The Value of Blockchain to Sustainability Development
Published: 19 October 2021( 3 minutes reading)
•Blockchain enables company to track their whole supply chain activities which benefits each stakeholder in different aspects. For example, inventory control, data on production, sustainability credentials etc.
•The data collected by blockchain platform is transparent and authentic, which has the potential to gain trust from all stakeholders.
•These data can also be used to enhance existing products, create new ones, or even expand new market and partnerships.
Blockchain technology has been receiving a lot of attention for its innovative features. Its encrypted distributed ledger can be applied to many different areas, one of which is sustainable development. Blockchain has the power to have a tremendous positive impact. Part of this power lies in aligning the creation of network value through participation.
Blockchain enables an incentive system from which the entire network can benefit. The strength of decentralized networks also lies in their transparency. In a blockchain, every transaction is verified by multiple parties and no one can edit the data without alerting the entire network. The result is a transparent, tamper-proof system that has earned blockchain a reputation as “the machine of trust.” Another benefit is its efficiency. Blockchain creates a decentralized technical platform in the distributed network rather than intermediaries or central authorities. Removing middlemen resulting in improving speed and efficiency.
In this article, we will take a look at the ways in which blockchain technology can generate value for sustainability.
Track and Trace
One of the characteristics of blockchain is “being able to track and trace” which can be incorporated into the supply chain. You can track the entire process of a particular product or service from source to shelf, including information about the product like sustainability credentials, materials used, and people involved in the process. This could enable a company to conduct a complete audit of their supply chain and provide real-time visibility into overall productivity. It helps companies in many aspects for different stakeholders. For example, it helps executives with the accuracy of inventory control. It helps consumers with information about the products they are buying. And it is also helpful for producers with transparent data on production, distribution, and sales.
Transparency and Trust
As the importance of ESG metrics increases, so does the demand for reliable data. Blockchain has the potential to make a big positive impact on the transparency of sustainability claims, which is important for gaining trust. For example, blockchain can help companies prove their green credentials by showing how they made their products more sustainable or that they have been able to reduce carbon footprint by X amount. In addition, as blockchain helps the supply chain to be traceable, it also enables transparency in data collection from different organizations and promotes collaboration between them.
Reinvent Products and Processes
As we mentioned earlier that we can apply blockchain into a supply chain, so we will be able to collect a massive set of authentic and well-verified data. Not only can these data be used to evaluate the performance of companies along their entire value chain, but can also be used to enhance existing products, create new ones, or even expand new market and partnerships. For example, companies can use blockchain to create new sustainable products. For example, self-built rooftop solar panels. By using sensors and GPS, they can measure panels’ performance in real-time so they could provide real-time data on the panels’ state. Companies can use this data to enhance existing products or even create new products which are more efficient or have better environmental impacts.
To sum up, blockchain technology has great potential to support sustainable development by increasing the transparency of sustainability claims and sharing data between stakeholders. The data can be used to create new products, develop new markets, and expand the reach of companies’ sustainability strategies. Even if the future of blockchain technology is still unclear, but the prospect of its application in the sustainability agenda is now promising.