GDF GLOBAL SUMMIT:
DIGITAL ASSET COP26 DIALOGUES
Summary
Chaired by Anastasia Kinsky, GDF, and Bryony Widdup, DLA Piper
Thursday, 11 November 2021
Introduction
In light of the conversations at COP26, GDF convened the global crypto and digital
asset community to discuss the role of digital assets in Net-Zero targets, both from
the perspective of crypto’s own ESG credentials, and as a solution to financing the
transition to a sustainable economy.
The Cambridge Centre of Alternative Finance (CCAF) gave a presentation to set the
context for the attendees by sharing data and processes for assessing the carbon
footprint of crypto. The RFI Foundation joined to share input on the considerations
for the industry. The Summit chairs then opened the floor to the delegates to gain
their insights.
PRESENTATIONS:
Michel Rauchs,  CCAF
●
Covered the challenges of making a robust assessment of the carbon footprint
of crypto, including the fact that most estimations are taken at one point in
time
●
There are three steps to creating a robust assessment of carbon footprint,
each of which is a significant component on its own:
1.
Power consumption: continuous estimates of how much Bitcoin is
mined
2.
Hashrate: where is the mining located? Both the country and at a
regional level, on a continuous basis
3.
Local power mixes and average carbon intensity of every local source
●
Looking to improve collaboration with miners in their research
●
Open questions for industry:
○
Model assumptions: we need data on the hardware model makes
○
Methodological trade-offs: looking to make sure that we capture
off-grid mining too

○
CCAF are looking to approach other assets and networks beyond
Bitcoin
○
Need to look at further scope 2/3 emissions - understand the value
chain, where derivatives fit in, how liable is an exchange, .etc.
Blake Goud, RFI Foundation
●
We need to consider the near- and long-term goals. 2050 may seem far off,
but there will be a global stock take in 2023, and new targets expected to be
set in 2025
●
We need to define the boundaries around what we can account for in carbon
emissions - set the scope throughout the value chain
●
Scope 3 includes investments: how much are digital assets being used in
sustainable investments
●
Consider the additionality of doing something with digital assets vs traditional
forms of banking
ROUNDTABLE DISCUSSION:
Participants:
Martha Reyes, Head of Research, Bequant
Frederik Gregaard, CEO, Cardano
Laura Douglas, Senior Associate, Clifford Chance
Mark Blick, CEO, Diginex ESG
Harry Hughes,  Chief of Staff, Eqonex
Tanya Woods, General Counsel, Hut8 Mining
Richard Peers, Founder, Responsible Risk
Dr. Peter T. Golder, COO & Global Head of Commercial, Six Digital Exchange (SDX)
Borys Pikalov, Co-Founder, Stobox
Kirsteen Harrison, Environmental Consultant, Zumo
David Ehrich, Executive Director, AIR
Doug Miller, Business Development Lead, EnergyWeb
Key points:
Crypto’s ESG credentials:
●
This is the big opportunity for the crypto sector to lead the way, showing why
the technologies that we espouse do set an example for other industries
●
We need clarity and standards. GDF should convene standardized indicators
that companies should be reporting on, and develop the industry-wide

