Blockchain has quickly become one of the most high profile topics in corporate sustainability. The term refers to a new process by which transactions are managed and verified without the use of a third party intermediary. Blockchain was originally developed to enable the exchange of the currency Bitcoin. Now, its potential application across many different areas of commerce is resulting in a surge of investment. Blockchain’s ability to deliver increased transparency and ease of transactions gives it many possible uses for sustainability.
Blockchain is essentially an open and decentralized ledger of transactions that enables the recording of chains of transactions without an intermediate party, like a bank. The result is quick, secure, and cheaper transactions. It also permits a high level of transparency and the tracking of the movement of products and finances. This is where the real relevance to sustainability comes about. Blockchain could enable companies to track products across the supply chain to a previously impossible extent. Businesses would be able to see where goods are coming from and gain more assurance that their procurement standards are being followed throughout. This can even extend past a company’s distribution of the product, enabling monitoring throughout a product’s life cycle. Much of supply chain sustainability depends on the ability to monitor goods from their origin and throughout the value chain; blockchain could make this possible to an unprecedented degree.
Blockchain also has significance for renewable energy. Several companies are already working on ways to harness its unique set up to make the selling of clean power more streamlined. For instance, producers of clean energy could use it to automatically sell renewable energy certificates by setting up predetermined contracts that are triggered once certain production thresholds are met.
Blockchain has a way to go before its full applications for sustainability can be understood. What is clear is that it has the potential to transform the private sector’s ability to manage the procurement of goods and services. Much of this will become clearer in 2017 as blockchain is further developed for these purposes.