by Alexandra Oborina and Elisa Dresen

Blockchain technology today is still in its early stages, but it promises a giant potential for many sectors of the economy: Financial Services, Resources, Public Services, Commerce, Consumer Data, and more. Gartner’s 2016 Hype Cycle for emerging technologies identifies blockchain to be at innovation peak with mainstream adoption in five to 10 years.

What is blockchain?

A blockchain is a ledger of transactions arranged in data batches called blocks. Each block contains many transactions within. Blocks use cryptographic validation to link themselves together and form an unbroken chain (hence the name of this technology). The formed ledger is not stored or managed by any third party, but instead it is distributed among many different network nodes.

Recently, blockchain became a popular technology utilized by entrepreneurs and very early adopters. One of the biggest start-up conferences, Slush 2016, established a new peak of blockchain entrepreneurs: 29 startups out of 2000+ at Slush 2016 presented their innovative solutions using blockchain technology and it gained the interest of participants, venture capitalists and angel investors.

Today blockchain advantages are primarily used in Fintech, computer programs and other technology used to support or enable banking and financial services. But reality shows that blockchain is also increasing its momentum in sustainability starting from the year 2016.

Blockchain and its uses

Accenture Technology Labs identified that blockchain will be a key technology for its Platform Economy and Digital Trust programs. In the past trust was an expensive pursuit, but in the modern shared economy trust is one of the core principle and the future most valued currency. Blockchain is often described as a “transfer of trust in a trustless world,” meaning that the involved entities are not necessarily known to each other while they exchange information via decentralized, replicated, shared and cryptographically secured operations validated by mass collaboration. Blockchain does not need to rely on any centralized third parties and removes the barriers to entry or the reliance on centralized systems.

Sustainability, in brief, is the way a company or organization creates value for its shareholders and society by reducing negative impacts and enhancing positive impacts on social, environmental and economic issues. One important aspect in this regard is to trace the positive impacts, i.e. how can material or service flows be traced and transparency promoted to differentiate and (re-) build trust?

The advantages of blockchain – transparency, privacy and security – help to solve the challenges in the field of sustainability and social impact. Let’s consider the illustrative examples that shape current technology landscape of sustainability

Transparency in the supply chain

One of the leading examples is Provenance, a UK based startup that helps retailers, manufacturers and restaurants prove the origins of their products. Provenance is building a traceability system for materials and products in the form of a data platform helping to certificate, track and trace the origins of goods or animals (like tuna fish). The company uses blockchain technology to establish transparency throughout the value chain and understand the key drivers of trust that matter for the stakeholders.

Decentralized energy system with local energy trading using microgrids

One of the example of this kind is LO3 Energy, a startup that is currently supported by Siemens Digital Grid in developing a solution for a blockchain-based microgrid platform in Brooklyn New York. Blockchain technology will make it possible for a provider to feed its excess electricity back into the existing local grid and receive payments from the purchasers in secure, private and robust manner. The platform will provide an opportunity for decentralized local energy trading between producers and consumers as well as balance out the local production and consumption.

This blockchain solution permits transparent, trustful and efficient trading between multiple participating systems and various stakeholders while taking into account grid-specific requirements.

Trustful voting

Voatz is a US based startup that enables citizens to vote in all kinds of elections and voting events using smart biometrics and blockchain solution though smartphones. This innovative mobile-focused election-voting platform helps to solve fundamental concerns for security, auditability and voter anonymity.

In this case, a highly optimized blockchain-based backend solution provides complete real time transparency, trust and irrefutability.

Trustful Digital identity

Due to the Syrian refugee crisis that happened in 2015, blockchain technology has been adopted to build a common ledger of digital identity in order to verify someone’s identity, to verify family members relationship and at the same time to allow granular control. One example among several that responded promptly on refugee identity crisis is Bitnation Refugee Emergency Response.

Considerations for the future

The examples discussed here illustrate the benefits in value chain visibility and fostering trust in a digital connected world which is a glimpse into the immense potential of blockchain technology. To be utilized on wider scale and demonstrate its full ability to solve great challenges in sustainability, this technology needs much more funding, higher levels of adoption, valuable business strategies and excellent execution. Blockchain could also be also considered for broader sustainability challenges – for instance in pursuing to achieve UN 17 Global Goals For Sustainable Development or Social Development Goals (SDGs) related to end extreme poverty, fight inequality & injustice and tackle climate change by 2030.

Alexandra Oborina is a strategy consulting practitioner with more than 10 years of practical experience in technology strategy, business development, software development and R&D across multiple industries globally. Currently, Alexandra a strategist at Accenture Technology Strategy practice helping local and international clients to develop and implement their business and IT strategies and driving technology enabled business changes. Before joining Accenture, Alexandra has been involved in R&D, leading the technology research at CTTC (Spain) and Nokia R&D (Finland). Alexandra holds PhD in Electrical Engineering from Aalto University, Finland, and an MBA from IE Business School, Spain.

Elisa Dresen is a strategy consulting practitioner with more than 10 years of experience from various industries who is passionate on sustainability topics. Currently, Elisa Dresen is a manager at Accenture’s Strategy Operations practice and responsible for sustainability strategy matters. Elisa holds a M.Sc. Economics and Business Administration in Supply Management from Lappeenranta University of Technology as well as degree in International Business from the University of Paderborn. She is also a certified Lean Six Sigma Greenbelt.