Opinion: Why blockchain is vital to boosting sustainability
Palm oil has risen in infamy as an enemy of sustainable agriculture over the past few years. It has long been a key raw material in many consumer goods products, but its production has come to be very negatively associated with climate change and human rights, making it a highly controversial commodity.
Around 90% of palm oil plantations are found in a few islands in Malaysia and Indonesia, which are home to a diverse range of flora and fauna that are key contributors to earth’s biodiversity. As the demand for palm oil increases, so does the need for space in which to plant the trees, which often leads to illegal deforestation.
Fires are generally used to clear the existing vegetation, which not only damages the ecosystem but also releases high levels of carbon dioxide and black carbon into the atmosphere, contributing to climate change. In addition, the smoke resulting from deforestation is often cited as a main air polluter in Southeast Asia, and the processing of palm oil has also led to freshwater pollution.
The impact doesn’t stop there. In addition to the environmental impact, the palm oil industry has often been criticised for violating human rights within its supply chains, with some corporations accused of taking advantage of the underdeveloped countries from which the oil originates.
Consumers and regulators demand action
Due to these environmental and social concerns, consumers and regulators have shifted their view on the palm oil industry and are now applying pressure on enterprises to provide more data on provenance and supply chain mapping.
In December 2020, the US Customs and Border Protection (CBP) issued a withhold release order on imports of palm oil from Malaysia’s Sime Darby Plantation, the world’s largest palm oil company by land size, over allegations of forced labour in its production process. The withhold release order issued will remain in effect until Sime Darby can prove that this is not the case.
This is just one example of what we can expect to become the norm in the coming years, as regulators, investors and consumers continue to demand more when it comes to supply chain transparency and sustainability. The question is, how can producers, processors and retailers verify and prove their environmental and sustainability practices throughout their entire supply chains?
How blockchain can play a key role
Blockchain could play a key role in helping enterprises to provide such evidence. Blockchain is the technology behind a distributed network of computers that can be used to store data securely but which, uniquely, has a single memory – a single source of truth. That means data cannot be freely copied and edited to create an alternative version of the truth, which is why blockchain technologists refer to it as the “trust platform”.
Using blockchain-powered solutions to map and trace their supply chains, palm oil producers could provide reliable, transparent, and data-backed sustainability credentials. This data can be readily available in near real-time, guaranteeing that products would not be held under suspicion.
Finboot’s MARCO , a blockchain solution that delivers out-of-the-box applications to enterprises, could be the innovation that the palm oil industry needs. MARCO has a track record of being used by large enterprises, including global energy giant Repsol and global chemistry supplier Stahl, to digitise their supply chains and bring transparency and trust to these industrial sectors.
Against a backdrop of ever-increasing scrutiny, building a blockchain-based library of data that is gathered from the length of the supply chain will ensure that companies are able to verify their sustainability credentials and boost their brand value among all stakeholders.
Finboot is the dynamic SaaS company behind MARCO, a unique production-ready suite of blockchain applications and middleware solutions for value and supply chains, with operations in London and Barcelona. Juan Miguel Pérez Rosas is Finboot's CEO, whil e Edoardo Cantoni is the Business Development Manager.
Four CPG giants to fund sustainable accelerator programme
Breakthrough ideas can come from anywhere and anyone. That’s the premise behind the coming together of The Coca-Cola Company, Unilever and Colgate-Palmolive in the funding and support of world-leading brewer AB InBev’s 100+ Accelerator program.
These four consumer packaged goods multinationals will leverage both their size and resources to fast-track a shift toward sustainable solutions by mobilising some of the world’s sharpest thinkers to solve some of the world’s most pressing sustainability challenges.
The aim of this collaboration is to “supercharge adoption of sustainable solutions by funding the accelerating fantastic innovations that will change the world by making all of our businesses more sustainable”, says Tony Milkin, chief procurement, sustainability and circular ventures officer at AB InBev.
“Sustainable business is smart business, and we are working to solve huge problems that no one company can handle alone. With our combined global reach, we can accelerate progress towards a more sustainable future.”
What is the 100+ Accelerator program?
Originally launched in 2018, 100+ Accelerator is a global incubator program that aims to solve key supply chain challenges across water stewardship, circular economy, sustainable agriculture and climate action.
It offers size and scale to passionate entrepreneurs to help bring their solutions to market faster, and the program’s first two cohorts have already piloted 36 innovations in 16 countries, with participating startups raising more than US$200m to help them scale globally.
Among the established innovators are those already creating huge impact on sustainability, with projects including the first solar thermal plant in Africa, recycled electric vehicle batteries that store renewable electricity in China, and upcycling saved grains from the brewing process to produce nutritious foods in the US.
- The implementation of green cleaning solutions to reduce water and energy use in brewing operations in Colombia
- Solutions delivering traceability and insurance for smallholder farmers in Africa and South America
- The collection of more than 1,000 tons of glass waste in Brazil
- Piloting returnable packaging in the United States
- Recycled electric vehicle batteries that store renewable electricity in China
- The ability to upcycle saved grains from the brewing process to produce nutritious foods in the United States
- The first solar thermal system to be installed at an AB InBev plant
How will the new program work?
So, how does it work? Applications are invited from entrepreneurs or small businesses (deadline for cohort 3 is May 31 2021) and the partners will choose 20-25 ideas which are then provided with funding.
Project aligned with goals of the CPG multinationals
The participation by all three consumer packaged goods giants is in line with each of their own sustainability goals, with each passionate about transforming global supply chains towards a greener future, and knowledgeable that “we can achieve our purpose faster and more effectively with equally committed partners”, says Patricia Verduin, CTO of Colgate.
Since launching its World Without Waste sustainable packaging platform, Coca-Cola has actively engaged the startup community for inspiration and innovation and is an inaugural investor in Circulate Capital, a fund launched in 2019 focused on ventures, infrastructure and innovations preventing the flow of plastic into oceans.
The program’s social inequality component is also aligned with Unilever’s values. “This year, we made commitments to ensure that everyone who directly provides us with goods and services receives a living wage by 2030,” says Marc Engel, chief supply chain officer of Unilever. But that’s not all. “We’re increasing our spend with suppliers from underrepresented groups and committed to train 10 million young people.”