DE IT

Cryptocurrency and the environment

Our industry needs to rapidly decarbonise, and ETC Group aims to be at the forefront of this drive. We have already measured our AUM carbon footprint and offset the emissions of the majority of the cryptocurrency held by our products, to balance our impact as a first step in our decarbonisation journey.

Our ambitious longer term aim is to work globally with bitcoin and cryptocurrency miners as well as the crypto community, collaborating to drive the industry towards zero carbon emissions and meet the goals set out in the Paris Climate Agreement.

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Cryptocurrency and the environment

Our industry needs to rapidly decarbonise, and ETC Group aims to be at the forefront of this drive. We have already measured our AUM carbon footprint and offset the emissions of the majority of the cryptocurrency held by our products, to balance our impact as a first step in our decarbonisation journey.

Our ambitious longer term aim is to work globally with bitcoin and cryptocurrency miners as well as the crypto community, collaborating to drive the industry towards zero carbon emissions and meet the goals set out in the Paris Climate Agreement.

Our Approach

Working with some of the most respected climate and crypto strategy experts in the world, we worked through the best avenues available to decarbonise what is in our control, we calculated the footprints of the bitcoin mining process linked to our exchange traded products (ETCs) as well as our own operations. These calculations guided our offset strategy and are available from the links below.

Global leaders Crypto Carbon Ratings Institute, calculated the carbon emissions of the BTCetc - ETC Group Physical Bitcoin (BTCE) since its inception. The calculation methodology is available as part of this report, we welcome reviews and comments on the approach. We will be applying the same methodology throughout our suite of ETC products.

It is ETC Group’s ambition to build broad support for this methodology, as the basis for an agreed approach to carbon reduction and offsetting across the crypto industry, including digital asset management companies.

That’s why ETC Group is not only revealing our methodology, but also wants to help other funds and investors in the industry to reduce, offset and ultimately eliminate their carbon emissions going forward.

Carbon strategy

Having calculated our carbon emissions, ETC Group engaged three groups, all global leaders in carbon strategy, reduction and offsetting. Through them, we picked a portfolio of projects which align with our values and will maximise long term carbon avoidance and removal, focusing on biodiversity, carbon sequestration and renewable energy.

Learn more about the projects here

How we make a Cryptocurrency ETC carbon neutral

Carbon offset scheme

Join this initiative

To demonstrate how serious ETC Group is to get this right, they invite any investor or owner of large quantities of bitcoin to contact them for advice or with comments and suggestions at this email: carbonneutral@etc-group.com.

This is an open invitation to the entire industry to embark with the ETC Group on this journey.

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Partners

Crypto Carbon Ratings Institute (CCRI)

The Crypto Carbon Ratings Institute (CCRI) is a research-driven institution providing carbon estimates for investments in cryptocurrencies and technologies such as Blockchain and DLT. CCRI's clients strongly care about a sustainable future and are interested in the environmental impacts their decisions have. We help our clients to understand the technology they are using, how they interact or expose themselves to technology, and the environmental impact of this usage or exposure.

We rely on established scientific methodologies published in highly ranked and peer-reviewed journals to estimate the energy consumption and carbon footprint of cryptocurrencies. CCRI's members have contributed to advance the science behind such estimations and continue to do so (please see our website for already published and upcoming publications). If such methodologies have not been established for a concrete cryptocurrency, CCRI strives to understand, develop, and execute methodologies to model the environmental effects.

Due to our strong commitment to a sustainable future, we do not offer superficial short-term "band-aids" or support companies in greenwashing. Rather, we tailor custom solutions to the needs of our customers to ensure continuous and thorough methodologies for their sustainable business operations..

Southpole

South Pole, recognised by the World Economic Forum as a Social Enterprise, has been at the forefront of decarbonization since 2006. With its global Climate Solutions platform, South Pole develops and implements comprehensive strategies that turn climate action into long-term business opportunities for companies, governments and organizations around the world.

South Pole is also a leading project developer, and has provided nearly 1,000 projects in over 50 countries with climate finance to reduce over a gigaton of CO2 emissions, and to provide social benefits to less privileged communities who are particularly vulnerable to climate change.

ClimateCare

At ClimateCare, we are dedicated to tackling climate change and improving lives. We aim to make our world a climate neutral one – where everyone takes full responsibility for their carbon footprint. What do we do?

We help organisations take responsibility for their climate impact by financing, developing, and managing carbon reduction projects across the world. Based in Oxford and Nairobi, ClimateCare helped create the voluntary carbon market and pioneered carbon finance for community development projects. We deliver some of the largest carbon offsetting programmes in the world. Who do we work with?

Leading Corporates, NGOs and governments trust us to solve complex climate and sustainability issues. With us by their side, they can be confident on their journey to Net Zero and beyond. What sets us apart?

An award-winning profit with purpose Certified B Corporation, we’re recognised as setting the highest standards in our sector. Values and integrity are at the heart of all we do – just as they have been since we were founded in 1997. These values are underpinned by strong environmental credentials, a commercial focus on risk management and a proud record of delivering outstanding results for our clients.

