Bitcoin greenwashing? Lawmakers want clearer definitions of green energy

UK lawmakers have called for more regulatory powers to combat the rise of financial “greenwashing” – a deceptive practice where a company exaggerates or makes up the scale of its use of green energy.

A report by the House of Commons cross-party Treasury Committee urges the UK government to sharpen its definition of environmentally conscious investment and consult on the prospect of attaching ‘green labels’ to financial products. The report notes that ‘green’ claims associated with financial investments are often exaggerated and may not be in line with customer expectations:

“It is clear that in some cases the labels or descriptions of ‘green’ or ‘climate-related’ indices do not necessarily reflect consumers’ legitimate expectations of what they would usually mean.”

The call from lawmakers came the same day that Twitter CEO Jack Dorsey and Tesla CEO Elon Musk agreed on Bitcoin’s (BTC) potential to go completely green and undermine the image of an environmentally harmful technology.

Musk and Dorsey responded to a new report from Square (the latter of which is CEO) and Ark Invest, which explored Bitcoin’s potential to contribute a boon to the use of green energy. Titled “Bitcoin is the key to an abundant, clean energy future,” the report argued that, coupled with renewable energy storage, Bitcoin’s energy-hungry nature could solve the problem that renewable energy often becomes wasted in times of plenty.

Investors’ desire to deal only with environmentally conscious companies has led to the emergence of ESG investments, which consider environmental, social and corporate governance factors important considerations when making sustainable investments.

CEO of UK-traded Bitcoin mining company Argo Blockchain, Peter Wall, told Cointelegraph that he had witnessed an increase in ESG chatter in the mining space in recent months. Wall noted, however, that not everything seemed real:

“There has certainly been a lot of talk about ESG in crypto mining in recent months, which is great and is moving things in the right direction. However, talking without action is not good enough and can lead to cynicism. “

Argo is a Bitcoin mining company that uses renewable energy in the form of hydropower on its various mining companies in Canada. The company’s stock price is currently 4,000% higher than last year, and it recently purchased a 320-acre plot of land in Texas to expand its mining operations into the United States.

Wall agreed with UK lawmakers’ recent calls to force companies to back up their claims about the use of green energy:

“We believe an important step in preventing greenwashing is to ensure that companies can substantiate their claims and prove that they are really doing their best to have a positive impact on the environment, and we do.”

Wall said the demand from environmentally conscious investors could, of course, speed up the process, applying clearer definitions to green labels.

“Limiting the impact of climate change is critical, so it’s essential that companies do everything they can to reduce greenhouse gas emissions and their carbon footprint. Investor demand can help with this, and clear guidelines are needed to enable companies to invest in cleaner technologies, ”said Wall.

Not everyone agreed that Bitcoin’s future prospects were as green as they seemed. As reported by the BBC, Bitcoin critic and author David Gerard referred to the Square / Ark paper as a “cynical exercise in Bitcoin greenwashing.”

“The reality is: bitcoin runs on coal,” Gerard told the BBC, referring to the recent coal mine accident in Xinjiang, China, which temporarily wreaked havoc on Bitcoin miners’ ability to produce new coins.

Bitcoin’s reliance on fossil fuels from China is indisputable, but compared to the resource consumption of the current fiat system, its effect on the environment seems far less outrageous.