How Can Blockchain be Used to Support Sustainable Business Practices?

This article is a continuation of our blockchain technology series, discussing how this technology can help in making the world a better place to live. Those currently unaware of the basics of blockchain technology can understand better by absorbing these fundamental concepts.

The rapid advancement of blockchain technology has urged people to ask how blockchain can be used to support sustainable business practices.

Blockchain can support sustainable business practices by promoting transparent transactions for different social initiatives, reducing environmental waste, promoting renewable energy, and creating an equitable supply chain that can equally serve the purposes of all human beings without letting corrupt elements hack the system.

Blockchain technology has the potential to revolutionize sustainable practices in business. By utilizing a distributed and immutable ledger, companies can achieve greater efficiency, transparency, and accountability in their operations.

In the traditional centralized databases, influential shareholders of the business can manipulate data and financial records. Any company’s small shareholders are vulnerable to losing their shares. To tackle this financial corruption and to make the business fair for everyone, a distributed ledger plays a critical part.

The distributed ledger is the backbone of the blockchain industry. This technology disallows the centralization of data, which means that all the shareholders of any business have a real-time record of what is happening. And as the blockchain works on the immutability of notes, no one can manipulate the data, eventually eliminating corruption in the business. These practices ultimately result in business equity, which means that the wealth is not concentrated in only a few hands.

Blockchain makes it easier for businesses to identify and track sources of materials and energy used, trace waste or emissions generated from production processes, manage carbon credits, measure impact on biodiversity, and verify certifications for sustainability standards compliance, among other features.

The use of smart contracts built on blockchain also allows businesses to automate specific decision-making processes that involve environmental conditions. Smart contracts are the type of contracts that are initiated automatically once the predetermined conditions are satisfied. This means that no intermediary has to manually initiate the contract.

Now, these smart contracts can have predetermined conditions for different environmental initiatives. What is the carbon output of the project? How much does the project contribute to global warming? And so on. When all the parties reach a consensus about these questions, smart contracts will start automatically, thus contributing to the betterment of the environment.

This efficiency ensures greater accuracy in decisions and improved trust between all stakeholders involved, thus reducing business costs. Additionally, decentralized applications (dapps) can be built on the blockchain, enabling users’ collective participation toward achieving a common environmental goal.

Role of Blockchain in Equitable Supply Chain Management

Blockchain technology has the potential to revolutionize the way we measure and track resources within supply chains. By using distributed ledgers, transactions can be securely tracked, traceable, and immutable, thereby providing transparency and trust in supply chain management, which is one of the ways to achieve sustainable business.

Blockchain in Action: Helping Businesses in Equitable Supply Chain

Now take this case study, for instance:

The raw material of one business is highly dependent on the products of the other companies above the line.

In the case of distributed ledger technology, everyone in the supply chain will be aware of the remaining resources available to different businesses, which will help the other company make any necessary alternative supply arrangements. This revolution in the working of the business sector will bolster the two crucial sustainable development goals of the United Nations:

  • Industry, Innovation, and Infrastructure (No. 9 Goal)
  • Decent Work and Economic Growth (No. 8 goal)

A well-informed workforce in the whole supply chain will eventually be able to make efficient and knowledgeable decisions.

  • Distributed ledger technology means that all the investors of a business are tracking real-time data, and no data can be manipulated.
  • The immutability of nodes will disallow corrupt business regimes to change the data without letting other stakeholders know.
  • Smart contracts in blockchain technology will enforce contracts in the supply chain without delay.

These transparencies will lead to more equitable business practices where the investment of everyone is safe and secure.

This could ensure equitable resource allocation between parties within the chain, enabling products to be efficiently tracked from source to consumer. It could also provide individuals with direct access to their product’s information, helping identify any discrepancies or unfair practices used in its production process.

By leveraging blockchain technology’s decentralized setup and secure nature, a higher level of trust would be placed on those responsible for using natural resources equitably throughout a product’s lifecycle, consequently creating equitable global supply chain management systems.

Blockchain’s distributed, immutable nature creates a transparent digital ledger system that can track shipments from origin through every stop until they reach their final destination. All the information stored via blockchain technology can be counter-checked and verified. This could be augmented with advanced tracking technologies, such as IoT-powered RFID tags or GPS-equipped tracking devices, to ensure that goods follow the appropriate route and are not misrouted or tampered with at any point during transit.

With this technology in place, organizations of any size can access reliable real-time information on their supply chains, helping to identify any issues quickly and efficiently while enabling more efficient collaboration between various suppliers, customers, and other stakeholders.

This means faster response times when it comes to making purchasing decisions, scheduling operations, monitoring inventory levels, and more, thus allowing companies to be operationally competent with maximum efficiency.

Role of Smart Contracts in Ensuring Sustainable Business Practices

Smart contracts, or automated digital contracts, present significant possibilities for enforcing sustainable business practices.

Through smart contracts, businesses can employ various methods to ensure the efficient use of resources by all parties involved. Smart contracts provide access to cost-efficient and up-to-date data that can facilitate reporting on sustainability performance metrics such as energy consumption, emissions levels, and purchase frequency.

