Climate change is an existential threat to all life on Earth. We can’t fully avoid it, but what we do today will determine how bad it gets in the upcoming decades. It’s up to us — yes, all of us — to take action.
The good news is that there are many ways you can be more eco-friendly. Here, we’ll go over how you can use blockchain to implement sustainable practices in your business — without hurting the bottom line.
We’ll start by explaining what we mean by “sustainable business practices” and then give you an overview of what blockchain is, how it can support sustainability efforts, and the challenges it still needs to overcome.
TL;DR — Key Takeaways on Blockchain and Sustainability
- Implementing sustainable business practices can help you boost customer loyalty and trust, employee productivity, and revenue.
- Blockchain can support sustainability efforts through decentralization, transparency, traceability, immutable records, and smart contracts.
- Blockchain still has a long way to go but the two biggest challenges — lack of real-world applications and sustainability — have been overcome.
Here’s how you can get started today:
- Buying carbon-offsetting tokens, like Poseidon, 1PLANET, Toucan, MCO2, or Nori, is the most common way of implementing sustainable business practices with blockchain.
- Another popular use of blockchain for sustainability is managing waste and supply chains sustainably with solutions like Eiravato, cirplus, Empower, or BanQu.
What Do We Mean by “Sustainable Business Practices”?
Sustainable business practices are economically viable, socially responsible, and environmentally friendly, according to the University of North Florida’s Center for Sustainable Business Practices.
So, no, you don’t have to forego profit to be sustainable!
In fact, studies have shown that most companies that go green experience a productivity and revenue boost:
- According to Forbes, 88% of consumers will be more loyal to a company that supports social or environmental causes and 92% are more likely to trust a company that supports these causes.
- Employees at eco-friendly companies are 16% more productive, which can lead to revenue growth of up to 6%.
- Corporate responsibility practices can increase overall sales revenue by up to 20%, according to the Harvard Business Review.
Ultimately, sustainable business practices can help you:
- Reduce energy costs
- Get positive media coverage
- Improve brand image
- Attract highly-motivated workers
- Gain customer preference
- Turn into the preferred supplier for government agencies and other businesses that want more sustainable products and services
- Land special loans or grants and tax credits or rebates
No matter the industry your business operates in, there are several ways you can implement sustainable business practices. For example, you could go for internal efforts, like reducing energy usage, or external efforts, like switching to green vendors or suppliers.
So, sustainable business practices can strengthen your business while helping the planet, but what exactly is blockchain? And how can it be used for sustainability? That’s what we’ll go over next.
What Is Blockchain Technology?
A blockchain is a distributed, unchangeable ledger that’s spread among the nodes of a peer-to-peer network. These systems can be used to record transactions and track assets in a business network in a secure and decentralized way.
Pretty much anything can be tracked and traded on a blockchain network. For example, it can be used to trace and verify the carbon emissions and other environmental measures of an organization or supply chain.
This is a clear-cut example of blockchain being used for sustainability. But there are many other explicit and implicit ways this technology can help you implement sustainable business practices.
How Can Features of Blockchain Support Sustainability Efforts?
In 2021, the UN recognized that blockchain can play a major part in advancing and achieving Sustainable Development Goals (SDGs) worldwide. But it doesn’t need to be employed nationally or globally to make a positive impact.
No matter the size of your business, there are ways you can start using blockchain to support sustainability efforts.
Next up, we’ll go over the features that make blockchain a powerful eco-friendly ally and give you some real-life examples of how you can leverage it in your business.
Decentralization is one of the most talked-about features of blockchain. It removes the need for central authorities or intermediaries, making transactions faster and more efficient.
For example, this feature can be used to manage renewable energy systems so that individuals or businesses can sell excess energy to peers within the same network.
Plus, these systems reduce reliance on centralized power grids, boost the use of renewable energy sources, and allow remote communities to access clean energy.
2. Transparency, Traceability, and Immutable Records
Every single transaction on a blockchain is recorded on an immutable ledger that all authorized network members can access. This ensures transparency, traceability, and accountability.
Blockchain can be used for sustainable supply chain management, for instance. This way, sustainable practices can be enforced, businesses can be held accountable for their environmental impact, and customers can make informed buying decisions.
3. Smart Contracts
Smart contracts are self-executing programs on a blockchain that automate the contract enforcement once certain conditions are met.
They can be used to automate the process of buying and selling carbon credits in carbon offsetting programs. This is a great way to completely offset or at least reduce your business’s carbon footprint.
Blockchain Infrastructure and Sustainability: Challenges & Limitations
Blockchain has immense potential — not just for sustainable business development, but to increase automation, integrate physical and virtual worlds, and transform social interactions and public institutions.
However, there are still some challenges and limitations hindering the mass adoption of this technology.
In the past, the main criticism blockchain got was that it was mostly used for “speculative gains in crypto-financial assets instead of creating real value through new products and services.” Thankfully, the industry has come a long way.
Nowadays, the challenges and limitations that are commonly pointed out include a lack of scalability and regulations, security concerns, high complexity, and interoperability difficulties.
Environmental challenges have been by far the greatest issue with this technology, though.
You see, blockchains powered by the proof-of-work (PoW) protocol (e.g., Bitcoin) use up too much energy and have a huge carbon footprint due to the short lifespan of mining devices.
Fortunately, these problems started being addressed in 2022 by migrating platforms into the more energy-efficient proof-of-stake (PoS) protocol, which can reduce energy consumption by 99%.
2023 has been tipped as the year that blockchain becomes fully sustainable.
What Does This Mean for Your Business?
Technological revolutions offer windows of opportunity for businesses to catch up to their competitors — or even get ahead. And as we’ve talked about above, research shows that focusing on sustainability can lead to increased productivity and revenue.
So, how can you use blockchain to implement sustainable practices in your business? Here are some options:
- Offset your negative environmental impact and/or carbon footprint by purchasing Poseidon, 1PLANET, Toucan, MCO2, or Nori tokens.
- Pledge to invest a percentage of your profit in renewable energy or other green projects through platforms like Green X, Bitgreen, or Regen Network.
- Reduce, reuse, and manage waste sustainably with Eiravato, cirplus, or Empower.
- Increase supply chain transparency, sustainability, and circularity with BanQu.
- Switch to a blockchain renewable energy retailer like WePower.
- Take part in peer-to-peer energy trading through a platform like Verv VLUX.
These options are just the tip of the iceberg. There are hundreds of blockchain solutions that can help you boost your business’s sustainability.
On a final note, know that you might be able to get tax breaks or even funding incentives to implement or adhere to some of these options. Look into that before choosing the best alternative for your business.
Are You Ready to Implement Sustainable Business Practices with Blockchain?
The Web3 and blockchain revolution will be as much — if not more — transformative than the surge of Web2 in the early 2000s.
Becoming an early adopter will give you an almost unprecedented opportunity to get one up on your competitors.
Plus, these days, any business entity needs to show its focus on sustainability in some way.
So, even if you’re not ready to implement blockchain into your business right now, staying on top of trends is crucial.
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