To understand, and report on, an organization’s carbon footprint is a complex undertaking — to say the least.
First, you must determine what drives your carbon footprint. For most multi-site organizations, these influences are vast, including both direct impacts from company-owned facilities and indirect impacts from suppliers and distributors. Then you must run a scenario analysis to model and account for potential environmental changes, such as increasing water scarcity, and identify opportunities for resource reductions. If these tasks weren’t difficult enough, every business should also prepare for the costs of carbon, including how carbon taxes could disrupt existing business strategies.
According to the World Bank, there are 40 countries and more than 20 cities, states and provinces that have either established or will soon implement a carbon pricing system, which includes cap-and-trade or a carbon tax. Further, nearly 13 percent of annual global greenhouse gas (GHG) emissions are now covered by carbon-pricing initiatives.
While carbon reporting remains a significant hurdle for organizations on the path to achieving the Sustainable Development Goals, one nascent technology offers a solution to this challenge. Blockchain — a communal record of information maintained by a computer network — cuts out the middleman, such as a company monitoring all transactions, to ultimately provide more efficiency, transparency and control.
As an opportunity to amplify transparency and dramatically change the way we view and install trust in companies, blockchain is rooted in validation, not just claims. The technology presents a significant shift in accountability for businesses, particularly for carbon reporting across the value chain from suppliers to consumers. Many companies traditionally self-report on sustainability claims, but blockchain reverses this process by enabling the participation of all stakeholders in a more sustainable economy.
Businesses should anticipate blockchain to transform carbon reporting in three important ways…