Building Blocks with blockchain

27th October 2017


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  • Sustainability

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IEMA

With blockchain’s potential to embed trust into digital and physical asset transactions, Robbie Epsom asks what role it could play in achieving the UN sustainable development goals

Blockchain has been touted by some as a ground-breaking new technology, on a par with the internet, that will revolutionise the financial system, remove the need for centralised institutions (such as banks and regulators), save the environment, the rainforest, the healthcare system and even free speech.

These might sound like unrealistic, far-reaching claims. However, with a quick internet search one can find numerous studies, or real-world projects, attesting to the progress being made in each of these areas. Granted, some have had more success than others, but the ambitions are there.

Road to renewables

Blockchain is essentially the algorithm that underpins bitcoin. At its core, blockchain is a decentralised network of digital records or ‘ledgers’ linked to a particular asset, whether that be a bitcoin, a food product or even a written blog. Blockchain keeps track of every transaction made and its accuracy is guaranteed through the combined independent verification of the entire network.

Information on the history of ownership, financial data and any other important information is assigned to a unique signature known as a ‘hash’. If someone alters that information, that unique code no longer works, ensuring authenticity.

The sustainable development goals (SDGs) are a universal call to action to end poverty, protect the planet and ensure that all people enjoy peace and prosperity. There are 17 goals, all of which are underpinned by more tangible targets requiring global co‑operation, fast action, transparency, better management of resources (or assets) and trust. These goals were created in response to major sustainability challenges, such as resource scarcity, waste generation, greenhouse gas emissions, water scarcity, poverty and inequality. With blockchain providing greater transparency, many existing positive actions trying to tackle these major issues can start to gain traction.

Blockchain is already making a big impact. For example, the UN’s Kimberley Process Certification Scheme, set up following a series of reports exposing the link between the diamond trade and the financing of conflict, is piloting blockchain technology to create a seamless and continued global process. This is helping to achieve SDG 10 – Reduced Inequalities by verifying that diamonds are, in fact, conflict-free.

Tackling poverty (SDG 1) and inequalities (SDG 5 – Gender Equality and SDG 10 – Reduced Inequalities) are important aims of the SDGs. BanQu is using blockchain technology to provide farming communities in developing countries with an economic ‘identify’ on the blockchain, regardless of how little land or income they might have and regardless of gender. This not only allows them access to credit but also opens them up to the global economy.

As a life-cycle assessment consultant, one of my favourite applications of blockchain is to monitor the procurement of raw materials through the supply chain by ‘asset tagging’ them with sustainability data. This creates a tracking system that verifies a product’s source data as it moves across a supply chain, sending automated alerts about unexpected deviations that could signal potential tampering or environmental conditions that might pose health and safety issues. This would allow for full transparency and traceability throughout the supply chain, ensuring that products are actually sourced in line with their sustainability claims (for example, conflict mineral legislation, such as 3TG). It would also allow transparency across a product’s life-cycle, supporting SDG 12 – Responsible Consumption and Production.

This concept is being put into action by UK-based company Provenance, which has piloted tracking fish through the supply chain to guarantee that sustainable claims aren’t falsified as the product moves from the point of being caught to the supermarket shelf.

Customers looking to buy ‘sustainably caught’ fish can be sure that the claim associated with that fish hasn’t been duplicated and their purchase is supporting the sustainable fishing industry. According to Provenance, this works by allowing traditional fisherman to send a simple text message to register a catch; this creates a new ‘asset’ on the blockchain with a unique ID and every time that fish product moves through the supply chain, the blockchain ID is sold with it. This unique ID can also have other environmental data attributed to it, such as life cycle assessment data, along with relevant audit information to demonstrate the fish were caught legally and sustainably. This supports SDG 12, and SDG 14 – Life Below Water.

Eliminating waste

A German company called Slock.it is developing a ‘Universal Share Network’ powered by blockchain and using the Ethereum Computer. This will allow underused assets such as temporarily vacant apartments, office space, shipping containers or machinery to be used, creating an automated and fully verifiable infrastructure for the ‘sharing economy’, which also contributes towards SDG 12.

In October 2016, Wal-Mart partnered with IBM to use blockchain to track a ‘packaged produce’ item in the US and a pork product in China. This allowed it to obtain vital data for each product on how and where the food was grown or reared and who inspected it. When a contaminated product is identified, they can find exactly which farm it originated from and recall only those products affected rather than the entire range; this will save thousands of tonnes of food waste (SDG 2 – Zero Hunger).

The range of applications speaks volumes for the potential this technology has to both speed up and instigate action towards the global sustainability goals. Siemens’ collaboration with LO3 Energy, for example, already demonstrates action under SDG 7 – Affordable and Clean Energy. This could transform the market for localised energy generation, as it allows local energy networks that can separate from the main grid (during extreme weather events, for instance). It could also significantly reduce costs and encourage uptake of renewable energy and storage technology. This could potentially be done through existing technology, but blockchain provides the ‘trust’ that allows the trading of energy to take place outside a decentralised system.

It’s also worth considering the campaign in the US by the residents of Flint (Michigan) to combine blockchain with the internet of things to build more trust into their water network. This is an example of SDG 6 – Clean Water and Sanitation, and should ensure there is never a repeat of the contamination emergency of 2014-16.

Cards on the table

These examples only scratch the surface of blockchain’s potential to help achieve the SDGs. To meet the goals, we must collaborate on a global level and with ‘trust’ fully integrated. I think blockchain might be the tool to help us do this.

There are many other things that need to happen (from policy to corporate leadership action and technological advances) to tackle global sustainability challenges. But one thing is clear, blockchain has the potential to be a very effective tool for sustainability and will enable faster and more transparent action.

As global supply chains start to do business through the decentralised blockchain network, it may even allow progress in sustainability to take place faster than policy and trade agreements.

With all cards on the table, companies and individuals can hold their supply chain accountable, and the power for change is put in the hand of the customer.

Robbie Epsom is WSP principal consultant for environment and sustainability

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