In November, global leaders met at the COP26 summit in Glasgow to discuss how to best meet goals to reduce carbon emissions on both a national and international scale and keep global warming within 1.5°C. However, the event made it clear that achieving carbon neutrality by 2030, or even keeping temperature change within 1.5°C, won’t be possible if organizations rely on current methods, which are producing faulty data.
It’s nearly impossible to conclusively track carbon output for one business, never mind along the entire supply chain, using the conventional Data Management systems currently in play. These solutions are severely lacking the data insights necessary to paint a picture of an organization’s true carbon footprint – they’re outdated, inefficient, and inaccurate, and they come with high costs. It’s time to upend the status quo to achieve emissions reduction goals.
Why Current Practices Just Won’t Cut It
The legacy systems in common use today are often siloed and emissions data is exported to a spreadsheet, which is then rolled into a final report. Not only is entering, recording, and making decisions off this data time-consuming and costly, but human error is inevitable – especially for companies that operate on a global scale. Minor mistakes oftentimes turn into large price tags, either from regulatory fines or missed credit opportunities.
Adding to the complication, current means of calculating, modeling, and measuring emissions vary on a wide scale. Not only do regulators set conflicting standards and rely on different equations to calculate emissions, but businesses themselves have their own methodologies in place. These obstacles make reporting emissions data even more challenging, including across the global supply chain, which has seen drastic increases in emissions in the past year.
Tracking Emissions Throughout the Supply Chain Is a Critical Step
Accurately tracking emissions along the supply chain requires businesses to monitor a multitude of data sources spread across various sectors, organizations, and locations. Managing such large amounts of data between so many different players is a massive challenge for businesses and regulators alike. As such, tracking initiatives rarely encompass every emissions concern. It’s easy for data to get misplaced, misconstrued, or simply lost in translation.
The pandemic has only worsened this problem. Global supply chains are paralyzed by increased delays and logistical inventory nightmares while operating as efficiently as possible to get products to consumers. These issues make it extremely difficult to paint a complete picture of a business’s emissions situation, at a time when business leaders are being called upon to take more strategic action now.
To ensure they are remaining compliant, many companies reduce their emission reduction efforts by as much as 50% and lose out on remediation credits. Leaders end up making important decisions based on inaccurate data and sustainability projects often end up either underfunded or abandoned. Not only does this take away from the accomplishments of emission reduction initiatives, but it also hinders the bottom lines of everyone involved.
Blockchain Can Help Solve These Problems
Blockchain technology is effective in remedying these problems. As a decentralized, immutable ledger where data can be inputted and shared at every point of action, blockchain works by storing information in interconnected blocks and provides a value-add for insuring carbon offsets. This creates a chain of information that cannot be hacked and can be transmitted between all relevant parties throughout the supply chain. Key players can enter, view, and analyze the same data points securely and with the assurance of the data’s accuracy. In addition, the technology can identify patterns of error, giving actionable insights into where systems or humans may be contributing to the problem.
Data needs to move with products throughout the supply chain to create an overall number for carbon emissions. Blockchain’s decentralization offers value to organizations and their respective industries so that more, reliable data can be shared between all parties to shine a light on the areas they need to work on, such as manufacturing operations and the offsets of buildings. Baking blockchain into day-to-day business practice is key in identifying patterns over time and making data-backed decisions.
Blockchain’s Capabilities in Tracking Carbon Emissions
For reporting on carbon offsets, businesses can integrate an enterprise network that connects all aspects of emissions tracking. Enterprise blockchain solutions make reporting more efficient and accurate than ever before, so they can use that data to make better decisions on their operations. These solutions are both extremely secure and entirely scalable. These networks are cloud-agnostic, allowing for the collaboration necessary to properly track emissions data and add new business processes.
By helping users comply with regulations, collect better data, achieve their sustainability goals, and save on valuable credits, blockchain solutions are and will be an effective technology for helping businesses reduce emissions, better understand their emissions statuses, and make receiving remediation credits that much easier. Recording important data will only benefit the regulatory landscape itself. Regulators can use blockchain solutions to access accurate data to hold business leaders accountable, keep their sustainability promises to the public, and ensure that society is consistently meeting emissions goals. In this way, blockchain has the power to streamline and advance sustainability initiatives.
Carbon Neutrality Is a Team Effort
To solve the climate crisis, confidence in emissions data is crucial. Blockchain provides that as well as transparency and reliability, all while maintaining the highest levels of security. The technology provides assurance that the data from other smart technologies, like connected sensors and IoT, is trustworthy and accurate.
Gatherings like COP26 provide forums where global leaders can come together, discuss the steps needed to meet a common goal, and help identify current challenges and solutions. However, measurable action towards those goals requires adopting technologies like blockchain to demonstrate and report on progress. Net zero can make processes that much more efficient and automated as it enables peer-to-peer transactions that improve sustainability for entire industries.