From mine to market: Blockchain helps global companies track and reduce carbon emissions
22 Jan 2021
Corporate leaders from the mining, metals and manufacturing industries are changing their approach to integrating climate considerations into complex supply chains. Follow their discussions at The Davos Agenda today (Tuesday 26 January).
From cars to clothes, furniture to food, concerned customers now insist on understanding the environmental impact of the products they buy. A 2020 study conducted by The Conference Board showed 81% of consumers globally feel strongly that companies should do more to preserve the environment.
But how can corporations within the mining and metals industry rise to the challenge and accurately disclose sustainability within production methods and supply chains?
The Forum’s Mining and Metals Blockchain Initiative, created to accelerate an industry solution for supply chain visibility and environmental, social and corporate governance (ESG) requirements, has released a unique proof of concept to trace emissions across the value chain using distributed ledger technology. The proof of concept, named the COT, a Carbon Tracing Platform, will be critical in helping to ensure traceability of emissions from mine to the final product. With a focus on end-to-end traceability, the COT platform uses distributed ledger technology to track CO2 emissions.
“There is an increasing demand for metals and minerals and an increasing demand for sustainable and responsible and traceable supply chains. There is a potential to create a full value chain view with downstream visibility, and in partnering with regulators and aligning our work with robust ESG standards, sustainability certification schemes and assurance frameworks.”
What’s the challenge?
Extreme weather events, including hurricanes and floods, might be the most illustrative examples of the effects of climate change. But we also know that rainfall patterns and sea levels are changing and that glaciers are in retreat.
The urgent need to address the climate emergency means businesses must work with governments and other stakeholders to accelerate the transition to new approaches that are in line with the 2018 recommendations of the Intergovernmental Panel on Climate Change (IPCC) of a 1.5°C degree scenario.
Climate change is creating risks and opportunities for business. Investors, regulators and other stakeholders are challenging companies across all industries, including the mining and metals sector, to take responsibility by adopting an integrated, strategic approach to addressing the climate emergency.
Rising demand for minerals and materials also brings increasing pressure from stakeholders and shareholders for transparent records of the sustainability and traceability of the raw products.
The founding members of the MMBI – the World Economic Forum, Anglo American, Antofagasta Minerals, Eurasian Resources Group, Glencore, Klöckner & Co, Minsur and Tata Steel – have released a proof of concept that uses distributed ledger technology to track embedded greenhouse gas emissions.
Developed in collaboration with industry experts, and supported by the Dutch blockchain champion Kryha and Consortium Advisor Susan Joseph, it not only tests the technological feasibility of the solution, but also explores the complexities of the supply chain dynamics and sets requirements for future data utilization.
In doing so, the proof of concept responds to demands from stakeholders to create “mine-to-market” visibility and accountability.
By pooling resources and costs, the mining and metals companies aim to accelerate supply chain visibility which also discloses ESG requirements.
“We are seeing collaboration in action by MMBI creating the first proof of concept using blockchain technology to help securely track, record and monitor emissions data throughout value chains. This is a great step for forward-thinking companies to practically address a sustainable future.”
“The MMBI’s custom-built blockchain solution will allow customers to verify the environmental impact of the products they use, and we are excited to have entered the next phase of the platform’s development.”
“As a responsible corporate, Tata Steel welcomes the opportunity to collaborate and create a sustainable future. MMBI’s proof of concept is a first practical step to create a solution facilitated by blockchain technology to reduce emissions and conserve the environment.”
How can you get involved?
The World Economic Forum’s Mining and Metals community is a high-level group of peers dedicated to ensuring the long-term sustainability of their industry and society. Part of the Forum’s Platform for Shaping the Future of Energy and Materials, the industry community comprises chief executives and chairs from partner organizations.