Furthermore, smart contracts can track the consumption and production of goods, giving management insight into the efficiency of their operations and significantly reducing waste levels. In essence, smart contracts open new channels for businesses to stay abreast of changes in sustainability regulations, ensuring that sustainable practices are actually enforced throughout the organization’s operations.

How Can Blockchain be Used to Make the Environment Better?

Blockchain-based solutions offer businesses a way to manage and monitor their environmental impact more effectively. Using blockchain, companies can gain greater visibility into activities impacting the planet, such as emissions, waste disposal, and other processes. Through these technologies, companies can develop more efficient strategies to reduce emissions while still being cost-effective.

Blockchain in Action: Saving the Planet from Disaster

See this case study:

The government is tracking all industries’ emissions data using distributed ledger technology.

As data is scattered on various nodes and all the nodes are immutable, no industrial heavyweight can change their emission data. Governments can have their sensors installed on the facilities most likely to emit dangerous gasses.

These sensors will automatically start recording data whenever the industrial equipment exceeds the emission limit. This enforcement will be made possible using smart contracts, as these contracts start automatically based on the programmed conditions. Once these contracts have been started, no industrial giant can manipulate emission data, as all the information is being recorded on blockchain technology which works on the immutability of nodes.

This increased oversight can result in better accuracy when reporting on critical metrics like emissions levels, allowing businesses to make smarter decisions around sustainability initiatives.

Equally important, by bringing greater trust and transparency to environmental data, blockchain-based solutions empower enterprises to target and prioritize areas where improvements are required. This will force private entities to bring innovative changes in their design, which will better protect the environment. In doing so, businesses can limit their carbon footprint while positively affecting the environment.

Can Blockchain-Enabled Digital Payments Help Reduce Waste Associated with Traditional Payment Methods?

The concept of blockchain-enabled digital payments is rapidly gaining acceptance, especially among the younger generations. Adopting this method could reduce the waste associated with traditional payment methods like paper checks, debit, and credit cards.

There is massive waste associated with paper currency. But the use of blockchain can exponentially reduce the need for paper currency. And the cherry on t top is that blockchain payments are more secure than traditional paper money.

With digital payments using blockchains, no physical material needs to be handled, and transactions can occur in seconds. Additionally, virtual currency transactions are recorded permanently and transparently on the blockchain, which helps reduce potential fraud and mismanagement. Overall, blockchain-enabled digital payments offer a much more convenient, cost-effective, and secure payment solution than legacy systems while reducing paper waste.

Eliminating paper receipts also allows organizations to save on operational costs while eliminating the environmental impact associated with paper production.

Could Distributed Ledger Technology Provide Companies with Real-time Insights into Energy Consumption and Other Production Activities?

Distributed ledger technology (DLT) presents remarkable possibilities for companies seeking real-time insights into their energy consumption and other production activities. By securely storing and sharing both internally-generated data and third-party data from multiple sources, DLT enables businesses to track and analyze precision metrics far more quickly than they could before.

Blockchain-enabled smart contracts allow businesses to control their energy consumption and power off unnecessary machinery and tools whenever the conditions of smart contracts are satisfied.

Governments willing to track the energy consumption of businesses can also police the organizations using blockchain technology. This can be done using an immutable nodes mechanism where companies will not be able to conceal any energy consumption data from the government.

As a result, energy conservation efforts could be better optimized with longer-term impacts on both environmental sustainability and bottom-line gains. Companies must recognize the potential of DLT in today’s rapidly evolving business world.

Blockchain and Reducing Food Waste

Blockchain technology can revolutionize how food is tracked, stored, and distributed worldwide.

It can act as a decentralized ledger that tracks where food is produced and helps keep it safe and secure during the entire supply chain process. This would reduce food waste due to spoilage or other reasons and provide unprecedented transparency into how food has been stored and distributed.

This visibility could drastically reduce global hunger and food waste by ensuring people have access to safe, reliable food sources while reducing overall distribution costs by smoothing out shipment times. With blockchain technology as a tool for tracking our global food system, we could end hunger once and for all.

Blockchain technology has the potential to revolutionize the global approach to ending world hunger and reducing food waste.

By using distributed ledger technology, it is possible to create an efficient and transparent system for international food aid. By tracking aid distribution on an immutable public ledger, corruption can be reduced, and more resources can be delivered directly to those in need. Additionally, blockchain could help reduce food wastage through automated processes such as supply chain tracking, batch recall alerts, and expiration notifications.

With these protocols in place, everyone from farmers to distributors could help ensure that food makes its way from the farm to the table faster, fresher, and more efficiently, with less being wasted due to spoilage and improper storage practices. In short, blockchain has the potential to revolutionize not only financial transactions but also the fight against global hunger.

Blockchain also removes tampering with records in business and eliminates the chances of cyberattacks and vandals who tamper with records for criminal corruption. There have been instances reported worldwide where NGOs have taken the donation amount and used it for their own personal gains. But with blockchain in action, fraud will be seen since blockchain data is transparent. It is impossible to hide.

