Could Blockchain Boost the Triple Bottom Line Worldwide?

As corporate social responsibility (CSR) now often drives business as usual, corporations are under increasing pressure to clean up their operations from inside out. To maintain stakeholder trust, companies need to regain control of their supply chains, ensure their operations adhere to ESG (environmental, social and governance) standards, and become far more transparent than they had in the past.

The lack of resources, inability to track supplier activity, incomplete and inaccurate information, and inadequate cooperation from suppliers are some of the challenges corporations must tackle as they reexamine the impact of their core business.

How then can a company ensure its triple bottom line when its processes have so many gaps?

Blockchain technology might be the solution as it can help document and verify information and transactions for both internal and external purposes, forcing corporates to face their challenges, and becoming transparent and accountable for the commitments they make.

Blockchain allows users to record every transaction on a decentralized and encrypted ledger that is verified by the consensus of multiple people in the “chain,” making it immutable. Spend on blockchain for business is expected to hit $12 billion by 2022 as companies recognize the efficiencies it offers. According to World Economic Forum, 10 percent of global GDP will be stored on blockchain by 2027.

Large conglomerates are already piloting projects using blockchain to address their core business challenges and enhance their value creation model.

Supply Chain Transparency

Unilever and Sainsbury’s are working with banks to make their tea production supply chain more efficient and traceable. The system will track and verify contracts for up to 10,000 farmers in Malawi that supply tea. They are working with Provenance, a company that has traceability tools on the blockchain allowing users to verify the origin of materials in their supply chain. The companies are also partnering with Halotrade to cross check a supplier’s compliance against ethical audit databases to confirm origin. Ultimately this will expose issues in their supply chain and provide the transparency banks need to provide farmers loans.

In the pharmaceutical industry, GlaxoSmithKline is working with blockchain startup Viant to ensure their products are produced, transported and stored in proper conditions. The tracking of products using blockchain technology offers a level of transparency that can prevent mislabeling of medications, the appearance of counterfeit drugs, and document regulatory compliance.

Other such examples include Nestle tracking Gerber baby food products on the blockchain, and Walmart’s Food Trust project, which the retailer says is the first attempt to build a global food supply chain on the blockchain.

Reducing Carbon Emissions

Another example is Ben & Jerry’s, which is on a mission to support a transition to a low carbon economy by putting an internal price on carbon to reduce their emissions by 80 percent by 2020. To help achieve this objective, the company is piloting a project with Poseidon Foundation that has developed a retail platform using blockchain to integrate carbon markets into transactions. This gives customers the opportunity to support international forestry conservation projects for every scoop of ice cream purchased. In the three weeks since its launch, they have protected over 1,000 trees via their London store, demonstrating the potential of the platform to drive behavior change with a sustainable business model at its core.

Data Protection

Recent large-scale data breaches have highlighted the need for robust data protection. Blockchain can be used to authenticate personal data while protecting users from fraudulent activities and identity theft. It can replace the need for multiple usernames and passwords across online platforms like Paypal and Amazon. Although there is a debate about whether blockchain complies with EU’s GDPR regulations, the current consensus is that blockchain architecture can be modified to comply.

Transparent and verified sustainability reporting

Most corporations use the GRI Framework  for sustainability reporting which, although all-encompassing, does not require third-party assurance. Without verifying reports, consumers applaud initiatives that in reality might have failed. Blockchain can assist corporations to be more transparent and provide real-time verified reports on their business operations.

Blockchain technology has the potential to radically transform the way we do business. It could help corporations enhance their value creation by being more in control of their business impact and facilitating genuine sustainability reporting. Large-scale adoption of this technology is imminent and will mandate companies to make the triple bottom line central to their business.

Image credit: Pixabay