Blockchain, the missing link for reporting?
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Big companies claim most of the business headlines. Small firms are the ones we patronize every day.
That’s why I was triply compelled by one of the many blockchain technology pitches crowding my inbox this summer. Not only does it involve an app that could disrupt the way companies report on progress against sustainability goals, but the Singapore developer behind the tech, Perlin, signed what amounts to a referral relationship with the 100-year-old International Chamber of Commerce — one that will connect Perlin with more than 450 chambers of commerce around the world that are particularly interested in addressing climate change. I’ll get to the third reason in a moment.
Some details. The arrangement is a service coordinated by ICC’s new Chambers Climate Coalition, launched in spring. By signing on, a chamber commits to advocating for climate action consistent with the Paris Agreement’s goal of limiting global average temperature increases by 1.5 degrees Celsius, and to support the separate goal of net-zero emissions globally by 2050. Members from Brazil, Chile, China, India, Nigeria, South Africa and the United States (among others) already have signed on — lagging national commitments notwithstanding. These organizations represent companies large and small, which is refreshing as the small-business community will have a crucial role to play in mitigating climate change.
Where does Perlin’s technology come in? The software company uses a blockchain ledger to track the provenance of materials and goods and stuff, so it should help companies large and small track and report on what they’re doing more easily and frequently. This, in turn, will help the represented regions and countries have a more granular picture of how progress is going.
Wait, what? The big idea here is that blockchain — which is really just a digital system for collecting, correlating and verifying data that’s pretty tamperproof — could help companies and governments move beyond the relatively infrequent reports they make today (annually, if we’re lucky) and toward a scenario in which they could monitor and disclose how they're doing on an ongoing basis. It's something consumers increasingly want to know.
"We would love to have conversations with everyone who has made a commitment," Sun said.
This approach could have particular relevance for getting at information deep in the supply chain. You know, the sorts of metrics that would be really useful for assessing corporate progress against the Sustainable Development Goals.
In Sun’s dream scenario, companies would disclose progress against environmental, social and governance commitments just as they would any other key performance indicator. "You’re going to have good quarters and bad quarters," he said.
I mentioned there was a third reason I’m following the development: Sun is spearheading a new initiative called Global Ledger, which launched this summer at a World Economic Forum gathering in Dalian, China.
The aim is to aggregate data from public and corporate sources — information collected from drones, cameras, nanosatellites, sensors and so on — and store it using blockchain so that it’s verified and very difficult to game. It also would allow for far more, decentralized sources. And it would allow smaller companies to access data that they might not have found it easy to unearth previously. The co-founder of the effort is Helen Hai, a United Nations Goodwill Ambassador for industrialization in Africa. Both Hai and Sun are part of the WEF Young Global Leaders Forum.
"Young people today want more than just activism, they want participation," Sun told a WEF correspondent in July. "So if they are able to participate by securing this distributed ledger by running a node — a way of participating in the blockchain process — by also lobbying and pressuring for more data to be disclosed, I feel that it allows the young people to do more than just strike."
Of course, this is all very nascent and there are many, many, many pilots around the world using blockchain for some sort of sustainability application. But the notion of being able to access this data on an ongoing basis — rather than just once a year — is hugely compelling.