At a time when the climate issue is vital to saving the planet, the economic world is not standing idly by and is creating ad hoc financial instruments, such as the Lyxor Climate ETF.
Climate ETF: Lyxor’s proposal for the environment
The choice may seem a little unusual, but the aim is noble: to invest only in companies that have made climate change a mission.
This is why Lyxor’s ETF only includes in its basket companies that adopt policies compatible with the Paris Agreement, namely curbing global warming to a 1.5° increase by 2050.
The company told the Financial Times:
“Climate forms a key pillar within Lyxor’s ESG strategy. We launched the world’s first Green Bond ETF back in 2017, and more recently we were the first ETF provider in Europe to launch a comprehensive range of climate equity ETFs designed to meet the requirements of EU Climate Transition Benchmarks, and EU Paris-Aligned Benchmarks. They have already grown to over €1.6bn1 in assets as investors of all sizes look for dependable ways to decarbonise their portfolios. With these funds, you can do your part to help limit global warming to 1.5°C, the most ambitious scenario of the Paris Agreement”.
The Glasgow Agreements
Cop26, the UN climate conference in Glasgow, has just ended. The aim was to map out a way to reverse global warming, starting with ending the use of coal and subsidies for fossil fuels. All this remained in draft form, because in the final text there is general talk of slowing down the use of coal.
It is no coincidence that it is referred to as a “downward agreement”.
Business and climate change
It is in this scenario that Lyxor’s ETF comes into play, raising investors’ awareness by investing their money in environmental sustainability. In the meantime, however, there are those who continue to demonize Bitcoin for its high energy consumption.
True, Bitcoin consumes more energy than entire nations, but one only has to read the analyses regularly carried out by the University of Cambridge to realize that the problem is not only Bitcoin.
Bitcoin currently consumes more energy than the Netherlands and slightly less than Argentina, but it is nowhere near the energy consumption of China (which is home to 1 billion people).
In terms of numbers, Cambridge estimates Bitcoin’s annual consumption at around 116 TWh. Gold consumes more: 131 Twh.
US energy waste amounts to 206 Twh. China’s cut of renewable energy sources is 105 TWh.
So, is Bitcoin really the problem?