Blockchain technology is being acknowledged for its potential to transform supply-chain emissions tracking, particularly regarding Scope 3 emissions. These emissions, attributed to indirect activities across the supply chain, are crucial yet notoriously difficult to monitor. Many businesses have historically grappled with inconsistencies in emissions data, underscoring the need for enhanced clarity and accountability.
Scope 3 Emissions and Industry Challenges
Today, companies are under growing pressure to report their Scope 3 emissions, which often exceed their direct emissions. Research from the World Economic Forum highlights that just eight supply chains account for over half of global emissions, creating significant challenges for global procurement networks.
- Scope 3 emissions include everything from supply chain processes to product usage and transportation.
- The difficulty in tracking these emissions can lead to disputes over data accuracy.
- Blockchain technology offers a potential solution for improving transparency and traceability.
Blockchain as a Business Solution
Unlike its ordinary use in cryptocurrency, blockchain is finding applications in digital identity verification and emissions tracking. By functioning as a shared ledger, this technology allows multiple stakeholders to access and validate records, thereby reducing the chances of tampering.
For instance, retailers like Walmart have successfully implemented blockchain systems to enhance food safety. The time taken to trace products, such as U.S. mangoes, has been significantly reduced from days to seconds, illustrating blockchain’s efficiency in supply chain management.
Lessons from the Shipping Industry
The shipping industry has also explored blockchain’s potential. In 2019, Maersk’s Lars Kastrup promoted TradeLens as a tool for achieving higher transparency levels. However, despite initial enthusiasm, the collaboration with IBM was halted due to insufficient industry participation, limiting its commercial viability.
Emerging Use Cases and Revenue Opportunities
Recent discussions have speculated on blockchain’s ability to provide real-time emissions data by integrating sensors and tracking devices. Additionally, carbon credit markets are being explored as potential beneficiaries of advanced verification technologies.
- Instant emissions data capture is feasible with blockchain.
- Carbon markets are under scrutiny but offer opportunities for new technologies.
- Companies may find new revenue streams through verification and reconciliation of emissions data.
The Road Ahead for Blockchain Adoption
Experts view blockchain as more than just an infrastructure solution. Developers are proposing that verification processes could generate revenue, transforming internal checks into marketable services. However, industry experts caution that effective governance and dispute resolution are essential for building trust in blockchain systems.
The future of blockchain in supply-chain emissions tracking appears contingent upon its evolution into a fundamental infrastructure versus remaining an experimental endeavor. This will depend on ongoing support from stakeholders and financial commitments to drive widespread adoption.
