Blockchain technology is becoming instrumental in enhancing supply chain emissions tracking accuracy, particularly concerning Scope 3 emissions. These indirect emissions are generated through various activities within the supply chain, making accurate tracking a formidable challenge for organizations. As the pressure mounts for businesses to report emissions, the need for better accuracy and accountability in tracking becomes increasingly critical.
Understanding Scope 3 Emissions
Scope 3 emissions often exceed direct emissions, making their management essential for companies aiming to lower their carbon footprint. The World Economic Forum has indicated that just eight supply chains are responsible for over half of global emissions. This statistic highlights the pressing need for effective tracking solutions.
- Supply chain processes
- Product usage
- Transportation
Due to the complicated nature of tracking these emissions, disputes over data accuracy frequently arise, emphasizing the necessity for innovative solutions like blockchain technology.
Blockchain: A Solution for Enhanced Tracking
While commonly linked to cryptocurrencies, blockchain is making substantial progress in various sectors, including emissions tracking and digital identity verification. As a decentralized ledger, it enables multiple stakeholders to access and validate records, which significantly reduces the risk of fraud.
Notably, Walmart has effectively utilized blockchain technology to enhance food safety. The time required to trace items, such as U.S. mangoes, has dramatically decreased from several days to just seconds, showcasing blockchain’s efficiency in supply chain management.
Insights from the Shipping Industry
In the shipping sector, blockchain’s advantages are being examined closely. In 2019, Maersk’s Lars Kastrup promoted TradeLens as a tool for increased transparency. However, its partnership with IBM faced challenges due to limited participation from industry players, which impacted its commercial viability.
Emerging Use Cases for Blockchain
Recent discussions indicate that blockchain could facilitate real-time emissions data collection through the integration of sensors and tracking devices. Moreover, advancements in verification technologies may enhance the carbon credit markets through blockchain’s capabilities.
- Instant emissions data capture
- New revenue streams through verification services
The Future of Blockchain in Emissions Tracking
Experts argue that blockchain offers solutions beyond technical applications; it holds potential for revenue generation through verification processes. However, establishing effective governance and dispute resolution mechanisms is crucial for building trust in these systems.
The future of blockchain in supply chain emissions tracking will depend on its growth from experimental use to a core infrastructure. Successful adoption will require ongoing support from stakeholders and financial investments to promote widespread utilization.
