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How Companies can report ESG data effectively using Blockchain?

This article talks about the ESG (Environmental, Social and Governance) score and SDGs (Sustainable Development Goals) which are used by investors to decide if a company is worth putting their money or not and, I also talk about how the integration of Blockchain would be revolutionary in the reporting of ESG data considering the added […]

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This article talks about the ESG (Environmental, Social and Governance) score and SDGs (Sustainable Development Goals) which are used by investors to decide if a company is worth putting their money or not and, I also talk about how the integration of Blockchain would be revolutionary in the reporting of ESG data considering the added transparency, immutability and Digitization Blockchain adds to the system.

Environmental, Social and Governance factors (ESG)

ESG refers to the Environmental, Social and Governance factors used to evaluate a country or a company on how far advanced they are in sustainability.

  • Environmental factors include the contribution a company makes to climate change with cutting of green gas emissions, waste management and energy efficiency.
  • Social factors include labor rights in the supply chain of a company, human rights and general factors such as workplace safety and health. 
  • Governance refers to a set of rules or principles defining rights, responsibilities and expectations between different stakeholders in the governance of corporations. [1]

This score is used by investors to avoid companies that might pose a potential financial risk due to their environmental or other practices.
The world’s largest investor, BlackRock CEO Larry Fink raised the bar by calling on corporate CEOs for their companies to have a social purpose and to be mindful of the impact of their business on society. Moving forward, he said, BlackRock will be keeping a closer eye on how companies behave. [2]

Investors are looking more closely into the ESG funds which are portfolios of equities and/or bonds for which environmental, social and governance factors have been integrated into the investment process.

Sustainable Development Goals (SDG)

SDGs are 17 interconnected Sustainable Development Goals which, according to the UN are the blueprint to achieving a better and more sustainable future for all. 

Most of the rating agencies are now including these scores along with the usual metrics for the performance of the company which adds another major factor for the investors to consider while investing. This puts more pressure on the companies to report their sustainability practices and adopt more transparency in their system.

Klaus Schwab, Founder and Executive Chairman of the World Economic Forum, said in 2019: “We should embrace independent tracking tools for assessing progress under the Paris agreement and the SDGs and implement “stakeholder capitalism” by introducing an environmental, social, and governance (ESG) scorecard for businesses”.

Current Problems with ESG reporting

  • Data Reporting
    Investors are becoming more and more serious about the reporting of data about the ESG score. They wrote a letter to the SEC requesting them to develop a framework about the reporting of data concerning the ESG data.
    Companies are either reporting fragmented data or the data is of very limited use for the investors.
  • Data Accounting
    There is a serious problem with data accounting in companies regarding sustainability and governance which makes it difficult for the investors.
    This problem of data accounting is quite prominent in the supply chain of companies in which the data related to waste management is ignored or is fragmented.
    If the data related to ESG is not reported correctly by the company, then it’s ESG status is Unknown or Pending which means that the investors will be reluctant when investing in the company. 
  • Data Standards
    Most of the time the data reported by companies in regards to sustainability and governance does not meet the standards set by the authorities and this makes it difficult for them to calculate the ESG scores. Although the companies are reporting the data, it cannot be used by the investors as it does not comply with the standards and is basically useless. 

The London Stock Exchange Group’s characteristics of ESG investment-grade data

  • Accuracy: deploy rigorous data collection systems
  • Boundaries: align with the fiscal year and business ownership model
  • Comparability and Consistency: use consistent global standards to facilitate comparability
  • Data Provision: provide raw as well as normalized data
  • Timeliness: provide data to coincide with the annual reporting cycle
  • External Assurance: consider strengthening the credibility of data by having it assured
  • Balance: provide an objective view, including both favorable and unfavorable information [3]

How Blockchain aids in providing better ESG data?

