Galaxy Digital (GLXY) has released its first-ever sustainability report, revealing that 68% of the firm’s carbon footprint comes from its bitcoin mining operations.
The investment firm’s report reiterates its longer term goal of using over 80% mix of sustainable energy in its bitcoin mining that it first committed to in its Q1 earnings announcement in February.
It also raises the bar for sustainability and transparency among other crypto firms as the industry reels from losses.
With a total current market capitalization of $920 billion, the crypto market has sold down by 58% year to date from $2.2 trillion, compared with a loss of 24% for the S&P 500 and 32% for the Nasdaq.
“One might think it’s strange that we’re focused on a sustainability report in the midst of what I’d call a class 3 hurricane,” Michael Novogratz, founder and CEO of Galaxy Digital, said during a press briefing in reference to current financial terms.
“Every once in a while I tend to want to step back and think in the long term. We’re building a company that we hope exists a long time past the time we work here. And we think getting the foundation right is really important,” he said.
ESG is an ethical framework applied to investing based on an asset’s environmental, social, and governance sustainability. ESG funds set records in 2021, according to Bloomberg Intelligencewhich estimated in February that these assets could reach $41 trillion by the end of the year.
But without clear-cut ESG disclosure requirements, many funds benefit from touting their “socially responsible” or “green” commitment without necessarily delivering those outcomes. Galaxy Digital’s report is an effort to provide that transparency, breaking up its findings into the three ESG categories.
Using 17 sustainable development goals laid out by the United Nations and an emissions test done by a third party, the report shows that Galaxy Digital’s total carbon footprint was 6,554 metric tons of carbon dioxide equivalent (mtCO2e) in 2021 with 31% coming from non- bitcoin mining activities.
For context, multi-national investment company BlackRock emitted 23,044 mtCO2e in 2021, but dropped the number to 6,614 mtCO2e by using energy attributable certificates (EACs).
In terms of governance and social responsibility, Galaxy’s diversity, equity and inclusion strategy is overseen by its board of directors, an ESG steering committee, and an ESG dedicated committee.
On the diversity front, a quarter of its executives are female — better than the US industry average — while 29% hold non-leadership positions. A third of its total workforce identifies as Asian, Black, LatinX and Two or More Races. It has 281 employees, 82% who are based in the United States, with a 11.8% turnover rate.
Along with implementing a diversity policyGalaxy has established a number of employee resource groups such as those for people who identify as Women, Asian and Pacific Islander, and LGBTQIA+.
The report also highlighted how the crypto-native governance structure — decentralized autonomous organizations (DAOs) — could prove a breakthrough in corporate governance. As it pointed out, these organizations offer “flat organizational structure” that could provide transparency breakthroughs in governance.
Galaxy holds $2 billion in assets under management as of the end of September across five business lines, including trading, asset management, investment banking, crypto mining, and venture capital (215 portfolio companies or more). The firm is also awaiting approval by the SEC to list in the US
Year to date, the company’s shares, which trade on the Toronto Stock Exchange, have fallen more than 70% from $24. Over the last 5 days, the stock is down 3% and changing hands at $6.75.
David Hollerith is a senior reporter at Yahoo Finance covering the cryptocurrency and stock markets. Follow him on Twitter at @DsHollers