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Agenda:

  • Antitrust Policy Notice
  • Welcome new members, including new member introductions

  • Real Product Carbon Footprint to Achieve Decarbonization by Gunther Walden, CEO of CircularTree

    • Many companies have set themselves targets by when they want to be carbon neutral. However, this does not mean that their products are carbon neutral. A study by the Carbon Disclosure Project has revealed that on average, 80% of the product carbon footprint comes through the supply chain.

    • The solution of CircularTree helps companies to measure their real carbon footprint. With blockchain technology, the biggest challenges can be overcome and ambiguity between trade partners is removed. Companies can get accurate, granular, and verified primary emissions data of their purchased materials and products. This transparency enables companies to provide real product carbon footprint information to their customers.

    • Gunther will explain how their solution is designed, provide some insights in their award winning pilot project with Porsche, BASF and Motherson and our strategy to achieve mass adoption of our approach.

  • Updates / needs from CA2SIG Working Groups
  • COP26 - Does anyone from the SIG plan to attend?


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Meeting Notes 

  • Attendees: 30 + YouTube stream
  • 30 min presentation, 30 min very interesting Q&A
  • COP26 and updates from the CA2SIG working groups were postponed to the next meeting on July 27


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13 Comments

  1. Vipin Bharathan

    Watched the recording. Good presentation articulated clearly. Limited in scope with enough forward thinking... 

    Scope 1, Scope 2 emissions mainly

    Scope 3 - Can be scope 1 and Scope 2 from upstream producers. So scope 3 is already partially available.

    There is a concept of continuous (or ubiquituous) audit, this automates quite a bit of the audit using incontrovertible proof from IoTs and smart contracts as well as chasing down outliers (i.e. if a known process has a particular CF, if anyone is reporting significantly higher or lower values this may need looking into) - also instead of data sharing or transparency, calculations can use Homomorphic encryption for aggregate values or ZKPs to say that the PCF is less than a particular value.

    Great presentation


    1. Robin Klemens

      Vipin Bharathan, thanks for your feedback. Could you provide some resources that explain the concept of continuous audit in more detail? I think this could also be very interesting for our auditing part of the blockchain-carbon-accounting lab. 

      Si Chen Kamlesh Nagware

      1. Si Chen

        Robin KlemensThis was a very good meeting, and thank you for organizing it and hosting it.  I thought the group's questions were especially on point and helped me see what is required for supply chain carbon accounting. 

        They make a good point that companies are very protective of their data.  While there are technologies for data privacy, what is really necessary is a strong business case for doing this:

        1. Is recording emissions on the blockchain really giving different results than LCA models?
        2. Are there many participants in an ecosystem so that sharing data on the blockchain is better than API integration with a dominant company?
        3. Is there financial incentive for sharing the data?  If there were lenders funding emissions reductions or equity investors looking for emissions data, then companies would be more interested in sharing their data.  At the same time, those lenders and investors would have an incentive to watch over the auditors.

        1. Gunther Walden

          Si ChenThanks for your feedback and your questions!

          1. With LCA models you don't have the possibility to track emissions through several steps of the supply chain, this is why average database values for Scope 3 emissions are being used. The real advantage of CarbonBlock is that we submit the real PCF at every step of the supply chain as input for the next supply chain actors. So our PCF data can in fact be used as input in LCA's.
          2. All existing companies are part of many different supply chains. The big advantage of the CarbonBlock approach is the standardized and automated manner in which PCF's are calculated and communicated. This means every company only needs to have to go through the calculation  exercise once and can use the results and the data sharing mechanism for all their customers and don't need to serve many different API's.
          3. At this point there is no direct financial incentive from CarbonBlock for data sharing foreseen. However, there are numerous value opportunities, e. g. competitive advantage, improved reporting, etc. for companies participating in the CarbonBlock solution. We believe providing PCF information will become as normal as e. g. providing technical documentation for your product. However, we definitely see financial incentives for reduction of carbon emissions.

          1. Si Chen

            Gunther WaldenThank you for reading through my comments.

            Have you or your clients evaluated the product carbon footprints calculated through CarbonBlock tracking versus those that could be calculated from LCA or a model?


            1. Gunther Walden

              Si ChenIn our pilot projects we havn't had a product where we had an LCA value to compare with. What we know is that companies who have done LCA's for a specific product and compared this with in industry database there is indeed a difference. So the conclusion is that if companies use real data provided by their suppliers rather than database values, there will be a difference, too.

              1. Si Chen

                Thank you for your response and thank you again for your presentation.

  2. Vipin Bharathan

    http://raw.rutgers.edu/ can be your resource for the CA movement (has been around for a while)- maybe we need to fuse with Blockchain Smart Contracts for efficacy, but since the PCF calculations in the Carbon block are offchain, maybe there is even greater chance of integration... We can delve into this. XBRL and other technologies also need to be joined into this. Robin Klemens

    1. Robin Klemens

      Vipin Bharathan, thanks for providing the resource for the CA movement! XBRL is a great hint. I'd like to investigate how standardized carbon disclosures reported in XBRL could be integrated into CSR reports of companies that follow the GRI reporting standard.
      Have you already done some research in the Capital Market SIG on the opportunities of XBRL compliant smart contracts?

      1. Vipin Bharathan

        I do see use for ubiquitous monitoring and or auditing in many fields. We have not done research on XBRL compliant smart contracts in the Capital Markets SIG. However we see this as a powerful pattern where the normal operation of the platform (i.e. transactions) throws out trusted monitoring data or even refuses a transaction because of regulatory constraints. The challenge is to do this without sharing overmuch and having smart contracts without destructive bugs or unintended consequences. 

    2. Gunther Walden

      Vipin BharathanThanks for the info. We'll have a look and check if there is an opportunity for integration

  3. Erich Schnoeckel

    Gunther Walden Very interesting presentation, a pity I was not able to join last week.
    The calculation of the PCF´s seems to me an effort that can easily be done by the larger companies, but becomes to burdensome for the smaller. What is your opinion on that?
    Most companies never have given a PCF any thoughts at all. They may be surprised by an outcome and may want to manipulate it to a favourable outcome. (if that exists at all). Auditing on a PCF is not yet a common job, so there is much to learn. How do you see that developing?

    Further you want to automate the input as much as possible. Considering the many ERP solutions that can be a hell of a job. Again, what's your view on that?
    Do you think the EU Taxonomy may bring a solution for some of the challenges described?

    1. Gunther Walden

      Erich Schnoeckelthanks for your feedback and your great questions!

      I fully agree that it may be more challenging for smaller companies because they don't have the dedicated experts to do the setup. However, especially in the discrete industries it isn't all that difficult. Auditing indeed will be quite a challenge for smaller companies. In my opinion for smaller companies we need to come to a rating system which allows e. g. for random audits which honors honest behavior and punishes dishonesty.

      Connection to different ERP's will require some work, however it's quite common for many solutions to exchange data so we don't believe it will be a significant challenge.

      I am not sure whether the EU Taxonomy provides a solution to the challenges, although the additional focus on climate and energy will definitely be positive.