Until recently, brands have had very little visibility into what’s happening at the farthest reaches of their supply chains. Immutable blockchain data has begun to play a central role in helping companies ensure compliance and earn trust on the global market.
The world is moving toward more and more sustainability regulation. Impending
mandates such as the EU Due Diligence
rules
and extended producer responsibility
(EPR)
requirements will require major overhauls in conventional environmental, social
and governance (ESG) models.
“In the past, third-party certifications have been helpful in helping companies
prove sustainability,” Jordan
Wilson, Director of
Digital Marketing at BanQu, told Sustainable
Brands®. “But as [new] regulations come out and the ESG bar is being
raised, I think that [certification alone] will no longer cut it.”
Metrics matter; and how they’re measured matters. That’s where blockchain comes
in.
A blockchain is a distributed digital database housing a list of records called
blocks. Together, these blocks are linked together via cryptography — each block
containing a link to the previous block, a timestamp, and transaction data. This
chain of blocks becomes a shared, immutable ledger that
permanently and transparently records assets.
Blockchain has begun to play a central role in data visibility to ensure
compliance on the global market. It’s audit-proof and tamper-proof; and once
information goes in, it can’t be changed — allowing stakeholders to follow a
product’s global footprint from source to shelf through the blockchain ledger.
“Blockchain is a really great way to make sure that data is immutable,
real-time, and from the source,” Wilson said. “It can be a lot easier to notice
any issues or red flags right away [with blockchain].”
Brands often have very little knowledge about what’s happening at the farthest
reaches of their supply
chains
— the murky place where externalities
live
far from the shiny glow of corporate offices and sustainability reports. The
ability to capture sourcing data up and down a supply chain vertical is
game-changing information; and in the world of consumer demand and compliance
policy, information is power: Knowing how much you’re using, where it’s
happening and why allows you to make more strategic decisions regarding your
suppliers.
Blockchain for sustainability
BanQu is a blockchain-powered traceability platform allowing brands to peek
under the hood of their supply chains and integrate that information into ESG
reporting. BanQu allows brands to track a product’s journey from farm to
consumer — providing a coherent line down the rabbit hole of modern sourcing.
What’s more, blockchain breaks down communication silos in an organization —
creating a universal instrument and enabling alignment of ESG goals throughout
an organization.
BanQu uses blockchain in its purest form: Creating an immutable record. All
entities involved in a transaction get to see the record on the blockchain —
facilitating greater transparency than conventional reporting methods. And this
remains the same wherever it moves throughout a supply chain.
BanQu integrates multi-tiered checks and balances — from NGO audits to SMS
messaging among farmers to the immutable blockchain itself. The blockchain
connects all of these disparate parts of accountability together, forever.
“It’s an easy win if you put in the effort to do it,” says BanQu Chief of Staff
Katelyn Thacker. “And it’s a big
win.”
Decoupling blockchain from crypto
Nowadays, when people think blockchain, they often think cryptocurrency; and
because of this, blockchain has a trust and messaging problem. Recent crashes
in crypto
value,
its novelty and elitism, and the insane energy
requirements
associated with crypto mining haven’t helped the reputation of blockchain an
iota.
BanQu uses the power of blockchain to build immutable
records,
not virtual fortunes. Crypto mining requires obscene amounts of energy — about
0.3
percent
of all global carbon emissions. But blockchain itself, particularly for those
utilizing “proof of
stake”
or block
lattice
technology, doesn’t require energy-intensive
mining.
Paired with renewable energy power, blockchain platforms such as BanQu are at
the forefront of bringing the sector into the net-neutral space.
Cryptocurrency is essentially a first-world problem; but that doesnt mean
blockchain has to be.
Most blockchain platforms, Thacker says, are designed to serve the end user —
not the stakeholders in between. BanQu did the ground game first, then built a
blockchain around it able to capture source-level data in a way that brands and
suppliers can actually use.
“We didn’t start as ‘let’s get on the crypto train and make the most of it,’”
Thacker said. “We started with a platform that works for farmers, that makes it
easy for companies to prove their sustainability goals and get sourcing
insights.”
BanQu was designed to be first and foremost easy to use in the lowest levels of
the supply chain where negative externalities lurk and hide in the shadows. The
platform is device-agnostic to meet the technological needs of any user, even in
remote regions. The raw, unaggregated, real-time data provides immediate
insights in supply chain motion to prove sustainability claims.
Blockchain doesn’t catch all information on its own merits. Some data, such as
carbon emissions, can’t be directly traced from the source; so, hard-to-record
data at the lowest tiers of a supply chain must be extrapolated based on
existing information or models from third parties. Thankfully, there are
accurate groups and standards providing data points; and items such as energy
bills can be plugged into BanQu to allow accurate estimates of emissions and
other missing information.
“In today’s age, sustainability is beginning to equal good business,” Wilson
said. “Using technology for transparency and reporting is a great way to
multi-solve various sustainability pain points and align internal stakeholders,
so you can continue to grow your business and do good without sacrificing your
profit.”
Rome wasn’t built in a day; and complex supply chain webs can’t be mapped in a
single leap. Like most things, starting small with achievable goals is key to
incorporating blockchain in transparency efforts. Start with a single
commodity,
build a collection of small wins, and scale up — an incremental process Wilson
calls “peeling the onion.”
“People think this is insurmountable,” Thacker said. “But again, simplicity.
Just make it simple.”
Published Jan 23, 2023 7am EST / 4am PST / 12pm GMT / 1pm CET
Christian Yonkers
Christian is a writer, photographer, filmmaker, and outdoor junkie obsessed with the intersectionality between people and planet. He partners with brands and organizations with social and environmental impact at their core, assisting them in telling stories that change the world.
