Galaxy Digital, the cryptocurrency investment management firm owned by financier Michael Novogratz, has launched an ESG program focused on employing responsible environmental practices in bitcoin mining.
The financial technology manager said it will actively seek to improve its environmental and carbon footprint. Galaxy Digital’s initiative is an extension of the company’s recent commitment to achieving an 80% sustainable power mix in the energy it uses to mine bitcoin and comes amid conversations in the industry around the environmental toll of broader cryptocurrency adoption.
Bitcoin, a heavy consumer of energy and producer of carbon dioxide, has been deemed an ecologically “dirty” currency by experts for its enormous consumption of electricity and resulting carbon footprint. According to recent data from Statista, a single bitcoin transaction consumes 2,264.93 kWh (kilowatt-hours). By comparison, 100,000 Visa transactions utilize 148.63 kWh.
Galaxy Digital reported that in the third quarter, it used a more than 80% sustainable electricity mix — a goal it had set out to achieve by 2025 — after announcing its initial sustainability commitment in the previous quarter. The Global Bitcoin Mining Council, of which Galaxy Digital is a founding member, was estimated to have used a 57.7%-sustainable mix.
As part of the broader ESG-focused pledge, the firm also vowed to prioritize diverse hiring, development, advancement, and retention.
“We strive to drive systems change through technology, and as we continue to scale our business globally, we are committed to operating firmwide consistently with environmental, social, and governance (“ESG”) best practices,” Novogratz said in a statement.
Institutions are quickly foraying into the crypto economy, but many investors have stayed put due to the environmental impact, a consequence of wider-scale use that regulators and experts alike are looking to change.
The move also comes days after eight Democratic lawmakers penned a letter to six companies in the U.S. that mine bitcoin asking them to divulge how much electricity they use in an effort to assess the impact consumption will have on nearby residents and the environment.
“Given the extraordinarily high energy usage and carbon emissions associated with bitcoin mining, mining operations raise concerns about their impacts on the global environment, local ecosystems, and consumer electricity costs,” the letters said.
The letter was signed by senators Elizabeth Warren, Sheldon Whitehouse, Jeff Merkley and Margaret Hassan, as well as representatives Ed Markey, Katie Porter, Rashida Tlaib, and Jared Huffman.