COMMENTARY

How entrepreneurs can use blockchain, IoT for good

How entrepreneurs can use blockchain, IoT for good

By Veronica Garcia, CEO and founder of BitLumens

It appears that many businesses are doing all they can to become more socially responsible.

Realizing that investment in social good can help them build brand awareness and brand loyalty, it is becoming more common to see companies create social responsibility departments, which promote social good.

In some cases, these businesses have been courageous enough to amend their existing business strategy in order to create these departments, adding goals surrounding social responsibility to their financial targets.  

A good example of this is asset managers, who have refocused their brand and corporate identity towards greener types of asset allocation.

The reaction to these rebranding efforts have been mixed, but there's been enough positivity to suggest there’s a market for these funds

Unfortunately, many more asset managers continue to invest in businesses, which appear to have put little thought into social and environmental responsibility.

Asset managers aren't the only businesses, which are switching their focus to consider social responsibility as well as earnings. It's become increasingly common for multinational corporations across various industries to report on sustainable development goals, with specific objectives that include ending poverty, fighting gender inequality and reducing other negative scenarios experienced by society.

Institutional investors, such as pension funds, asset managers and insurance companies could make their portfolios greener by investing in more companies which report these metrics.

How blockchain and the Internet of Things can help

Blockchain technology can help companies report on their sustainable development goals, as well as their carbon disclosure with added accuracy and reliability.

Companies can install sensors, which communicate with each other to create specific and predefined conditions within their energy systems, as well as measuring carbon emissions and particulate matter.  With the magic of IoT technology, these sensors can send this data to the immutable ledger within the blockchain. The authenticity of this data can be verified and proven using this decentralized network, shedding light onto the carbon credit sector, which has a history of incomplete figures and incomplete knowledge  

SDG reporting also can be monitored and reported through the blockchain. This is a particularly important tool to allow utility companies to operate in remote areas. By having access to reliable data surrounding the power generation, carbon mitigation and how much people pay for electricity in a particular location, utility companies can create better economic models to introduce improved technologies in these areas.

Once again, the immutable nature of this technology adds a transparency, which can allow institutional investors to have more trust in the companies they are adding to their green portfolios. Better information will also allow institutional investors and policymakers to gain insight on the rate at which companies need to adjust, relative to their countries’ nationally determined contributions (NDC).

If governments build credibility by implementing their NDCs, it will raise the probability of further action to improve climate change. This arguably provides the best chance of reaching the goal for less than two degrees Celsius climate change this century, set in The Paris Agreement. Markets can then do what they do best and move the adjustments for NDCs forward, ultimately creating a stronger focus on social good.

This technology can help reduce climate change

Climate change is a reality, a consequence of human activities that contributes to increasing concentrations of greenhouse gases (GHG) in the atmosphere. It's an issue that will only get worse if industries across don’t become more socially responsible.

Institutional investors can play an important role in addressing this, by shifting their asset allocation towards cleaner investments of companies which address and report on their sustainable development goals using blockchain and IOT technology.

Image via Istock.com.


Topics: Blockchain, Retail, Software


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