standard for ESG reporting. There is a lack of standards or best practices
available for miners in this space.
●
Despite the complexities, we must remember that compared to other
industries/other sectors, we are in a stronger position as we are focusing on
electricity consumption: the supply chain is in many ways simpler, and the
data is there if we share it.
●
We need to collaborate and be honest with our successes and failures, and
hold each other accountable. We are either all winners or we are all losers in
this space. There is no competition to be had.
●
Our biggest risk is our own public perception of energy use. Until we show
that we are taking it seriously and taking action, there is a huge risk that the
general public will not see beyond this problem.
●
We must take the G and the S seriously too, throughout the supply chain.
●
Need to think longer term about where we are heading, rather than simply
where we are today: If we were to replace traditional finance, what would our
energy usage and environmental impact be?
●
Christmas lights at times have bigger environmental impact than the crypto
industry.
Community approach and initiatives:
●
This community responds quickly and actively to internal and external
pressures, and is highly engaged on this already. The user base wants
improvements, especially on waste issues. They are extremely aware of the
impact of crypto, perhaps even more so than institutional investors.
●
The recent narrative has sent our community into rapid discussion and
collaboration. We have seen the launch of initiatives such as the Bitcoin
Mining Council and the Crypto Climate Accord.
●
The Crypto Climate Accord is an industry initiative with a growing community
of over 180 companies globally from both crypto and climate energy sectors
moving to decarbonize crypto, and use decentralization to prove it.
●
Within this community we are developing new open source solutions using
decentralized technologies to achieve three things:
1.
Make it easier to come up with the energy estimate or carbon estimate
for a given type of productivity, meaning that those associated with
mining or holdings and transactions
2.
Make it easier to search for renewable energy and carbon products
using those technologies where the whole lifecycle of these products is
captured on a public chain

3.
Prove it - verify not just that we have made progress but also to
highlight some of the areas where we see big opportunities
●
Industry initiatives are working on developing tools such as mining pool
operators - either to verify the environmental credentials of their pool, or cover
the energies of their entire pool and bake it into the pool fees on the demand
side of the market.
Data sharing:
●
It is important to get our facts right about our carbon footprint, and the
nuances between blockchain networks.
●
Where we have open ecosystems, with fluidity and anonymity, it is harder to
trace the impact.
●
We must share the data: have the metadata on-chain so that we can
understand the environmental footprint throughout.
●
In calculating the impact, we must encourage an open source approach,
including with our methodologies for estimating consumption
Sustainability by design:
●
The industry needs to go further than offsetting.
●
We have built privacy by design through GDPR. How can we build
sustainability by design into blockchain?
●
We need systems which clearly incentivize us to do the right thing. We can
look at creating the financial incentives for a transition to a green economy.
●
We need more discussions on consensus algorithms, whether proof-of-work
or proof-of-stake. Would be keen to host a hackathon on what it would take to
actually convert proof-of-work currencies to proof-of-stake.
●
We can do some more work on comparing the impact of permissioned
blockchain to public blockchain, so that we can evaluate options based on the
project.
●
We can leverage other emerging technologies to support our transition. For
example, how can we leverage AI to harness the data on our carbon footprint
and turn it into something actionable.
Using renewable energy smartly:
●
Biodiversity is also important. When we are developing decarbonization
strategies, we need to think about the wider biodiversity impact. E.g. hydro is a
renewable source, but has biodiversity challenges.

●
Consider whether or not we are using renewable resources appropriately in
terms of how much and when.
Digital Assets play an important role in Net Zero
●
DLT and blockchain have huge potential as a tool for sustainable financing,
and enabling a transition to a sustainable economy.
●
Blockchain can enable so much when it comes to carbon accounting,
allowing companies to collect and track reliable evidence/data accurately.
Architects of the future will choose blockchain every time due to the brutal
transparency of it.
●
DLT plays a big role in creating secondary markets for green bonds.
●
Considering the role that digital assets play in improvements to market
infrastructure, digital assets increase the attractiveness of the investment, and
enables integration with DeFi.
●
Digital assets can play an important role in embedding truth and evidence
into ESG reporting, including in nature-based projects such as rewilding.
Further examples of digital assets in ESG investing can be found in the GDF ESG
Report Digital Assets: Laying ESG Foundations.
Next steps
GDF will convene a working group to focus on the ESG reporting standards for the
crypto and digital asset ecosystem. If you are interested in taking part, please email
anastasia@gdf.io
Building on the work already achieved by key industry initiatives such as the Crypto
Climate Accord, the first steps for the working group would be to:
●
Develop an industry-wide framework for ESG reporting throughout the crypto
ecosystem
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Develop the manual for collecting and sharing ESG data
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Incorporate ESG priorities into the GDF Code of Conduct