When watching the Earth Week panel discussions on YouTube I tuned in to some of the thought leaders in Blockchain and it forced me to focus on the threats of our changing environments and how projects are trying to support some of the most unfairly impacted.
Rene Reinsberg, President of the Celo Foundation recognises that climate and economic opportunity are linked. As a technology, money is essentially software. Blockchain can reinvent the financial system and provide positive benefits through external factors. Climate change is driven by human behavior and it is not impacting people in a fair way.
Reinsberg describes Web3 as “…a toolset for mass co-ordination.” This collective approach to solving some of the world’s biggest problems is a new way to consider the potential of humans when tackling the climate crisis.
In a world where success increasingly depends on reputation and trust, why is greenwashing so common?
Greenwashing refers to making unsubstantiated claims about sustainability and environmental practices to improve corporate image. As a result, regulatory bodies around the world are increasing their scrutiny and enforcement of ESG metrics reporting, with fines for violations sometimes exceeding US$1 million, as issued by the SEC.
Also Read: How Singapore is leveraging technology to become a sustainable fashion hub
However, reporting on greenwashing is challenging as organisations often struggle to measure and track relevant data points in an efficient and reliable way. This lack of standard metrics and transparency makes it difficult for consumers to trust the data and for regulators to distinguish between genuine and false reports.
Blockchain technology can help address this issue by providing transparent data recorded efficiently and automated reporting of various data points related to an organisation’s ESG tracking.
Blockchain and Web3 Technologies funding climate solutions
Blockchain and Web3 technologies are at the forefront of a movement towards increased transparency, which can help achieve the goals set by the Paris Climate Accord and the United Nations Sustainable Development Goals. Blockchain projects are providing a foundation for structural changes that support cultural climate awareness, climate policy-making, and individual commitments to sustainability.
Today, it is dangerous to ignore the urgency of climate change. As the only place with a continuous life cycle, Earth is being harmed by all kinds of destructive actions. We need to act now to save our home and ensure a healthy environment for both living and nonliving creatures.
Imagine a world where recycling is not only easy but also profitable. With a blockchain-based recycling program, you can earn tokens in exchange for dropping off recyclables like plastic containers, cans, and bottles. It’s already working in Northern Europe, and the rest of the world needs to catch up.
Furthermore, conventional power networks are centralised, leading to energy delivery inefficiencies and power outages in areas devastated by natural catastrophes or poverty. A blockchain-based peer-to-peer power system can shift electricity remotely from where it’s generated in excess to where it’s needed, reducing the need for energy storage and fossil fuels.
Incentivising organisations to be transparent
The environmental footprint of products is also impossible to determine in the existing system, and its carbon emissions are not reflected in the price. But with blockchain technology, each brand’s carbon emissions can be monitored, and the amount of carbon tax to be levied can be calculated at the time of sale. This will encourage purchasers to choose environmentally sustainable items and incentivise corporations to reorganise their supply chains.
And finally, blockchain can make supply chains more transparent, tracing products from the factory to the store and reducing waste, inefficiencies, fraud, and unethical behaviours. Consumers will have a better understanding of how each product was created and distributed, allowing them to make more ecologically conscious decisions.
We have the technology to save the earth, and we need to use it. Let’s act to ensure a sustainable future for our planet.
Four organisations connecting blockchain with climate solutions
The Celo Foundation
Celo is the carbon-negative, EVM-compatible blockchain ecosystem. Their primary goal is to enhance the capacity for refi applications on the Celo blockchain. During the Global Impact Investing Network Investor Forum in The Hague, the Celo Foundation, based in the U.S., unveiled its “two per cent for Web3 Impact” commitment.
Also Read: Understanding the role of fintech, blockchain in transitioning to net zero
This initiative, developed within the Foundation’s Social Impact Collective, is an industry-wide effort that aims to assist in the onboarding of over 100 impact investors to Web3 and facilitate their first investment in the field or offer liquidity to impact lending protocols.
Ethic hub
A noteworthy example of a regenerative finance initiative that utilises smart contracts for crowd-funded impact investing is Ethic Hub, a company that originated in Spain and is redefining traditional microfinance.
Ethic Hub provides small-scale loans to farmers who have limited financing options and were previously subject to high-interest rates of up to 100 per cent. With a minimum investment of only around US$20, Ethic Hub uses blockchain technology to democratise impact investing and minimise investment risks through its native token, Ethix, which serves as a backup for Ethic Hub’s compensation pool.
Since its establishment in 2018, Ethic Hub has financed 450 projects, deployed US$3 million in capital, and generated a 1.2 per cent default rate and a nine per cent return to investors.
Climate Collective
The Climate Collection provides grant funding, community education, and collaboration with members to promote various impactful products and protocols that advance the Regenerative Finance ecosystem. Our goal is to encourage the adoption of ReFi and shift perceptions about the blockchain industry by engaging with climate enthusiasts and crypto participants.
Together with our members, we aim to create an all-inclusive ReFi Stack that surpasses its individual components, to foster a Web3-native financial system that promotes ecological regeneration alongside economic growth.
Digital Art 4 Climate
DigitalArt4Climate is an initiative involving multiple stakeholders that leverages blockchain technology (specifically non-fungible tokens/NFTs) to transform artwork into digital assets that can be collected and traded.
By doing so, it creates a social and technological innovation space that allows for unique possibilities to mobilise resources in support of the implementation of Sustainable Development Goals/Agenda2030, particularly in the area of climate action empowerment.
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