With growing concerns about climate change and environmental sustainability, many companies are turning to innovative solutions to address these issues. One of them is blockchain technology, which has the potential to revolutionize sustainability efforts in various sectors.
On April 25, a White Paper by the World Economic Forum (WEF) introduced Blockchain technology as a tool to combat climate change. The document highlights the benefits of using blockchain technology in the climate action community. From improving market transparency to democratizing access to climate action, the WEF wrote about the various benefits of using blockchain technology in sustainability efforts.
To further explore the potential of blockchain technology in sustainability, Cointelegraph reached out to industry executives to gain insights into how blockchain can combat eco-laundering, how it is currently being used in environmental initiatives, and the long-term benefits it offers to the world. From climate action.
Solve the „context-washing” problem
Eco-laundering (false advertising that makes products appear more sustainable than products) has gained popularity in recent years. In one survey, 68% of executives in the United States agreed Their companies resorted to eco-laundering.
According to Daniela Barbosa, executive director of the Hyperledger Foundation, there is a problem with verifying that a company that claims to be „green” actually adheres to the sustainability programs and goals it claims.
Barbosa believes that establishing a system to monitor and record these matters is essential. He emphasized that digital ledger technology (DLT) is the right tool for the job. He explained:
„With DLT’s inherent transparency and immutability, companies and entire industries can capture and document transactions such as carbon offsets or sustainable sourcing across their operations, adding new credibility to sustainability claims.”
Barbosa believes that reliable record systems will encourage companies to adopt sustainable practices, which will help them achieve their climate goals and build consumer confidence.
For his part, Gene Hoffman, CEO and Chairman of Sia Networks, echoed Barbosa’s sentiment. According to Hoffman, the current infrastructure of carbon markets is restrictive and does not support innovation throughout the value chain. As a result, organizations are limited in their ability to be transparent about sustainability efforts across the board.
Current use of blockchain technology in sustainable initiatives
Thanks to blockchain technology and DLT, companies will be sustainable and eco-friendly. Blockchain technology has already been adopted by major companies around the world in various initiatives.
“The applications that leverage DLT and related technologies are growing, including green finance, sustainability reporting, climate accounting and supply chain traceability,” Barbosa told Cointelegraph.
The executive highlighted initiatives such as Genesis 2.0, a collaboration between the Bank’s Innovation Center for International Solutions, the Hong Kong Monetary Authority and the United Nations Global Innovation Center on Climate Change. The project includes two prototypes to digitize bonds with future carbon benefits. These vouchers are tracked, delivered and exchanged using blockchain, smart contracts and other related technologies.
Apart from this, Barbosa also highlighted how the government of the Canadian province of British Columbia has launched the Energy and Mining Digital Foundation pilot project, which creates verifiable sustainability reports. project uses Blockchain technology to protect your data and information.
Also, Hoffman envisions the Climate Action Data Trust (CADT) as a high-impact climate initiative using blockchain technology. CADT’s mission is to establish trust in data related to carbon credits between multilateral and governmental agencies.
Although not led by Web3 natives, the initiative uses public distributed ledger technology to solve the problem of fostering internal collaboration among peers.
Additionally, Hoffman highlighted the importance of the Carbon Opportunity Fund, which forms the foundation of CADT. The scheme provides a reliable means of obtaining carbon credits directly from project developers. According to Hoffman, this approach improves the efficiency and transparency of previously opaque weather markets.
Long-term benefits of using blockchain in sustainable initiatives
According to executives, as blockchain technology becomes more widely adopted in the climate action arena, the sector could reap more benefits in the long run. Victor Genin, Senior Solution Architect at BNB Chain, believes that ensuring regulatory compliance is one of the best benefits of using Blockchain technology in the sustainability industry.
Jenin explained that blockchains could provide a way to track goods, services and resources throughout the supply chain. „This creates an opportunity to monitor compliance with environmental regulations and ensure that sustainable practices are followed throughout the entire life cycle of a product or service,” he added.
Jenin highlighted that there are other benefits such as „greater transparency and accountability, traceability, energy efficiency, waste reduction and collaborative approaches”.
Despite all the benefits blockchain can bring, Hoffman believes it’s still not a „magic bullet.” However, the executive believes that when designed and used responsibly, blockchain technology can serve as a foundation or framework for greater transparency, accountability and security in climate action efforts.
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