According to CCData, the crypto data firm, Ethereum topped a first-grade ESG ranking for crypto, followed by Solana, Cardano and Bitcoin . Bitcoin was ranked last due to its high energy consumption.

CCData published its ESG Benchmark on Thursday, in conjunction with the Crypto Carbon Ratings Institute CCRI. The report evaluated 40 of digital assets that were the most liquid and largest in terms of their size, assessing factors such as security, decentralization and climate impact.

Environmental, Social and Governance ( , ESG ) mandates are becoming more prevalent in investment, particularly among large asset management companies and institutional investors. ESG-related assets under management could reach 33.9 trillion by 2026, a fifth of all investments globally, global accounting firm PricewaterhouseCooper (PwC) forecasted in a report late last year.

Consensus at Consensus revealed that attendees of CoinDesk’s Consensus Conference said crypto should embrace ESG rather than hide from it if it wants to capture institutional money. Notably, asset-management giant BlackRock is one of the biggest proponents of ESG investments.

CCData has created the new scoring structure that is crypto-focused to meet this growing demand.

The report stated that “the ESG Benchmark represents a crucial first step in improving the industry’s resilience to ESG challenges, criticisms and demands from regulators, policymakers, and the media who place ESG requirements as a priority.”

The benchmark assessed environmental, social, and governance risks and opportunities for digital assets. It took into consideration a variety of metrics, including decentralization and energy consumption. The points were then aggregated, weighted, and summed up to get a maximum score of 100 points. This is the final grade, which ranges from AA (best), through E (worst).

The report ranked assets with a BB grade or higher as top-tier.

Ethereum is the only blockchain to have received an AA rating, demonstrating a high level of performance in all three ESG criteria. According to the report this is partially due to the network’s recent switch from proof-of stake technology which reduced energy consumption and rendered miners obsolete.

Solana and Cardano excelled at decentralization. They were awarded a grade of A.

Bitcoin was given a B-grade, with high marks in the social and governance areas but low scores for its energy and hardware requirements.

The report stated that “This grading doesn’t connote an overall superiority. Instead, it is a way to rank digital assets according ESG parameters.” The report said that “[it] provides investors with the necessary tools to make informed choices and allocate resources towards assets with high ESG scores.

Oliver Knight is the editor.