  • Transparency
    With more transparency in the system of a company including the Supply Chain transparency, companies will be able to report the data concerning sustainability practices. This transparency can be achieved very easily with the integration of Blockchain in the supply chain of a company.
    Adding the Blockchain to the supply chain will aid in the integration of data which, as of now, is stored in data silos. With a common platform for all the entities on the supply chain, companies can provide complete transparent data.
    Also, the added transparency in the supply chain makes it easily auditable which adds to the credibility of the data because of the immutable nature of Blockchain technology.
  • Compliance
    Compliance with the government regulations regarding sustainability will aid in a better ESG score which in turn results in more investments. The use of technology is essential in the modern-day complex supply chain of companies.
    With the integration of Blockchain, AI, and IoT to monitor the operations of the supply chain, companies can assure better compliance. All the producer’s data can be uploaded on the Blockchain platform which eases the compliance process. 
  • Digitization of data
    Will all the data uploaded on the platform, the availability of data for the calculation of ESG score is fast and accurate. The data once uploaded on a Blockchain platform cannot be changed or deleted by anyone and with the upload of real-time data, the extraction becomes convenient and fast. [4] [5] [6]

QuillTrace, the right solution

QuillTrace is a Blockchain-based procurement platform by Quillhash which makes the supply chain of any business transparent, sustainable and secure with integrating with the existing Supply Chain systems. Using QuillTrace, companies can report their ESG data more transparently and with data formats complying with the Industry or International standards. With better data related to sustainability and governance about the company, their score increases which opens more avenues for the investors to look into.

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Source: https://blog.quillhash.com/2020/03/13/how-companies-can-report-esg-data-effectively-using-blockchain/

Blockchain

European Central Bank’s president calls for greater regulation of bitcoin.

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According to the Reuters report, the European Central Bank president Christine Lagarde has called for greater regulation of bitcoin and other cryptocurrencies. She linked the use of cryptocurrencies with global criminality and money laundering. ECB chief Lagarde said the digital currency was increasingly being used by criminals worldwide to cover their tracks online and launder money beneath the authorities’ detection. She said criminals are relying on BTC and patchy regulation to move illegitimate money without oversight or supervision.

ECB President calls for more urgency around the global regulation of crypto.

ECB president called for more urgency around the crypto sector’s global regulation and more effort to develop common standards to prevent criminals from abusing digital currencies as a backdoor to money laundering and other nefarious activities. Highlighting the “funny business” going on in BTC markets, Lagarde described cryptocurrency criminality as “totally reprehensible.” “BTC is a highly speculative asset, which has conducted some funny business and some interesting and reprehensible money laundering activity,” she added. Currently, crypto regulations remain in a grey area in most countries, but regulators are catching up gradually. 

Crypto regulations begin to tighten up after bitcoin’s massive rally. 

The most notable example of crypto regulation has been in anti-money laundering, with exchanges and other crypto services now adhering to standardized AML requirements. The news coincides with a rally in BTC prices in recent months, spurred on by an increasing mainstream interest in BTC tokens. This has led to further calls for regulation worldwide, amid fears that more speculators could end up losing all of their money. Combined with soaring rates of fraud and concerns over money laundering and other criminality running through BTC, Lagarde said the time for light-touch regulation of the digital asset was over.

Source: https://coinnounce.com/european-central-banks-president-calls-for-greater-regulation-of-bitcoin/

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Why this on-chain analyst thinks Bitcoin whales aren’t institutions

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While most had high expectations from the crypto-market for the year 2021, it’s safe to say that the market has well and truly exceeded these expectations. Not only did the world’s largest cryptocurrency, Bitcoin, breach the $40,000-mark, but the industry’s cumulative market cap also went past $1 trillion.

Source: CoinMarketCap

The market and its largest cryptocurrency’s movements make for interesting reading, especially when its charts are observed. In fact, price charts noted an almost vertical movement by Bitcoin, suggesting that this bull run has far outpaced the bull run of 2017.

In such a case, the common perception is that the reason Bitcoin has seen such immense buying power is because a majority of this buying has come from institutions. The same sentiment was highlighted recently by Anchorage Co-founder Diego Monica who, while noting that institutions have more tolerance for volatility and are professional investors, said,

“This rally is absolutely followed and made by the institutions.”

As a result of this, investing in Bitcoin becomes less about following a fad and more about making an allocation to an uncorrelated asset class for purposes relating to capital preservation and appreciation. In fact, many have suggested that at current price levels, Bitcoin might even be too expensive for non-institutional investors to enter the market.

However, on-chain analyst Willy Woo isn’t so sure that this bull run is solely institutionally-driven. On a recent episode of the Unchained podcast, he said,

“We thought it would be, and right now the thing is, I don’t actually think that it is.”

According to Woo, Bitcoin’s bull run is being driven by the institutional narrative of institutions getting behind the idea of Bitcoin and crypto. While institutions have been suggesting that they are going to deploy funds, the majority of them are still yet to do so, he added.

In fact, it may be this validation from institutions that brought in many high net worth investors to this space, with family offices buying in at higher price levels.

