Jacobi Asset Management has designated its Jacobi FT Wilshire Bitcoin ETF, launched in Europe, as an ESG (Environmental, Social, and Governance) investment through its classification under Article 8 of the European Sustainable Finance Disclosure Regulation (SDFR).In an article by Bloomberg on August 29th, Jacobi CEO Martin Bednall discussed the full decarbonization project of the ETF, which includes investment in renewable energy certificates (REC).

The goal of this decarbonization strategy is to attract ESG-aligned investors to the ETF without environmental concerns. To achieve this, Jacobi, along with its partners, quantifies the energy consumption associated with Bitcoin, the underlying asset of the ETF, and purchases the necessary RECs, which are backed by blockchain technology.

Kirsteen Harrison, the Environmental Manager at Zumo, the firm responsible for the deployment and compliance of the RECs, praised the project as a significant milestone in the industry that could shape global policies.

“The decarbonization of crypto is one of the most pressing challenges facing the nascent digital assets sector, and there is increasing pressure on all businesses to have credible plans to decarbonize. We’ve been working closely with Jacobi Asset Management to help them build out an ESG-aligned, future-proofed crypto offering for their customers.”

RECs serve as proof that energy has been generated from renewable and environmentally friendly sources, such as solar, wind, or hydropower. An interesting feature of RECs is that they are automatically retired once consumed by the final consumer.

Only regulation can stop the US

While Jacobi’s approach has received praise, some critics argue that due to Bitcoin’s high energy intensity, the firm should purchase a significantly larger amount of RECs than the total energy consumed by Bitcoin.

Jacobi’s spot BTC ETF was launched on the EuroNext Amsterdam Stock Exchange, making it Europe’s first spot BTC ETF, as the US market faces challenges with the Securities and Exchange Commission (SEC).

In Europe, with the environmental aspect addressed by RECs, climate activists may view investments in a US spot BTC ETF as environmentally friendly, leaving only regulatory obstacles for executives.

Despite multiple applications from major asset management firms, the SEC has not yet approved a spot BTC ETF in the United States, citing concerns about market manipulation.

It has been argued that SEC approval would trigger the next bull run, with fresh liquidity entering the market and restored investor confidence in the sector.

In a recent development, a US Federal Court ruled in favor of Grayscale’s spot BTC application, overturning the SEC’s “rejection” and sparking conversations about potential approval as bullish sentiment grows.


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