Blockchain Transforms Supply Chain Emissions Tracking with Improved Accuracy for a Fee
Blockchain technology is increasingly recognized for its potential to enhance supply chain emissions tracking, specifically regarding Scope 3 emissions. These indirect emissions, stemming from various activities across the supply chain, present significant tracking challenges for organizations. With the ongoing pressure to report these emissions, businesses are seeking improved accuracy and accountability.
Understanding Scope 3 Emissions
Scope 3 emissions often surpass direct emissions, which makes them critical for companies aiming to reduce their overall carbon footprint. According to the World Economic Forum, merely eight supply chains contribute to over half of global emissions. This information underscores the urgent need for better tracking methods.
- Examples of Scope 3 emissions include:
- Supply chain processes
- Product usage
- Transportation
The complexity of tracking these emissions often results in disputes over data accuracy, highlighting the necessity of solutions like blockchain.
Blockchain: The Solution for Accuracy
Unlike its primary association with cryptocurrencies, blockchain is making inroads into various sectors, including emissions tracking and digital identity verification. Acting as a shared ledger, it allows multiple stakeholders to access and validate records, significantly minimizing potential fraud.
For instance, Walmart has successfully adopted blockchain technology to improve food safety. The time required to trace items, such as U.S. mangoes, has been drastically cut from days to mere seconds, showcasing blockchain’s efficiency in managing supply chains.
Insights from the Shipping Sector
The shipping industry has also been exploring blockchain’s capabilities. In 2019, Maersk’s Lars Kastrup advocated for TradeLens to enhance transparency. However, the collaboration with IBM faced challenges due to limited industry participation, which affected its commercial success.
Emerging Use Cases for Blockchain
Recent discussions suggest that blockchain could enable real-time emissions data collection by integrating sensors and tracking devices. Additionally, as verification technologies advance, carbon credit markets may benefit from blockchain’s capabilities.
- Opportunities presented by blockchain technology include:
- Instant emissions data capture
- New revenue streams through verification services
The Future of Blockchain in Emissions Tracking
Experts believe that blockchain represents more than just a technical solution; it has the potential to generate revenue through verification processes. However, effective governance and dispute resolution are vital for establishing trust in these systems.
The future of blockchain in supply chain emissions tracking hinges on its evolution from experimental technology to a foundational infrastructure. Its success will rely on sustained support from stakeholders and financial investments aimed at fostering broad adoption.
