This summer we experienced the hottest day in the history of UK temperature as parts of southern England saw temperatures over 40.2 Celsius for the first time. While some people felt like they were enjoying the type of weather typical of a tropical holiday, the reality was far grimmer.
In London, the mayor was dealing with several major incidents that saw the fire brigade report its busiest single day since the second world war. “Normally we get 350 calls a day, on a busy day we can get up to 500 calls. Yesterday the fire service had more than 2,600 calls a day.” The Met Office came with omens of greater peril as they warned of temperatures so high, they “could lead to serious illness or loss of life”.
And that is exactly what we saw. One model using hospital records estimates some 866 people may have died from heat-related illnesses over the hottest 48-hour period, a record we would hope is never broken, but likely will be with ever-increasing regularity.
Carbon is actually an umbrella term for various greenhouse gas emissions like CO2, methane, nitrous oxide, and F-gases. All of these are released through a wide variety of activities; burning fossil fuels like oil are the obvious one, but agriculture, deforestation, and industrial processes also contribute.
Businesses are among the main culprits for increasing humanity’s carbon emissions. But thankfully, companies coming into existence on the wave of Web3 are more conscious of such matters and are willing to put resources into creating a greener existence. This is an important part of a company’s CSR or Corporate Social Responsibility. And by that, we mean the internal regulations a business puts in place to hold itself responsible, whether that be to the public, the advertising agencies, its shareholders, or even to the staff within it.
If you have been in investing circles the last few years, you might have come across another term known as ESG, or “Environmental, Social Governance”, which was very similar. ESG is a way for potential investors to screen a company, to see if they align with your beliefs. To do this, investors will take into account the company’s environmental impact which includes its carbon footprint (Environmental), and its relationships in the area they operate in, including with employees, suppliers, customers, and the wider community (Social). You also look at the company’s leadership, executive pay, shareholder rights, audits, and internal controls (Governance).
However, despite the claims that companies have been going green, independent watchdogs have found numerous companies have used ESG as a way to portray a more favourable image while maintaining practices diametrically opposed to it. From Volkswagen claiming to have the lowest emissions, when in fact they deliberately installed faulty detection devices that recorded inaccurate readings, to Coca-Cola’s “Red to Green” environmental initiative doing nothing to stop it from being the world’s largest plastic polluter.
Scandals like this have caused what was once a genuinely forward-thinking standard to be met with derision. Those using the term are now met more with suspicion than praise. That’s where CSR comes in. CSR has become the next evolution in the way of thinking that ESG started. While ESG is more of a set of guidelines applied to an existing business, CSR is the business model in itself and we are seeing companies in the Web3 space embrace it in ways like never before.
Market research at a company I used to work for showed that based on the opinions of 75,000 people, 71% were more willing to make smaller returns on investment if the company was more environmentally friendly. With such an appetite for ESG investing, companies that not only promote their corporate social responsibility but actually live by it are set to do very well as the new cycle of generational investors enters the market. And if the trend is to continue, that desire will only get stronger as the years go by.
Web3 as you know is designed around making a more decentralised internet that isn’t controlled by a few powerful centralised entities that dictate everything. Communities are the backbone of this new internet, and if those communities are pushing for environmentally sound practices, then that’s what we are going to see.
Blockchain innovations are already helping existing companies improve their supply chains. I spoke to an ex-marketer for Unilever who told me exactly how it helped them.
When a fault with a product was detected, the normal practice was to recall every product in the region the fault was detected. This resulted in thousands of cases being recalled. It was time-consuming, wasteful, and expensive. But thanks to blockchain technology, they were able to pinpoint the exact shipment and its journey from harvest, to shop. The recall effort was vastly reduced and minimal in disruption.
To better show how this is possible, you just need to look at how cumbersome the supply chain is. Modern supply chains create mountains of paperwork. When it comes to the ocean freight industry, which makes up for 90% of shipped goods globally, IBM estimates that shipping requires “on average 30 signatures from different organisations and 200 instances of communication”.
Let that sink in. Forget the fact that paper-based processes are extremely vulnerable to manipulation and human error, it’s also incredibly bad for the environment. A system like that is constantly leaving itself exposed to delays and poor transparency that are just waiting to be logistical headaches.
Blockchain technology creates a clear, and transparent ledger of a product’s journey that can be easily traced, monitored, and remain secure. So, for Unilever, doing so allowed them to trace back the faulty product back quickly to identify any other potentially affected products and recalled them with far less disruption and cost than before.
But it is the transparency of the Blockchain that will stop companies from creating an ESG façade. The Blockchain presents the “truth” as an unbiased view of events because the trust in it is not on an individual or central entity, but on technology, cryptography, and mathematics.
Ethereum, and its coming move to a Proof of Stake blockchain, operates in such a way that requires significantly less energy than Bitcoin, and its ability to utilise smart contracts make it possible to program almost any kind of automated process onto it, making this an extremely viable entry point for businesses considering using blockchain technology.
The potential use cases for Blockchain technology are still being discovered, will your business be one of them?
Richard Mooney 