A Global Green Deal: Blockchains for a better planet
Climate change is the world’s most important issue: it affects us all, no matter where we are from or what we do. The urgency is real and many actors are joining the conversation. Blockchain-based industries are acknowledging the potential and starting to make a change.
NGO´s are leading the discussion, while governments aim to step-up and deliver solutions. However, industries are important players: as pollution and contamination sources, they are being called to come up with production alternatives that can offset climate change.
Most of the world’s current environmental issues can be traced back to industrialization, particularly after global economic activity’s “great acceleration” that starting escalating all types of industries into massive production around the 1950s.
Nowadays we are facing the consequences of this great and accelerated period of industrialization while showing no signs of lowering technological development., As the Fourth Industrial Revolution (4IR) marches forward, with innovations appearing faster, becoming more efficient and widely accessible, we are merely starting to realize the importance of conscious economic development.
We all know that there is no planet B. Nevertheless, we have come to a level of development where we have means available with the potential to transform one of the pillars of human interactions: transactions.
We continue moving towards a society that seeks to digitize all sorts of interactions, building a parallel digital world next to our analog reality. That is why establishing a system that can improve the efficiency of our transactions while lowering our environmental footprint is key. This is another planet: the digital one. Our planet B is Blockchain and must lead to a better one.
Blockchain is a Decentralized Ledger Technology (DLT) system that creates a cryptographically secure and immutable record of any transaction of value, whether it be money, goods, property, work or votes. This potential to fundamentally redefine how business, governance, and society operate has generated considerable hype about Blockchain.
In recent years, it has established itself as a foundational instrument for the Fourth Industrial Revolution, much like the internet was for the previous (or third) industrial revolution.
Thanks to the decentralization of the blockchain and the way it operates through several connected servers in a network, there is more transparency in all the value chains supported by the digital ledger, allowing a more efficient interconnection and information exchange.
This logic has raised enthusiasm about blockchain’s potential to support global efforts to advance environmental sustainability. Big players have analyzed the perks of implementing DLT to renovate traditional systems, given the efficiency gains that it could bring.
In September 2018, the World Economic Forum issued the Building Block(chains) for a Better Planet report, that identified 65 existing and emerging blockchain use-cases that could offer transformative solutions to some of the world’s global environmental challenges.
How can Blockchain contribute to saving the planet?
Some of the cases presented in the report focused on the innovative potential of DLT to digitize supply chains in a transparent manner (addressed as “See-through”), with full traceability of sources and outcomes leading to a more accountable system, more valuable for the consumers and the regulatory authorities.
Moreover, it offers decentralized and sustainable resource management, adding to the optimization of the supply-and-demand value chains building resilience and more sustainable production-consumption systems.
The described potential of blockchain to improve the transactional realm can be also applied further in the supply chain, offering to the consumers sustainably monitoring, reporting and verification. Informed and smart consumption is as much important as conscious production, and thanks to blockchain, both the industries and the consumers can track the footprint of goods and services in the environment. The information can be filtered up to the board level while offering a more comprehensive picture of risk management and incentive profiles.
All of these cases are evidently a great hope for the environment and the industries, given that they can transform most of their operations to make them more efficient and reliable while offsetting the negative consequences that once could have not to be neutralized.
However, the discussion is leading to digitization through the blockchain of one of the most important industries in the world: finance.
The Future of Capital Markets: Sustainable Finance
Blockchain-enabled financial systems could potentially revolutionize capital access and unlock new investment potential thanks to the possibility of open and transparent access to markets. This can sustainably raise trillions of new sources, thanks to the “token economy”.
With this new possibility of digital fractional ownership, blockchain can facilitate a system shift from shareholder to stakeholder value and can expand traditional financial capital accounting to also capture social and environmental capital.
From art to real estate, including commodities and sustainability certificates, the way we invest will change and improve thanks to the token economy. Tokenization has the potential of unlocking enormous amounts of capital that are being kept in illiquid assets from the traditional systems.
Collectively, these changes could help raise the monetary resources needed to finance a shift to low-carbon and environmentally sustainable economies (World Economic Forum and PWC).
Additionally, Decentralized Ledger Technology can incentivize circular economies, changing how raw material and natural resources are valued and traded. This can move important players to assign value to resources that were considered waste until now, creating a more sustainable and conscious production system.
Finally, on the base of tokenized assets, DLT can create new opportunities for carbon credit transactions, opening the market to a wider investor base, and give incentives to businesses to implement carbon neutral operational practices. This transformation of the carbon (and other environmental) markets, can overcome the limitations currently caused by intermediaries with less efficient systems.
All in all, there is great potential for using DLT and blockchain to boost a sustainable production-consumption transition. It not only provides a transparent, accountable and efficient system but also, democratizes and removes the hindrances for many interested investors, allowing a cross-border interaction of participants.
It is “Time for action”, as the COP25 Summit stated. And we know it. That is why we enable all types of business models across all industries and around the globe to embrace this change. micobo is a leading provider of White Label Solutions, focused on tokenized assets.
We are certain that only those that engage with this revolutionary technology will thrive in the future and will stand out as leaders for taking the initiative of implementing a green and sustainable system.
If you are interested in knowing more and how you can seize this once in a lifetime opportunity, get in touch!
About micobo GmbH
micobo GmbH is a leading European software company for Security Token Offerings and Blockchain Software Development. micobo provides fully compliant software solutions for Security Token Offerings and advises on structuring DLT- and Blockchain-based Securities.
Luisa Fernanda Agudelo, Communications Manager at micobo GmbH (lbmicobo.com).