representatives recently passed legislation requiring publicly listed companies to disclose Environmental, Social and Governance (ESG) metrics. The bill was passed by a narrow vote of 215 to 214 and has now advanced to the Senate for consideration.
What is sustainable finance?
The bill defines “sustainable finance” as the ‘provision of finance with respect to investments taking into account environmental, social, and governance considerations.’ Expanding on the intent of this bill, House Financial Services Chairwoman Maxine Waters reportedly mentioned that the disclosure will provide investors with the necessary information to make the ‘best investment decisions’ and to hold companies ‘accountable.’
The bill also requires SEC to establish a permanent advisory committee to be called the “Sustainable Finance Advisory Committee.” Further, SEC Commissioner recently declared that the regulatory body was working toward a framework of rules for companies requiring climate-related risk disclosure, adding further that ‘climate and ESG are front and center for the SEC.’
What does this mean for Bitcoin?
The debate around the large-scale energy consumption caused due to Bitcoin mining has been around for many years. However, the issue escalated to new heights after related statements from the world’s billionaires went viral. In the last couple of months, the topic was making headlines almost every day.
In the light of these recent events, however, Bitcoin’s climate problem may have just gone a notch deeper. According to Chinese Journalist Colin Wu,
This will accelerate the conversion of Bitcoin mining companies to the use of green energy.
— Wu Blockchain (@WuBlockchain) June 19, 2021
The Migration
Nearly two-thirds of all Bitcoin mining took place in China, until recently. The country shut down mining activities in Xinjiang, Inner Mongolia provinces, the first two of which are coal-rich provinces. Not only did this bring down Bitcoin’s hash rate, but also set off what is being termed as “the great mining migration.” The potential destinations miners are considering moving their operations to, include, Central Asia, Europe, and America.
