Consumer trust, greater transparency, and granular traceability—blockchain on Kaleido has the power to eliminate greenwashing from ESG reporting.
“Blockchain will save the planet.” It sounds like a bold statement considering all you’ve read about the energy it takes to mine coins. But the truth is that blockchain goes beyond crypto. It offers a solution for people who want to build, manage, and report on environmental, social, and governance (ESG) initiatives.
Organizations like the Task Force on Climate-related Financial Disclosures (TCFD) are calling for increased reporting of climate-related financial information. Consumers are demanding value-based companies and products. The distributed ledger is a path forward. Let’s talk about how.
ESG is a measure of environmental responsibility—how a company handles waste, water, and impacts the environment; social responsibility—which uses metrics to measure how a company treats its workers and clients; and governance—a measure of how well a company is run. This is a good framework for comparing companies, but it’s always been difficult to track.
Blockchain reports environmental impact in more detail, automates reporting, and preserves records. This gives consumers, managers, and investors more visibility into the practices of a company.
Let’s take a deeper look at specific use cases for blockchain in ESG management.
The World Economic Forum has made strides to unite global companies around standard metrics. But record keeping, sharing of data, and tracking sustainable efforts throughout the supply chain remains a challenge for many companies who want to grow responsibly and attract value-based investments.
In addition to measuring impact, companies need to choose a blockchain platform that is less energy intensive. Where Bitcoin’s Proof of Work requires a lot of energy to operate, enterprise solutions like Fabric, Geth, and Cord do not.
There are a number of challenges facing ESGs, but it’s not holding the industry back. According to the National Law Review, ESG assets will exceed $53 trillion by 2025. This means if companies are going to meet consumer demand for values-based companies and products and investors desire for conscious brands to invest in, they need to act now.