Congrats Dr. Steven Yamshon on your new certificate “Climate Change Awareness & Leadership”

“Continuous learning is the minimum requirement for success in any field.” – Brian Tracy

We are proud of BFSG’s Steven Yamshon, PhD, for his new graduate certificate “Climate Change Awareness and Leadership”. This adds to his other degrees in environmental resources and advanced certifications in sustainability and climate change. BFSG’s Environment, Social, and Governance (ESG) investing efforts are spearheaded by Dr. Steven Yamshon and if you’d like to learn more about our ESG portfolios, please feel free to talk with us.

Restore our Earth and Start Reducing Your Carbon Footprint

Today we celebrate Earth Day and sticking to the theme of this year’s Earth Day, “Restore Our Earth”, this blog post is focusing on restoring the world’s ecosystems by helping you reduce your carbon footprint.

Did you know that meat and cheese are some of the most carbon-intensive foods to produce?(1) Globally, 77% of agricultural land is used to produce meat and dairy and according to The Land Report, the meat and dairy industries are on track to be the world’s biggest contributors to climate change, outpacing even the fossil fuel industry. In just the U.S. alone, 41% of U.S. land in the contiguous states revolves around livestock.(2) According to the Environmental Protection Agency (“EPA”), the methane produced by agricultural waste (biomass, inedible crop waste, livestock manure) accounted for 36% of the U.S. total methane emissions between 1990 and 2017. While methane represented about 10% of total U.S. greenhouse gas emissions in 2017, the EPA notes the comparative impact of methane is “25 times greater than CO2”.

Having a balanced diet is just one way to reduce your carbon footprint and we invite you to explore the many other ways you can reduce your carbon footprint by experimenting with the MIT Interactive Climate Change Simulator, EN-ROADS. Click HERE to test out the EN-ROADS simulator.

You may be asking how this ties in with my investments and BFSG? Many of our clients are expecting more than just shareholder returns from the public companies in which they invest. They want these companies to have management and leadership in place that is mindful of the footprint that they leave in the world. We agree companies should uphold their basic responsibilities to people and the planet. Furthermore, we believe exposure to environmental, social and governance (“ESG”) factors can meaningfully impact the long-term sustainability of a company’s business.  We are now proud to say that we have several different new ESG investment strategies to meet our clients’ investing goals and objectives. Whether you are passionate about environmental opportunities that will reduce greenhouse gasses or are looking to invest broadly in companies that meet the ESG criteria, we have a portfolio strategy for you.

Disclosure: BFSG does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to BFSG’s web site or blog or incorporated herein and takes no responsibility for any such content. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly. Please see important disclosure information here.

Is Bitcoin an ESG Nightmare?

If some of the Environmental, Social, and Governance (ESG) rating agencies were to apply an ESG risk rating to Bitcoin, it would probably be a laggard and would be a nightmare to assign a risk rating to.

The energy-intensive process by which computers solve complex algorithmic problems to verify blockchain transactions is an undeniable “Environmental” offender, the E of ESG.1 The carbon footprint is massive – Bitcoin’s annual electricity consumption puts it at the edge of being the equivalent of a top 30 country. In one year, it uses around the same electricity as the entire population of Pakistan (c.217m people) and in the developed world more than Holland’s (c.17.5m people).2

Looking at the S (“Social”) of ESG, Bitcoin gets low marks here as well for human rights. For Bitcoin, decision-making is not subject to a centralized authority (i.e., no “censorship”); therefore, anyone can mine bitcoin. A large amount of new Bitcoin comes from Xinjiang, the region in northwest China where more than a million Uighur Muslims and other minorities have been imprisoned in concentration camps. Roughly 20% of the world’s Bitcoin mining takes place in China’s Xinjiang region because costs to mine Bitcoin are cheaper by using coal (another environmental concern).3

Now let us look at the G (“Governance”) of ESG and the fact that the anonymous nature of Bitcoin transactions has the potential to facilitate criminal activity.

There are many environmental, social, and governance reasons not to buy Bitcoin on top of the regulatory reasons and the rampant speculation occurring with some of the cryptocurrencies. It is important to note the technology behind various cryptocurrencies has merit. Imagine a world where transactions costs are near zero, the integrity of the transaction can be quickly verified, the transaction happens almost immediately, and the system is secure from an outside attack. This is the blockchain opportunity and it goes beyond finance. To learn more about blockchain, click here to watch our “Blockchain and Cryptocurrencies” webinar.

BFSG recently launched “Climate Change and Green” investment portfolios built on the fundamental investment principles that have guided our company’s value analysis and interject important environmental factors into our investment process. You will not find Bitcoin investments in our Green Portfolios, but we will invest in the securities of environmentally (green) responsible and sustainable global companies that make an environmental contribution. We are excited to be environmental investment stewards in the search for new green investments and if you are interested in learning more, please reach out to your BFSG financial adviser.

  1. Many governments around the world could eventually regulate cryptocurrency mining and force these miners to use renewable energy to some degree or promote carbon credits.
  2. Source: University of Cambridge, Deutsche Bank, “Chart of the Day: Bitcoin and ESG…”, February 19, 2021
  3. Source: Barron’s, “Bitcoin’s Worrying China Connection”, February 22, 2021

Disclosure: Investing involves risks, including the potential for loss of principal. There is no guarantee that any investment portfolio or strategy will be successful or meet its objectives. Portfolios discussed may not be suitable for all investors. Investments and strategies outlined in this presentation are not provided as personalized investment advice and should be discussed with an advisor prior to implementation.

BFSG does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to BFSG’s web site or blog or incorporated herein and takes no responsibility for any such content. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly. Please see important disclosure information here.