Can blockchain technology be used to support sustainable business practices? The answer is an unequivocal yes.
Long associated with cryptocurrency, blockchain technology has many uses across industries. These include banking and financial services, healthcare, insurance, retail, and a host of other sectors.
A blockchain makes it possible to securely trade almost anything of value on a network.
Blockchain technology is a system of recording information in a manner that makes hacking to gain access to it practically impossible.
The reason for that is the fact that the records for any transactions need to be added to a very large number of ledgers for them to be validated and recorded.
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How blockchain can support sustainable business practices
The central tenet in ensuring sustainable business practices is the concept of a circular economy. This entails:
- Minimizing waste
- Reusing products
- Recycling materials as far as possible
Blockchain can be of tremendous help in this by ensuring transparency and traceability. This helps businesses sanitize their supply chains by virtually eliminating fake and counterfeit products and thereby minimizing the negative impact that would have had on limited natural resources.
Blockchain technology has a salutary impact on all stages of the supply chain including:
It helps companies optimize processes and enhance productivity. This has a very positive impact on encouraging sustainable business development in terms of waste reduction and the conservation of scarce resources.
Principal ways in which blockchain technology aids sustainable business practices
In researching an answer to the question “How can blockchain technology be used to support sustainable business practice ?’ we found five key qualities of blockchain technology that make this possible.
1. Decentralized control
As blockchain technology is all about decentralized control as well as decision-making, no single person will be able to exercise undue control over the system.
This ensures seamless and efficient business transactions, thereby significantly reducing waste and inefficiency, which in turn leads to a sustainable business ecosystem.
2. Enhances transparency and thereby promotes sustainable growth
Keeping an account of greenhouse gas emissions by business organizations can be done very effectively with the help of blockchain technology that tracks and generates reports about emission reductions. This can help prevent double counting that distort the figures reported.
Stricter adherence to environmental best practices can thus be achieved with the help of blockchain technology.
3. Blockchain technology helps promote green finance
Blockchain technology can help businesses achieve their sustainability goals by enabling crowdfunding and peer to peer financial transactions to be leveraged in aid of climate action initiatives.
That will help win over the trust of a much larger number of investors who could be provided with real time information about how their funding is being used.
4. Helps with recycling programs
Blockchain technology can be used to encourage recycling. This can be done by putting in place a recycling program by organizations, using the blockchain to provide financial incentives to people in the form of cryptographic tokens.
These could be given in exchange for depositing recyclable materials like bottles and containers. Not only will this system help track things like cost, volume, and earnings, but also allow one to get a handle on the environmental impact caused by an individual or a business.
A case in point is an organization called the Plastic Bank that is using both blockchain and IBM cloud technologies to come up with a technology that helps in monetizing ocean plastic.
Plastic Bank turns plastic into currency by opening plastic collection points in third world countries.
It works by letting people deposit used plastic in exchange for cash, the ability to recharge a phone and so on.
Another blockchain technology-powered application called RecycleToCoin (RTC) offers incentives for recycling plastic, aluminum, and steel cans.
It has done that by joining hands with global offset and reward partners and by utilizing the collection points accumulated via the app. The more one recycles, the more incentive they get.
5. Eliminating food wastage
Much of global hunger would be eradicated if food wastage would be eliminated. Blockchain technology can now be used to achieve just that.
A blockchain-based app called Food Trax, for instance, tracks food right from its origin to the shelves to ensure that there is no food wastage along the way, on account of pool storage and inefficient handling.
It does so by interlinking data temperature loggers and equipment measuring and monitoring for an innovative solution that addresses every concern across the supply chain in a most transparent manner.
Blockchain and sustainability make perfect partners
The world realizes the imminent danger the deteriorating global environment poses to our very survival. People everywhere want to ensure that sustainable business projects become the norm globally.
This is where blockchain-enabled processes can help by making transactions highly efficient and therefore more sustainable.
As environmentally sustainable development projects find favor with investors, there is every reason for businesses to turn to blockchain technology to help them suitably improve their processes.
While there is no doubt that blockchain technology can improve sustainable business practices in several ways, it will require an across-the-board improvement in digital infrastructure for it to have a really substantial impact.
Blockchain-powered sustainability solutions involve applying a value chain dependent outlook to business that can help inculcate sustainable practices across the supply chain as well as manufacturing process.
Once implemented, these sustainability practices can be demonstrated to not just the end users, but also financial regulators and policymakers.
Implementing sustainable business processes is a work in progress around the world and requires all hands-on deck for it to succeed globally.
Leveraging blockchain technology is only one of the many initiatives that need to be taken to get the job done. That being stated, it is an incredibly significant one that will have an extremely far-reaching impact on ushering in an era of sustainable economic development.
What’s more, by using this technology, one will obtain a very precise idea of the exact rate of progress being made, thanks to its ability to track with pinpoint accuracy.
Going forward we will find that blockchain technology will be one of the most widely deployed tools used by business organizations to ensure the best sustainable development practices.