Blockchain Helps Supply Chain Management Become More Environmentally Sustainable

Blockchain Technology Increases Accountability for All Supply Chain Participants

Blockchain technology is emerging as the right solution to solve problems with supply chain transparency or lack thereof. Supply chains are complex global networks of autonomous entities that exchange goods, data, and payments across a continuously evolving business landscape. Given key structural similarities between blockchain technology and supply chain architecture, supply chain management is a perfect use case for blockchain technology. Using a decentralized network where participants can seamlessly exchange data from anywhere in the world, a blockchain permanently records all transactions using cryptography in order to prevent data tampering, fraud, double spend, and confusion over ownership of goods and assets.

 

While improving efficiency of supply chain management, blockchain has the potential to increase sustainability by inducing greater transparency—and by extension accountability—around environmental impacts such as working conditions for factory workers or vehicle pollution at industrial complexes.

Boosting Transparency on Environmental Impacts of Supply Chain Management

From an accountability perspective, increased visibility into supply chains as a result of incorporating blockchain technology will be environmentally sustainable, promoting better public health, food safety, quicker and more efficient recalls, and the assurance of ethics among trading partners. Gains in sustainability and transparency will result in increased accountability and thus reduced environmental impacts, stronger human rights, improved business ethics, better working conditions for industrial employees, and a keener sense of social responsibility among small and large businesses.

 

However, in terms of environmental impact, there is still much work to be done. Production line measurements need to be standardized and carefully recorded onto the blockchain to make this data accessible to all auditors. These measurements can help track products created outside of manufacturing tolerance, and thus identify any culprits further upstream in the supply chain. With the use of industrial IoT devices and smart sensors, production line measurements can help companies reduce the chance for costly recalls, cutting down on resource consumption and the resulting greenhouse gas emissions.

Everybody Wins: Workers, Consumers, Companiesand the Environment

Using blockchain to boost transparency and reputation, companies would be able to protect the environment and by extension, the millions of workers and their communities where they live and work. Blockchain enforces the necessary accountability in companies to place such protections. With increasing emphasis on social responsibility, preventing climate change, and preserving the local environment in which their employees work, companies—particularly manufacturers and suppliers—can no longer remain willfully ignorant of the environmental impacts of their facilities and supply chains.

 

Increased transparency using blockchain would make it easier to fight worker neglect, malpractice, fraud, and environmental negligence. Companies want to uphold their reputations and they will follow suit in building environmentally sustainable supply chains. Distributed ledger technology will forge relationships between businesses, workers, and consumers based on trust, transparency, and mutual economic benefit. Ultimately, businesses will take the lead in implementing blockchain technology in a commitment to creating sustainable supply chains in order to protect the environment and employee working conditions.

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