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How blockchain technology is helping build a more sustainable future
Sustainable solutions are needed now more than ever to combat the changing planet and help to meet the 2030 Sustainable Development Goals (SDG’s) adopted by all United Nations Member States in 2015.
Advanced technologies such as Blockchain are expected to play a vital role in addressing the most pressing environmental concerns and help businesses scrutinise and re-evaluate their supply chains, conserve natural resources and reduce their impact on the world.
Blockchain is most commonly known to be the technology facilitating the existence of cryptocurrency such as Bitcoin, but its applications are much more far reaching and could provide a number of opportunities to make luxury industries more sustainable.
Here are some ways blockchain technologies are helping to create a more sustainable future:
Blockchain increases transparency and traceability in supply chains
Today, there are a greater number of environmental and socially aware consumers than ever before who are demanding greater transparency of products and value chains. It is estimated, roughly 60% of consumers are more inclined to buy products that have a clearly defined sustainability policy.
Blockchain is an important tool to help build public confidence as brands’ ecological and ethical claims, operations and impacts can be backed-up and verified. Conversely, it enables consumers to make more informed purchasing choices and offers a degree of accountability which has not existed before.
A platform called Provenance was designed to follow the complete lifecycle of a garment from raw materials to production and even worker welfare. Martina Spetlova, a London-based fashion designer, was the first to employ the database, a choice that has seen her shift to including more eco-friendly materials in her collections.
In the diamond industry, luxury brand De Beers uses blockchain to help trace their supply chains from mine to shop floor. In 2019, De Beers alongside five other diamond manufacturers developed Tracr, an open source blockchain platform aiming to enhance trust for the diamond industry by assuring provenance, traceability and authenticity of natural diamonds.
Blockchain can help fight counterfeiting
Counterfeiting can be linked to many associated problems due to the unregulated nature in which products are made, including environmental damage, worker exploitation, reputational damage and the loss of billions of dollars in authentic brand revenues each year.
Luxury businesses have taken steps in recent years to forego their tradition of opacity in lieu of adopting blockchain technology, a decentralised database visible to brands and consumers alike.
In 2019 LVMH developed AURA, a blockchain-based platform to authenticate luxury goods in partnership with Microsoft and ConsenSys. The idea is that each luxury product during manufacture receives a unique identifier, allowing customers the ability to access the products online certificate after purchase which has been cryptographically signed by the brand and those in its supply chain.
Whether blockchain can halt the counterfeit industry for good remains to be seen, but the decision is a large step in the right direction. In fact, the application of this data system also presents tremendous opportunities for increasing sustainability within the industry, starting with authentication. The ability to authenticate high end goods provides consumers with brand transparency, and the power to make better choices.
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