Blockchain for Sustainability – ushering in an era of hope and responsibility.193 countries coming together in agreement on a comprehensive and ambitious development agenda for the people and planet by 2030. Launched by UN in 2015, the Sustainable Development Goals (SDGs) are a set of 17 global goals aimed at transforming our world by 2030.
These goals are the greatest needs of our time and are a challenge to address. Through goals such as reduction in hunger and poverty, reduced inequality and responsible consumption and production, SDGs strive for a better world and demonstrate a unique opportunity for businesses to create a lasting impact on our world through blockchain sustainability.
In order to achieve these goals, there is a collective action required across governments, society, private sector, individuals and communities and it should be matched with necessary resources, innovations and partnerships. The private sector has a critical role to play in contributing to this global development agenda. The private sector not only constitutes multinational companies and industries but also the SMEs, social enterprises and start-ups. Innovation is a must in this sector to achieve the 169 ambitious targets making up the 17 SDGs.
The private sector will be crucial to delivering the SDGs, and it stands to benefit from a potential US$12 trillion worth of business opportunities, which could create almost 380 million jobs by 2030
SDGs – Value for Business
SDGs offer a major opportunity to businesses to shape, communicate and report their goals, strategies and activities thereby realizing several benefits. Along with a growing demand for transparency and accountability, blending profit with purpose gives a competitive edge to meet expectations of consumers, investors and employees. 1According to the McKinsey Global survey, the organizations that generate value from their sustainability programs follow a set of distinctive practices to set out aspirations and targets. These organizations prefer to make sustainability an element of their corporate culture and educate employees to integrate sustainability into their work. They collaborate with customers and suppliers on addressing sustainability issues, make their products more sustainable and account for sustainability factors in evaluating suppliers.
According to a survey conducted by Morgan Stanley investment banking, 78 % of institutions that consider sustainable investments are targeting alignment with SDGs as a part of their investment.
What are these Sustainable Development Goals?
Our planet faces economic, social and environmental challenges. The Sustainable Development goals provide a blueprint for a sustainable future by setting objectives and global priorities for 2030 by placing it as the heart of a corporate strategy.
These objectives revolve around ending poverty in all forms throughout the world, achieve food security and improved nutrition, promote sustainable agriculture, promote inclusive and sustainable economic growth and decent work and growth for all. Though there has been much effort into meeting the SDGs, there are certain barriers and good governance has been identified to address these challenges. Blockchain technology can be a game-changer in achieving these goals by 2030.
Blockchain and Sustainability
Blockchain technology enables governance. It is a decentralized platform that enables exchange of information on a common shared platform with built in transparency and accountability. Smart contracts and consensus mechanisms ensure execution of processes with proper governance.
Distributed ledger Technology (DLT) today is an evolution towards the Web 3.0, the Internet of Value. Blockchain is a specific type of DLT that involves timestamped blocks of transactions linked through cryptographic hashes. The decentralized architecture provides security, privacy, integrity, transparency, accountability, authenticity and robustness. It eliminates intermediaries and provides a high degree of operational efficiency.
Challenges in Traditional systems
- Manual based recording leads to lack of trust and is labour intensive
- Data needs to be updated by several stakeholders on a trustworthy basis
- Avoid involvement of third parties and intermediaries
- Traditional databases are not secure and vulnerable to malicious attacks
Blockchain helps SDGs in the following ways
- A collaborative platform among the stakeholders with a layer of transparency and traceability
- Immutable digital ledgers ensuring collection and sharing of tamper-proof data, eliminating fraud and intermediaries
- Validation of actions through smart contracts and consensus mechanism.
Blockchain and Sustainability
The end-to-end visibility on a common shared platform advocates transparency and builds trust among stakeholders in the value chain
The ability to track and trace products from source to consumption and validating the fair and sustainable practices followed fosters sustainability
Digital identity of the product assures authenticity and provides a single source of truth across the entire value chain, making each participant accountable for their actions.
Tamper-proof data with immutability and encryption ensures security and robustness of data.
Blockchain and Innovation
- Smart Contracts assures accurate collaboration among stakeholders with execution of activities based on consensus
- IP protection through open-source licensing, record keeping which are timestamped to avoid tampering and IP infringements.
- Open Data with a decentralized shared platform, assuring data protection and privacy among stakeholders
- Regulatory compliance with timestamped transactions enabling an audit trail of the product.
Leveraging Blockchain towards Sustainability with SDGs
Blockchain applications that contribute to a few of the UN Sustainable Development Goals
SDG1- No poverty
Access to financial services is the most common ways to reduce poverty especially for the smallholder farmers. Blockchain helps to increase efficiency, traceability and transparency of these financial processes. Blockchain provides authentication and registration of transactions without intermediaries. Financial inclusion can be accessible with mobile and internet with blockchain based solutions.
SDG2 – Zero Hunger
The traceability in blockchain helps to build sustainable food production systems. Supply chain optimization and reduction of food wastage can be targeted with end to end traceability. The adoption of sustainable agriculture practices to achieve effective and productive yields could foster enhanced productivity. It would be crucial to focus on the supply chain and primarily on proper sourcing.
SDG3 – Good Health and Well being
Blockchain traceability provides end to end transparency of the food supply chain. Track and Trace systems and capturing real-time data at all stages in the supply chain addresses problems due to food recalls and ensures safety of end consumers. Consumers are assured of safe and healthy food with adoption of sustainable practices.
SDG8 – Decent work and Economic Growth
Blockchain traceability solutions build efficiency into food supply chains. The end to end visibility and streamlining of processes and automated workflows help to enhance productivity at reduced costs. This promises economic growth and sustained livelihoods for the producer community.
SDG12- Responsible Production and Consumption
Blockchain traceability builds resilience in the food supply chain. The adoption and tracking of crop agronomy and sustainable practices in the first mile helps to realize sustained food production, increasing resource efficiency, preventing environmental degradation and promoting sustainable lifestyles.
SDG13 – Climate Action
Blockchain technologies will play a critical role in the path to decarbonization. The decentralized, collaborative and shared platform assures transparency and accountability in the supply chain. Blockchain will help in integrating climate changes into national policies, strategies and planning.
The Sustainable Way Forward
The food and agriculture system faces several challenges related to demand, supply, regulatory and climatic distress. Harnessing the power of blockchain can be a gamechanger to accelerate the SDG targets. The peer-to-peer platforms for exchanging data in a trustworthy, sustainable, accountable and transparent manner will be a way to fulfil the UN Sustainable Development Goals.
TraceX’s blockchain traceability platform has been helping clients achieve end to end traceability in their food and agriculture value chains and reducing the environmental impacts with the adoption of sustainable practices in production. It provides a connected supply chain eliminating intermediaries and building a trusted ecosystem.
The farm management solutions enhance productivity, lowers production costs, allows optimum usage of inputs, provides quality control with traceability and ensures resilience in the food supply chains.