Durrell

At Durrell our mission as a charity is to save species from extinction, but in order to save species, you also need to save their habitat. Our work to restore and protect some of the most threatened habitats on the planet over the last 60 years, also captures and sequesters carbon.

This year Durrell have launched Rewild Carbon, our carbon offsetting programme that not only reduces carbon, but also revives ecosystems, recovers species, and rebuilds livelihoods. Nature is at the very heart of the programme.

Carbon offsetting, if done improperly, can cause more harm than good. Forest restoration that is not well designed can mean rows and rows of fast-growing non-native monocultures that may have quick wins for carbon, but are a disaster for wildlife. By offsetting your carbon with Durrell, you are not merely investing in a ‘stick of carbon’. You are investing in a living, breathing ecosystem and the many animals and communities that flourish there.

Here is why offsetting through Rewild Carbon is hugely beneficial for nature:

  • Our ecosystems, although rich in biodiversity, are highly threatened with many endangered species living amongst the last fragments. Species-rich forests can sequester up to 40 times more carbon than monocultures.
  • 95% of the money you invest in Rewild Carbon will go straight to nature.
  • We will translate tonnes of carbon into wild commodities like the number of species moving through your trees.
  • Our projects are designed with local communities and benefit sustainable livelihoods.
  • We work with local partners that we have long-standing relationships with. Together we can better understand the wildlife, the land and the threats they face.
  • Our approach is transparent and science-driven.

Our first Rewild Carbon project is in the Atlantic Forest of Brazil, working alongside our local partner Instituto de Pesquisas Ecologicas (IPE), with whom we have collaborated for 20 years. This extraordinarily lush forest in Brazil, is one of the richest, most biodiverse and threatened habitats on the planet. Sadly, only 6% of it remains today, in isolated fragments, replaced by pastures and intensive farmland.

The project aims to restore 4,500 hectares of vital forest corridors by 2030, linking these isolated fragments, and thereby creating lifelines for the wildlife including highly threatened populations of black lion tamarins, jaguars, tapirs and giant anteaters. These corridors are established by planting 100 different species of native trees, which will sequester nearly 2 million tonnes of CO2 equivalent over the trees lifetime.

Projects

Rewild Carbon Offsetting Project

Durrell is working with local partners IPE (Instituto de Pesquisas Ecologicas), with whom they have partnered for many years, to restore 5,000 hectares of new forest through forest corridors and agroforestry. The project aims to plant 7 million trees, from over 100 different native species. The tree corridors provide lifelines for threatened wildlife including black lion tamarins, jaguars, and ocelots. In addition, the trees are grown in community-run nurseries and agroforestry provides income for nature-dependent communities that live there.

Renewable hydropower for the island of Sumatra

This grid-connected, run-of-river hydroelectricity plant is built on the upper banks of the Musi River near Sumatra’s port city of Bengkulu. By harnessing the kinetic energy of powerful running water, the Musi River Hydro plant has a total-installed capacity of 210 MW and delivers over 765,000 MWh to Sumatra’s grid every year – that’s enough to meet the demands of over 700,000 Indonesians on average each year!

Pamir Hydro Project, Tajikistan

This two-turbine 14MW hydroelectric power project generates around 94,000MWh of clean, reliable energy every year. This project is protecting local forests, cutting carbon and re-invigorating the local economy. For the first time in 15 years, the region’s homes, clinics, schools, government administrative buildings and businesses have uninterrupted power.

ESG

Social

As a disruptive and relatively recent innovation, the social impacts of Bitcoin and cryptocurrency, both positive and negative, are still emerging. However, two evolving benefits brought by cryptocurrencies are already evident: financial inclusion and economic empowerment.

Many consider that human bias typical of traditional financial services can play out by discriminating against minorities, whether on ethnic, gender, religious or other grounds. Being free from these biases, cryptocurrencies are entirely inclusive, as evidenced by their growing popularity amongst certain minority groups.

Sending money home’ has always been a way that emigrants have helped their families, and some of the poorest countries in the world rely on these overseas remittances. In fact, they can be a meaningful part of national GDP. The incumbent remittance industry charges in the order of $25 billion per annum in transfer fees for funds often used for basic fundamental needs such as housing, education and healthcare. By contrast, cryptocurrencies enable this transfer at no cost, using a smartphone. The result? More and faster economic empowerment for those who need it most.

Governance

Being decentralised, and with embedded democratic and inclusive decision-making procedures, Bitcoin and cryptocurrencies employ a totally different governance system to traditional financial institutions. This contrast makes direct comparison between the two difficult, and both have advantages and disadvantages. Governance advantages of Bitcoin and cryptocurrencies include transparency and traceability. For instance, rather than relying on a selected - and generally exclusive - board to make strategic decisions around risk management and core procedures, the process is open to everyone in the community.

What’s more, it is transparent and all transactions are fully traceable, which is often not the case in the traditional financial system. A governance and transparency challenge for the crypto ecosystem is that individual identities can be difficult to trace, however this will likely change further down the road.

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