Blockchain could shake up ESG
Meet Dr Jane Thomason International ESG Campaigner (Chair, Kasei Holdings, London)
Dr Jane Thomason spent a lifetime working across the globe in international health care in emerging economies, and now thinks Blockchain can be the solution to many of the problems she experienced.
From energy consumption, humanitarian disasters, to poor access to quick finance, the “incredibly powerful and transformative” tool cuts out a middle man, making basic things accessible to anyone with a mobile phone.
While the technology is complicated, she breaks it down in the simplest terms possible, saying “it’s a database with no central point of control, so it’s distributed and decentralised”.
“It allows people to exchange information and value”, like money or credits, “on a peer-to-peer basis transparently and immediately and efficiently”, thereby cutting out intermediaries.
This is important, in countries where people might not have immediate access to banking institutions or instant finance.
What is Blockchain, though?
The technology may be complicated, but she says it doesn’t really matter if people understand it or not. “I never start by explaining blockchain, the technology. Where I start is explaining what it can do for you – or what you can do in a given circumstance – with it.”
She compares it to another revolutionary technology: “It’s a bit like trying to explain the internet. I have no clue how that works but I know what I can do with it. “No one’s going to understand the technology, and they don’t need to”.
How it is transforming the world?
Thomason gives examples, including improving “the flows of climate funds”, because blockchain can “transparently and efficiently improve” transfer of cash “right from where they’re being given to the beneficiaries – even to the point of climate impacted communities.”
This can be done “without travelling through beneficiaries like the banks, who take a significant percentage of the climate funds. So it means more funds are available for climate action,” she says.
Another benefit of using blockchain in climate action comes through tokenization of climate offsets or carbon credits, especially in developing countries.
Distributed green energy, such as the Brooklyn Microgrid or Power Ledger, is another area Thomason says blockchain is ripe to disrupt. “People are able to produce renewable energy through a solar panel, even in a remote village, and then redistribute that energy to other people.So I could have a solar panel in Africa for example and I could sell small amounts of solar for someone to charge their mobile phone or for someone to charge a solar light and then they can receive micro-payments”.
Asked whether removing that middle man, might make them more vulnerable, she says “No. And that’s the point about blockchain. It’s completely transparent.”
Banks under threat?
Thomason says of Blockchain in supply chains, “It brings trust and transparency as well as the efficiency and the significant reduction in cost, because all the middleman is doing is taking money, and then passing it on to someone else.”
But has there been any resistance to this trend from banks?
“Absolutely” she says. “You expect that in financial services. A significant majority of banks are spending money on both researching Blockchain and actually having a look at how they can deploy it to make their settlement times quicker and more efficient . “They see what the technology brings. There’s absolutely resistance. But especially in financial sector they’re just going, ‘okay how can we come together with this technology and figure out how to use it to our benefit’.” She argues banks are already getting in on the act, “They already are”, she says. “Some have even “bought fintech companies that enable them to use it. The ones that don’t [adapt] will probably struggle in the future.”
Helping those in crisis
Thomason also reflected on “settings where it’s undeniable that there’s a benefit” of using the technology and “people need help”. “When Afghanistan blew up and everyone was trying to escape, no one could get money. And so the crypto community got together, and then they started being able to send money to people to buy food and blankets [and help] them escape the country.”
Blockchain is not however a technology without its risks and faults. “We have to be careful with technology because it creates new environmental footprint and E waste that needs to be dealt with.
“We can’t pretend that it’s free” and will “just be an environmental success.”
“There is reason to be optimistic about the ability of technology to help achieve the sustainability goals, 70% of which could be accelerated with technology. Now with the advances on Blockchain with NFTs as digital receipts, gamification which can incentivise climate action, tokenization of carbon credits, Web 3.0, the internet of value, and the Metaverse which will be able to transport people into an immersive journey to climate impacted areas, we can see how all these technologies can be deployed to accelerate climate action. We recently launched the World Metaverse Council, which will have a whole vertical devoted to Metaverse and Sustainability, to help educate and inform people on hoe technology is an essential tool for sustainability.”