Businesses Eliminating Poverty Using Blockchain

Reducing poverty and hunger is also a sustainable business practice. Businesses that realize their social responsibilities are aware that their workforce should be able to cope with the economic challenges wherever they are present.

And when businesses use blockchain technology, they are ultimately improving their performance. The improved performance of business should mean that employees are getting higher rewards for their work, which increases their economic conditions at the end of the day. 

This is possible if blockchain-based solutions are introduced in governance, which is one of the reasons for the rising poverty and hunger in the world.

Since no hunger and no poverty are the first and second sustainable development goals of the United Nations, blockchains need to be introduced to tackle the crisis in this domain.

Consider the governance crisis of different third-world countries where free and fair elections are still a pipe dream. And when election fraud happens in these countries, the true representatives of the people do not win the elections, which leads to the emergence of incompetent and criminal leadership. 

This is one of the most significant governance failures, which can only be tackled by introducing blockchain-based voting solutions that provide free and fair election opportunities to the world. 

Bad governance and poverty are highly interrelated. For example, corruption prevails in poor governance, which results in weak governmental institutions. Take the case of poor accountability watchdogs in corrupt countries. There is no mechanism of checks and balances in developing countries, which means that the powerful people cannot be controlled in any sense. They tend to accumulate riches by finding loopholes in their system and exporting money via money laundering.

But private businesses can rely on blockchain technology to introduce accountability systems that the government can use.

For example, the live data of the money accumulated by the riches can be stored via a distributed ledger system, and that data should be accessible to the general public. This way, the masses can track the assets of the powerful elite and recognize possible instances of corruption. When corruption reduces, poverty will eventually decrease, leading to less hunger.

Similarly, a rigorous check and balance system should also be introduced to see whether other government institutes are correctly working per their institutional role. For this purpose, businesses can use smart contracts, which will force government organizations to start contracts whenever pre-decided terms are met. This way, manipulative government entities will not be able to delay projects using red tape schemes.

Using Blockchain to Reduce Inequality Through Businesses

Reducing inequality should also be a primary focus of businesses nowadays. Since less inequality is the number ten sustainable development goal of the United Nations, companies have a greater responsibility to reduce the differences around them. This is possible if these businesses use blockchain solutions to bridge the economic gap between the poor and the riches.

Blockchain allows even poor people to invest their money in a business that cannot be tampered with. If poor people see the use cases of distributed ledger technology, they can easily invest in businesses that employ blockchain technology. No one would be able to trick them within the business, and they will be able to get their fair share of profit, helping them elevate their standard.

Consider the case of money transfers from rich countries like the US to third-world countries. Banks deduct significant fees while transferring money, and even credit card companies charge significantly for money transfers. But when the money is transferred using blockchain technology, for example, bitcoin or Ethereum, the transfer fee is next to nothing, which is helpful in reducing inequality in developing nations. While a fee of $20 may seem less in countries like the US, it is significantly higher for countries like Venezuela, where the average salary is only $25 per month.

Using Blockchain to Promote Donations for Sustainable Businesses

Blockchain technology can be used for crowdfunding for different social initiatives and let the funders track their money. This way, people will increasingly donate to various activities while seeing that their money is making a difference.

Blockchain and Water Consumption and Conservation

Blockchain technology provides an opportunity for people to save and allocate water efficiently. It can be used to track all the data associated with water consumption, including who is using it, when they are using it, and how much they are using it.

By digitizing this information, governments and authorities can ensure that water resources are being managed correctly and that wasteful practices are avoided. Furthermore, technology can be employed in smart meters to monitor levels of water consumption and flag those going beyond their allotted usage level.

This information can allow users to know precisely what their consumption is like to make conscious decisions to conserve water accordingly. With blockchain technology, there could also be incentives such as reward programs put into place, encouraging the more sustainable use of water resources across the board.

Soleqs is dedicated to support United Nations sustainable development goals. That is why we are offering blockchain solutions that can promote sustainable business practices so that the both businesses and consumers are getting advantage at the same time. It’s time to make your business sustainable using blockchain solution

Make your business sustainable using blockchain.

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Bariki Mshomi

Bariki Mshomi

20+ years of IT experience, during which he have achieved expertise as a Data Integration Architect, Solutions Architecture, Data Architecture, ETL Architecture, and Developer, Data warehousing Modeler Database Technologies, including Oracle, SQL Server, DB2, IMS, VSAM, Teradata, Hive Data Movement using Informatica, SSIS, PDI Pentaho, PL/SQL, and SQL/PL Business Intelligence Reporting using Business Objects and Microstrategy Clients Including Highmark Health, Ramsey County MN, Century Link, Country Financial, Digi-Key, Toro, Medica, Blue Cross Blue Shield of MN, Ingenix, Cardinal Health, Data Recognition, Target, Allianz, eFunds, Fair Isaac, GE Capital Fleet, and Carlson Marketing Group

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