Green consumers want supply chain transparency via blockchain – Cointelegraph Magazine

Chris Georgen, founder of the social impact-focused blockchain company Topl, believes that many consumers are unaware of the consequences of their buying habits.

“Forced labour, deforestation, destruction of threatened habitats… As responsible citizens of the world, we would not knowingly support, tolerate or participate in anything like this,” he tells Magazine.

“Unfortunately, too often, what we buy can lead to this (and sometimes worse). Whether we know it or not, the things we buy have a big impact on the lives of others and the health of our planet.”

Blockchain may not be able to solve these problems directly, but it can play a significant role in supply chain transparency and rewarding ethical behavior.

Mesbah Sabur, founder of Circularise – a blockchain company tackling traceability solutions for a more circular economy – emphasizes the importance of consumers making greener choices:

“As consumers, we should be more informed about where the products we buy come from, what they are made of and how they affect people and the planet. Consequently, choices are made towards more ethical alternatives and the market signals a need for change.”

“The increase in global challenges means our collective responsibility to reverse the rate of environmental degradation,” says Sabur.

Many believe that tracing the origin of products allows people to better understand the effects of their products and make more informed choices.

“We can trace the coffee beans in our morning latte across continents to see exactly what a local farmer was paid. We can even use blockchain technology to start unpacking what are known as Scope 3 carbon emissions and better understand the climate impact of the goods we buy, says Georgen.

The public is increasingly concerned with the values ​​of businesses. How the company treats its customers, employees and raw materials makes blockchain-based systems a natural fit for ethical consumerism.

There are two ways in which consumers can adopt – or, more controversially, be forced to follow – standards of ethical consumption. The first is through regulation and enforced rules around production, which Energy Web – a blockchain-based non-profit organization accelerating the transition to clean energy – believes is coming in the near future. The second is by building technology into products that give consumers more choices when it comes to their purchasing behavior.

More robust tracking of product supply chains and expanded access to carbon markets are ways blockchain technology could encourage future ethical consumption.

Infrastructure for ethical product standards

To better understand the enforcement of production standards, Magazine sat down with Ioannis Vlachos, Commercial Director of Energy Web – one of the key stakeholders working on the EU’s CIRPASS passport, which will see end-to-end traceability of products.

EnergyWeb aims to promote and advance the transition to interoperable public infrastructure. Regulation appears to play a key role in facilitating this transition.

New commercial infrastructure in the EU will include the CIRPASS Digital Product Passport, bringing together 30 stakeholders, including blockchain technologists. Vlachos explains that Energy Web acts as an open source middleware layer in the CIRPASS project.

“As an organisation, we believe that if you want to make an impact, you should be open, you should be public. There is no room for monetization strategies based on private blockchains. Or create supplier locks. We believe that impact comes from open source and public stuff.”

The purpose, according to Vlachos, “is to lay the foundations for cross-sectoral product passports based on common rules, principles, taxonomies and standards.”

It is currently voluntary to provide information on the sustainability of various products, but it will soon be regulated by the European Commission. It will be required that each and every battery imported into the EU Commission’s member states must be traced from cradle to grave.

“Regulation creates public awareness. If everyone is talking about this new digital passport to the European Commission, consumers are starting to become more aware of why they should care, Vlachos continues.

Morpheus.Network has also used blockchain technology for supply chain transparency. Dan Weinberger, founder of Morpheus.Network, believes that companies will find it easier to demonstrate ethical standards if a blockchain records a product’s journey.

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“By leveraging the decentralized nature of blockchain technology, companies can provide consumers with a clear view of a product’s journey from production to purchase,” he says. “Additionally, the use of smart contracts can automate compliance and certifications, making it easier for companies to demonstrate that their products meet certain ethical or sustainable standards.”

Publicly banned from the carbon market

In a 2020 report, the UK’s Food Standards Agency found that Gen Z cares most about the environmental impact of food and believes technology will play a key role in delivering food with a low environmental impact.

Empowering consumers to take part in these trends is an issue that requires further research and practical approaches. For example, many of these solutions are led by international bodies and are often “highly fragmented and centralized,” says Alexander Mitrovich, CEO of Unique Network – a blockchain-based project building NFT infrastructure within the Polkadot ecosystem.

The current methods of recording carbon emissions and credits are coming under increased scrutiny, as credits are often bought in bulk by government agencies or large corporations. The World Economic Forum reported on the matter last year, stating that the overwhelming majority of the $851 billion carbon market is closed to the public.

“They have high financial barriers. The regulations surrounding carbon markets are issued by various central bodies which often do not agree. Tokenization of carbon credits on a blockchain provides an opportunity to design an emission reduction consensus in line with international treaties such as the Paris Agreement, says Mitrovich.

A potential path towards increased consumer participation is the use of non-fungible tokens that can act as receipts and share credits so they become available to everyday consumers.

Mitrovich believes that carbon credit NFTs allow individuals to see the positive impact they are having on societal issues.

“Tokenised carbon credits are also transparent, immutable and avoid double counting. Using advanced NFT features, different properties can be inserted into tokenized carbon credits to allow different benefits and voting rights to contributors.”

However, the public also needs to be aware of how to access these climate-positive activities, and to date blockchain companies do not provide easy entry points for the average consumer.

Gives easy entrance point

Unlocking the value of deals for carbon projects and those who buy into them is a way for the public to participate in what otherwise looks like a difficult market to access. Solid World DAO wants to make carbon markets as liquid as possible by developing diversified funding pools, and increasing informed consumers’ access to the markets.

“This kind of brand awareness is especially important among younger people, but there are also selfish reasons to know exactly where your products come from because it helps ensure you’re getting something safe and reliable,” says John Vibes, community manager at Solid World DAO .

For Energy Web, it is important that the consumer can easily verify product claims.

“I would be able to verify by simply pulling my mobile phone out of my pocket, scanning the QR code on certain products and logging how the material was obtained – without revealing any sensitive information, but with the ability to validate myself,” explains Vlachos.

Georgen says Topl is already helping consumers make choices that better align with their values. “Consumers can scan QR codes on everything from tea and chocolate to their clothes to see where these products come from and what kind of labor practices were used. In the future, we can not only imagine the availability of this data extending to more products, but we can even envision a world where consumers can be rewarded for acting more ethically, says Georgen.

With the development of simple entry points, consumers can make better choices automatically.

Lisa Gibbons

A self-starter, blockchain attorney with a penchant for creative writing. Lisa began writing about postcolonial identities in 2012 and has maintained her love for the written word. She loves helping drive innovation in green blockchain projects, enjoys writing poetry, foraging for wild food, and browsing NFTs in her spare time.