ESG Ratings for Blockchains and Cryptocurrencies

Abstract

This paper examines whether the release of ESG ratings for blockchains and tokens influences investor behavior in cryptocurrency markets. In October 2021, Green Crypto Research (GCR) published the first systematic ESG ratings for digital assets, addressing growing institutional demand for sustainability information. Building on Ammann et al. (2018), who documented increased flows into high-ESG mutual funds after Morningstar’s ESG rating release, we use an Event Study methodology to analyze abnormal trading volumes before and after the GCR announcement. We find no significant increase in trading activity for highly rated blockchains or tokens, providing no evidence that investors reallocated funds toward higher-rated cryptocurrencies. These findings are relevant for investors evaluating ESG integration in digital assets, for policymakers considering sustainability disclosure in crypto markets, and for researchers studying the intersection between ESG and emerging financial technologies.