A Ben & Jerry’s store in London’s trendy Soho neighborhood is tackling climate change one scoop at a time. By making a small donation for each sale, and asking customers to do the same, the socially conscious retailer is using blockchain technology to facilitate carbon offsets on a microtransaction level.
Carbon offsets are just one way that companies around the world are demonstrating their commitment to corporate social responsibility (CSR). The Ben & Jerry’s pilot shows blockchain’s CSR potential in two ways. It allows customers and employees to directly participate in an opaque process once open only to large companies, and it provides proof that their efforts are going to a greater good.
Companies don’t always follow through with their pledges. But blockchain’s smart contracts could put those worries to rest.
“People often talk about authenticity in a brand. It has become more and more important for shoppers to see that their favorite brands live out the same values that they do,” Samantha Radocchia, co-founder of Chronicled, a company that uses blockchain and the internet of things (IoT) to help corporations with their supply chains. “And blockchain provides something that’s sorely lacking among brands at the moment: actual proof that sustainable, ethical, and responsible practices are being used.”
The Triple Bottom Line on the Blockchain
CSR focuses on the three Ps: planet, people and profit. Known as the triple bottom line, the emphasis on social responsibility has intensified in recent years, even in some surprising places. For example, BlackRock CEO Laurence Fink focused on CSR in his to the CEOs of the companies in which his $6 trillion investment firm invests.
“Society is demanding that companies, both public and private, serve a social purpose,” wrote Fink. “To prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society.”
IBM’s John Palfreyman outlined the ways in which blockchain can help companies demonstrate corporate responsibility: world-changing efforts require multiple businesses and partners, consensus to foster trust, a mutually accepted audit trail, immutability to prevent tampering and a system that eliminates disputes.
“Trust is the common element and net benefit from the application of blockchain to this business challenge,” Palfreyman, director of blockchain and national security of IBM’s CTO Team Europe. In May, IBM to develop a tokenized marketplace for carbon offsets; it has also worked with U.S. retail jeweler Helzberg Diamonds to track the production of diamonds.
A longstanding blockchain use case, supply chains are vital in CSR as consumers express concern about child labor and other unethical practices. The Responsible Cobalt Initiative, launched by Chinese metal importers and supported by tech giants such as Apple and Samsung as well as German carmaker Daimler, is focused on using blockchain to verify the provenance of the material used in batteries and other tech components.
A pilot announced earlier this year reportedly will employ low- and high-tech means to track the supply chain. , physical tags for cobalt will be entered into the blockchain using mobile phones at different stages of the complex mining and refining process.
Other companies are taking smaller initial steps. For example, technology service provider Softjourn experimented last year with a CSR initiative focused on another longstanding cryptocurrency fixation: vending machines. Softjourn created an internal token as part of an employee rewards program and converted a vending machine to accept it using wallets on employees’ mobile phones; employees will vote on what charities will receive the proceeds. “We want to be part of what will certainly be the future of currency and contract transactions, but why not also deploy it where it can do good?” CEO Emmy B. Gengler .
A common criticism of CSR is that companies don’t always follow through with their pledges, but blockchain’s smart contracts could put those worries to rest.
“It should become unacceptable not to have the visibility to control the results of their promises,” Massimo Lomuscio, cofounder of , which envisions its own token being used to enforce CSR pledges. “At the end, the customer has complied with his part of the social contract, so it’s fair for him to know the other side has done the same.”
Another blockchain venture has gone so far as to name its upcoming token CSR. envisions its blockchain-based social network and token allowing multinational brands to connect with customers around shared causes. Inpactor’s parent company, Incitement, which has worked with multinational brands including FedEx and Pepsi in Malaysia, has put Inpactor’s planned July ICO on hold, however, to continue developing the platform, company officials said.
BSR: Blockchain Social Responsibility
Then there’s the blockchain sector itself. Critics point to the carbon impact of large cryptocurrency mining operations, though several developers, including Poseidon, explicitly tout their use of the lower-energy Stellar platform. And some blockchain developers have begun their own CSR efforts.
ConsenSys, for example, launched the (BSIC) last year. BSIC works with NGOs, nonprofits, philanthropists and technologists to address the United Nation’s Sustainable Development Goals and “build social enterprises using innovative solutions to address some of the world’s most pressing issues,” Valeria Kholostenko, head of growth and global community for ConsenSys Social Impact, said in a .
Through conferences, incubators and hackathons, BSIC has focused on solutions such as localized blockchain access in areas with limited connectivity, identity and other services for refugees, and solutions for agriculture and in developing nations. ConsenSys also is working with the Sustainability International NGO to develop a for international development.