We often hear business leaders called out on transparency of their energy and the emissions byproduct of their electricity. The world of tomorrow is one powered by zero-emission fuels, clean energy sources, and non-emitting processes, but none of this can be achieved, as businesses explain, without proper measurement, reporting, and ultimately action.
Tackling that first step requires its own level of security – and the blockchain conversation has been raised many times in this regard, as an enabler of data storage for transparency.
Without overusing the word too much, the blockchain can provide an unchangeable record of data that will inform the generations for business in such credible ways as books are published to record key events in history. In fact, we dare say that blockchain could be used as the modern-day library for information, a place where data resides and, unlike a book, cannot be removed from the shelf.
In this we see potential for a much truer emissions reduction effort as organisations can leverage the abundance of credible insight to be stored on the decentralised digital ledger.
The use of blockchain for energy transparency
So, how exactly is blockchain used to democratise data in the renewable energy sector? Clare Adelgren, Global Head of Blockchain Operations at EY, brings us up to speed with its applications.
“While blockchain technology has come a long way in the last few years, we need to remember that we are just at the very beginning of this exciting journey – for the energy sector this is especially true,” says Adelgren.
“There are some interesting parallels with the renewable energy sector, which has been steadily growing for the last 20+ years, but there is still a tremendous amount to do before we can reach the aspirations of the 2050 Paris Agreement. The International Energy Agency (IEA) estimates that to remain on target, the rate of growth needs to double, an acceleration that would mean two thirds of the electricity generated in 2030 would be from renewable energy sources.”
While the blockchain isn’t necessarily the silver bullet of energy decarbonisation, the criticality of reputable data in the process puts the ledger in a desirable position. Perhaps this will become the world’s new database – an encyclopaedia of corporate and governmental progress.
“Enterprises are feeling an increased pressure from government directives and consumers alike,” Aldegren explains. “Pledging net-zero goals is simply not good enough today, enterprises need to convincingly demonstrate how they will meet their goals and report their progress. Blockchain serves as an easy-to-use digital database system to do just that.”
Adelgren elaborates on this: “For most enterprises, though, net zero goals will require the ability to both reduce their emissions and establish authentic sources of carbon credits to offset the remaining balance. Ultimately, success will require that they establish trust with all their ecosystem stakeholders – with both transparency and independent verification playing an important role.”
This is where Adelgren positions the blockchain in the future, not only a trusted source, but a secure one at that. Data will be untarnished, kept in its most reputable form.
“A public blockchain is distinct in the benefits that it delivers. Its inherent immutability is key and establishes the essential foundation of trust. When data is shared on a public distributed ledger, an organisation is also able to create much needed transparency.”
Ensuring transparency means keeping data safe
The very nature of the blockchain as a decentralised system is said to be the reason for its immense security and credibility. Matching current transactions with previous data, not only does the blockchain store information, but it leads you to its origins.
“When a new transaction is made, it is matched with the endpoint of the previous transaction, creating a string of events with each one validated through consensus,” says Aldegren. “This continuous chain is why a blockchain is often considered to be highly secure from the risk of tampering. This argument is only valid in the context of a public blockchain.”
OpsChain ESG by EY
OpsChain ESG by EY is a cutting-edge blockchain platform designed to enhance ESG reporting and transparency. It empowers organisations to securely track and share ESG data, fostering sustainability and responsible business practices.
“Our EY OpsChain ESG solution is focused specifically on enabling emissions and carbon credit transparency,” Aldegran explains.
With its innovative features, OpsChain ESG helps companies navigate the evolving landscape of ESG compliance and impact measurement.
“Built to the data standards of the InterWork Alliance for Carbon Emissions tracking, EY OpsChain ESG allows companies to track and report their scope 1, 2 or 3 emissions data at a product level. Similarly, an organisation can also tokenize their carbon offsets data, providing further transparency.”
And with a flurry of new businesses entering the sector, blockchain provides an opportunity to start on the right foot. Established organisations looking to paint a truly credible picture of their emissions contributions will be presented with much more complexity than the newbies recording their data in a public digital space from the get-go.
“For the renewable energy sector with such diverse players, many of whom are new companies with new business models, blockchain technology can allow organisations to track data from disparate sources, validating its origin and providing us with the peace of mind where we know that it cannot be altered,” Adelgren adds.
In terms of physical security, the blockchain has been praised by many for its reputable, resilient characteristics. Adelgren explains there are “several ways that blockchain technology can help enterprises to implement on their net zero goals and make tangible progress.”
She continues: “Immutable reporting on an enterprise’s current emissions levels that are independently verifiable through the integration of key emissions validators allows organisations to track their emissions through the supply-chain and make informed decisions that will accelerate their plans to net zero.”
While traceability is the key to corporate sustainability, blockchain can build the data trail that leads businesses back to their roots.
******
Make sure you check out the latest edition of Sustainability Magazine and also sign up to our global conference series – Sustainability LIVE 2024
******
Sustainability Magazine is a BizClik brand