How Blockchain Can Power Sustainability
Technology advancements in recent years are presenting significant potential to bring transparency to sustainability. One particular Technology is gaining momentum as an innovation that can drive sustainability in the global supply chain: Blockchain.
What is Blockchain Technology?
Essentially, Blockchain is a system of recording information in a way that makes it difficult or impossible to change or cheat the system. In more technical terms, Blockchain is a digital ledger of transactions (or ‘blocks’) that is distributed across a network of computer systems (the ‘chain’).
A good analogy to Blockchain is a Google Doc shared across multiple users in a network. The document is distributed instead of copied and transferred. This creates a decentralized distribution chain that gives all users access to this unique document, and records any change made to it.
So how can Blockchain help advance sustainability? Here’s how:
Blockchains are best known for their role in cryptocurrency systems such as Bitcoin. However, blockchain technology can be used in many different industries, including the ability to truly track a company’s sustainable practices. Let’s explore how.
Trust & Traceability
Having a completely de-centralized network means that you can trust the information kept on record as there is no centralized authority. All transactions records are stored in blocks or nodes. These blocks contain data that is cryptographically connected to the subsequent blocks. This means you cannot change the information in a block without changing all of the blocks before and after. How does this translate to sustainability? Blockchain can increase traceability and transparency of material supply chain, and improve visibility and compliance over outsourced manufacturing.
Blockchain is stored across multiple networks so the data is not held in one place only. Because blockchains are immutable, the data stored cannot be reverted or tampered with. Any malicious activity will be rejected by other nodes on the network, making it very almost impossible to hack.
Blockchain & Sustainability
How does this correlate to sustainability? By and large, transparency. When blockchain is used, a verifiable and trusted record is created. All the details of any transaction between companies is easily established and confirmed.
This means that whatever claims a company makes in terms of their sustainability practices can be researched and corroborated. There is nowhere to hide using blockchain and it can and will keep companies and corporations honest and open about business practices. This makes it easier for consumers to make educated and sustainable choices with their purchasing power, thus influencing more companies to make sustainable practices permanent.
The verified record created in blockchain also makes it easier to track issues within a company’s supply chain, thus creating opportunities to improve processes that could impact the amount of resources used, help achieve a smaller carbon footprint, and improve waste disposal, to name just a few.
Yes, optimizing your supply chain helps with the bottom line, which all businesses want. But in the end, the innovation that blockchain can assist with has the potential to help provide much needed transparency to every business and consumer.
Further reading and information on blockchain technology can be found here.