Woo explained that a combination of things has contributed to his certainty about family offices making capital allocations towards crypto, including first-hand conversations with people in the space disclosing their intent to do so.

That being said, the main part of such certainty comes from his observation of capital flows on-chain. He explained that the value of withdrawals on exchanges is increasing, which at first glance, seemed to signify that institutions are present. However, a closer examination of clusters of wallet addresses pointed to the fact that a single entity controls multiple addresses.

“It’s not corporation scale where you’re talking tens of thousands of Bitcoin that are being held,” he claimed, adding, “The number of whales holding thousand Bitcoins or more is skyrocketing, and so are the smaller allocations of around 100 and 250.”

Source: https://ambcrypto.com/why-this-on-chain-analyst-thinks-bitcoin-whales-arent-institutions

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ETH Price Analysis [WoW]: Ethereum Price Trading at key Pivot, Oscillators Indicate Strong Momentum Despite Overbought Conditions

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  • ETH price breaking key weekly resistances and confirming them as support.
  • Breach of ETH price discovery is to be backed with increasing volume.
  • Oscillators suggesting strong momentum still present despite overbought conditions.

ETH price is currently trading at a true pivot where a bullish weekly candle close will greatly increase the probability of breaking into price discovery. Price action has been making consecutive higher highs and higher lows since it’s March 2020 Bearish Expansion. The projection remains bullish until proven as this is a strong weekly uptrend.

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ETH Price Analysis: Weekly Chart 

ETH price Analysis weekly
ETH price Analysis weekly

Preluding to the chart above, a strong uptrend is evident with continuous acceleration leading to a potential parabola. The 21 MA has provided a reliable Dynamic Support that has led to a strong Bullish Volatility Expansion from the lows. 

Key Weekly S/R levels have been breached with conviction; price action has confirmed S/R Flip retests along the way with further Bullish Volatility Expansions. ETH price trading in such a volatile range is deemed to have strong swings thus evidently, the volume profile has been increasing. 

Volume influxes are a key indication of a strong uptrend as bullish volume follow through is what drives price action. As evident on the chart, there has been a Volume Climax Node. Bearish volume is still below average as the current weekly candle trades open. For further follow through, an influx in volume is required to break the All-Time High with persuasion. 

The current shape of the weekly candle is of a Bullish Hammer; however, this is not confirmed until an official close. There has been a strong buy-back from the S/R Flip Retest which is indicative of strength. The next weekly candle open will be deemed telling of the overall direction of the trend. 

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Now holistically assessing the oscillators, momentum is still intact with the bulls, epically how the stochastics have been behaving.  

ETH Price Analysis: Weekly Stochastic oscillator

ETH price Analysis weekly: Stochastic oscillator
ETH price Analysis weekly: Stochastic oscillator

As evident, each and every bull cross has led to a substantial Bullish Volatility Expansion in price action. The stochastic helps to monitor momentum in the prevailing trend. It can remain trading in overbought regions for an extended period of time, epically in a strong up trend. Ethereum has an immediate Bull Cross coming to fruition, this will be confirmed on the next weekly candle close. Holding true will store momentum for the break of the All-Time-High. 

ETH Price Analysis: Weekly Relative Strength Index [RSI]

ETH price Analysis weekly: RSI
ETH price Analysis weekly: RSI

Furthermore, observing another key oscillator is the RSI that is responsible for measuring the speed and velocity of price action. Preluding to the image above, Ethereum’s RSI is considered to be in overbought regions however back testing swing high. This is considered to be very bullish if respected, breaking down will mean a reversion in price action. As long as the RSI and Stochastics maintain their respective bullish control zones, ETH price will remain very bullish as it comes close to price discovery, 

What to Expect for Weekly ETH Price ?

In conclusion, Ethereum price remains quite strong as it is approaching its All-Time High. Price action has been maintaining consecutive higher highs and higher lows. This next weekly candle close will be highly indicative of the overall direction. Both key oscillators are suggesting that the momentum is stored with the bulls. A true break is likely to be backed with increasing volume as price action enters price discovery. 

Hope this article helps in the preparation for the next volatility expansion in Ethereum. Follow us at tradingview for more in detail crypto price analysis. 

To keep track of DeFi updates in real time, check out our DeFi news feed Here.

FBC13

Source: https://coingape.com/eth-price-analysis-weekly-price-oscillators-suggest-strong-moomentum-overbought/

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