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Blockchain tech helps businesses align with environmental goals

Sustainable businesses are evolving a new type of capitalism – one that replenishes what it takes out

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Environmental, social and governance (ESG) rules are followed via digital solutions using minimum resources

James Locklock, the inventor of the Gaia hypothesis passed away on his 103rd birthday on Wednesday.

Gaia was not just the name of my former Indian startup (which I changed to Geosansar as the original sounded too much like “gaay”, hindi for “cow” and sacred in India) but represents a pertinent framework for the world today. 

The Oxford English Dictionary defines Gaia (ancient Greek for “Earth”) as “the global ecosystem, understood to function in the manner of a vast self-regulating organism, in the context of which all living things collectively define and maintain the conditions conducive for life on earth”. 

Professor Lovelock published his hypothesis in 1972 – and 50 years on, we are testing the limits of Gaia.

The recent extreme weather across the world leads many to conclude climate change is upon us and such conditions are the new normal. What happens if we continue testing Gaia? Is it ever too late to change?

When this question was posed to the eminent professor by the Guardian, his response was emphatic. Well, we better had, or we are doomed. But we are doing the opposite by burning fossil fuels.”

This change needs to be driven by governments and businesses in partnership. 

Adopting the principles of circularity, sustainability and ESG  (environmental, social and governance) within the corporate doctrine must evolve a new type of capitalism – one that replenishes what it takes out and therefore complements its external environment.

Updating the enterprise to achieve such aims requires a redesign of operational processes to place data at the centre. In the words of management thinker Peter Drucker, “you can’t manage what you can’t measure.”

Saudi Arabia’s Sabic, a global leader in the chemicals industry, has launched a project with Finboot, recycling pioneer Plastic Energy, and packaging specialist Intraplás, to adopt blockchain technology as the database of record for end-to-end digital traceability of circular feedstock in customer products. 

Finboot (I am its chairman and co-founder) has developed Marco, a low-code platform that simplifies digital transformation, by enabling companies to develop and deploy digital solutions with minimum efforts and resources. 

It enables companies to incorporate blockchain within their value and supply chains, which increases traceability, transparency and compliance.

This, in turn, helps them meet sustainability and ESG requirements while also increasing operational efficiency.  

Tracing raw materials to finished products through any manufacturing process is fraught with challenges. None more so than the journey of feedstock through the complex petrochemical value chain. 

The project, which traces Sabic’s Trucircle certified circular polymers, is the first of its kind in the complex chemical industry to trace the product from feedstock production to converter, going further than previous industry applications of blockchain in end-to-end tracing. 

The platform offers reduced costs, time and improved data integration for all value chain stakeholders. This is a critical success factor. Data sharing must drive mutual benefit. 

Marco ensures that all gathered data remains immutable while shared across suppliers, customers and regulators – providing transparency, auditability and accountability in a complex industrial ecosystem.

Furthermore, blockchain enables the validation of sustainability proof points through the cycle and confirms circularity claims with evidence that can be traced back to the raw input. 

Apart from the automation efficiency this creates, the resulting process is faster, cheaper and more reliable than the analogue approach that is common across many complex operations today.

Enterprises need to rethink their supply chain design to both respond to the environmental crisis and the changes after the pandemic. This is a digital first approach, which will in turn bring to the fore exciting new technologies.

Blockchain offers transparency and creates supply chain agility. Investment in the necessary technology can help enterprises work more in harmony with the environment.

This will help them better align with ESG principles, and might be just one of very many steps required if businesses are to stop testing Gaia’s limits.

Nish Kotecha is a serial tech entrepreneur and board professional. He is the chair and co-founder of Finboot