As the effects of global warming become more prevalent year after year it will become increasingly difficult for politicians to water down and undermine the effects much longer.
Whilst some politicians around the world still choose to continue their rhetoric of denial and other political parties drag their heels when it comes to implementing meaningful environmental policies, it is clear that whilst they lag, society is becoming increasingly in tune with the alarming effects that their lifestyle choices have had on the planet’s well-being.
As a consequence we are demanding that businesses and institutions do the same, pushing towards creating a more environmentally friendly and sustainable world in which to live. This article will provide a high-level overview of society’s shifting attitude towards the environment, why businesses cannot wait for the government to take the lead and examples of the important role blockchain technology can play. In 2019, a YouGov poll found that a quarter of Britons (27 percent) placed the environment as one of the top three issues facing the country, whilst amongst young people (18-24 years old), 45 percent believed it to be the most pressing issue behind only Brexit. For brands and business leaders alike, operating across every industry and all sectors, it means that for them to retain relevance and competitiveness in this fast changing world, they will have to place being sustainable as a key metric of measurable success. This means making sustainability front and centre to their short, medium and long term strategy in addition to making it a key component of their culture and values.
This is a view supported when we consider the results of the recent Edelman Trust Barometer (2020), which found that 64 percent of consumers expect brands to act in their best interests, stating their belief that because brands can be a powerful force for change they should exert their influence to solve societal problems. Indeed, as society’s concern for the effects of global warming and sustainable business practice intensifies; brands will be duty bound and consistently scrutinised in their approach towards solving it.
The study also left a stark warning to CEOs and business leaders given that 74 percent of those interviewed had also stated their belief that CEO’s should take the lead rather than wait for government to impose change on issues such as climate change and income inequality. So whilst some global government policies might be in favour of big business today, consumers will not support big businesses that hide behind this, making it clear that ‘my wallet is my vote’. Such changing dynamics mean businesses can no longer focus on just achieving profits for its shareholders. Ultimately they are unsustainable targets to focus on when stakeholder concerns are focussed on sustainable objectives.
At Smarter Contracts we believe in the values of the ‘embedded economy’ (Raworth, 2017) as it aligns with our views on the fundamental principles of blockchain, a technology we believe can be used to create a fairer, more inclusive, efficient and trustworthy world for all. An embedded economy places the natural world as a core component of economic modelling, for there can be no economy of any kind if there is no living world available for it to function in. Brands, business leaders and economies that subscribe to traditional economic models such as the Circular Flow diagram have to consider their claims of being sustainable when such a model has no intrinsic link to the environment that makes it possible.
To be seen as a sustainable organisation brands and businesses will be required to capture, measure and report the success of its efforts in real-time. We believe that in the future it will be information requested from regulators, carbon tax specialists, consumers, investors and business partners alike. It is for this reason why blockchain and its convergence with other emerging technologies, such as the Internet of Things (IoT) has such an important role to play.
In a world without blockchain, the evidence suggests that efforts made towards being seen as a sustainable business have largely been unsuccessful, especially when we consider statistics from the European Commission which state that only six percent of EU citizens trust producers’ claims about
Whilst we have provided reasons why companies will have to change their approach to doing business, leaders should look to embrace this opportunity mindful that there is evidence to suggest such an approach can have a positive impact on numbers. French retailer, Carrefour SA, cited a boost in sales when blockchain was used to provide information on food products at the point of sale. The information captured related to the quality of the items consumers were buying, helping them to avoid genetically modified products. When we consider large organisations such as PUMA have stated that 94 percent of the environmental impacts of its products occur along their supply chain it is perhaps easy to understand just how impactful blockchain can be. Indeed, companies such as DNV-GL are turning to blockchain, using VeChain to capture carbon emissions data for the carbon trading market we should all envisage in the future as governments and companies pledge to become carbon neutral.
The financial services industry can also be offered immense energy savings when we consider its current inefficiencies across trade finance, foreign exchange, payments, trade and transaction reporting, and settlement accounting not to mention the huge cost inefficiencies that can come from running outdated trade processing platforms. According to Coco et al (2017) blockchain could bring a potential cost saving of 70 percent on central finance reporting due to more streamlined and optimised data quality, transparency and internal controls.
There is already so much opportunity for blockchain technology when it comes to improving global sustainability standards and we have only really just begun.