International companies, banks and fintech startups are teaming up to test whether blockchain technology can help unlock financial incentives that improve transparency and sustainability in supply chains.
The year-long project will trial the concept by using a shared data system for tea farmers in Malawi that supply Unilever and UK-based supermarket Sainsbury’s. The same system will also track the materials produced for the tea’s packaging, provided by global sustainable wood fibre products company, Sappi.
The cutting-edge technology has been developed by a collective of startups including the blockchain-based supply chain services firm Provenance. Other partners include the fintech startups Halotrade, Landmapp and FOCAFET Foundation, the UK’s Department for International Development and the global banks Barclays, BNP Paribas and Standard Chartered.
The group is being convened by the University of Cambridge Institute for Sustainability Leadership (CISL).
The pilot aims to show how this application of blockchain and other technologies has the potential to be scaled up for a range of different global supply chains. If it’s successful, it could benefit the 1.5 billion families who depend on small-scale agriculture worldwide, according to Provenance.
“This innovative new technology will help us to increase sustainable sourcing, enhance the livelihoods of the smallholder farmers we work with around the world, and help to make sustainable agriculture mainstream,” said Keith Weed, Unilever’s Chief Marketing Officer and Head of Sustainable Business.
The project will allow retailers to track and prove social sustainability claims in their supply chains, empower banks to finance good practice and lower costs in the supply chain, as well as enabling customers to understand the impact of their purchase.
“This technology has the real potential to help banks access more detailed and more reliable information about social and environmental impacts in a secure way, throughout the entire supply chain,” Marguerite Burghardt, Head of the Trade Finance Competence Center at BNP Paribas, said in a CISL statement.
“This will enable financial institutions to broaden the scope of their financing offers and to propose financial incentives to their customer clients, based on their environmental and social standards.”
CISL unveiled the project at the One Plant Summit in Paris, which was held two years to the day after the historic Paris climate agreement was concluded.
Image credit: USAID Nepal via Flickr