ESG equities and Bitcoin: responsible investment and risk management perspective
Year: 2023
Type: article
Abstract: Bitcoin is often criticized for excessive electricity consumption and resulting carbon footprint. We use wavelet analysis to examine its interconnectedness with environmental, social, and governance (ESG) equities. The results indicate their comovements are low. We further compute the optimal ratio and show that Bitcoin significantly reduces portfolio risk when combined with green stocks. Our findings are robust to alternate specifications. From an environmental perspective, this investment strategy offsets the negative impacts of bitcoin mining, providing a remedy to sustainability-conscious investors' dilemma of the economic payoff of Bitcoin versus adherence to green investment philosophy.
Author: Yosuke Kakinuma
Institution: Chiang Mai University
Language: English
Subfield: Finance
Domain: Social Sciences
SDG: Climate action
Open Access status: green
OpenAlex ID: W4386833441