What is ESG?
ESG stands for Environmental, Social and Governance. It refers to the three criteria used by investors in assessing a company’s performance regarding its impact on society and the environment. Companies with higher scores in these areas are considered more responsible from an ethical standpoint than those who score lower. The evaluation of companies based on their ESG ratings has become increasingly important as socially conscious investing grows in popularity among both institutional and retail investors alike.
Why is it important for cryptocurrency?
Cryptocurrency is no different when it comes to considering social responsibility; many investors now want to know how well projects adhere to ESG principles before they invest their money into them. Evaluating digital asset projects according to environmental, social, and governance standards can help potential or existing holders decide if they should hold onto or add new holdings that align with their own values while also providing insight into which ones may be associated with higher risk factors or potentially fraudulent activity down the road due to lack of transparency within project development teams or operations processes. Additionally, companies developing products using blockchain technology must also consider real-world implications such as energy usage when implementing any protocol changes – something that could heavily influence investor sentiment toward a particular coin over time depending on how sustainable practices are being implemented across the board by developers working within that space overall.
