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• Businesses and organizations take action on climate change by making the process simpler and less costly.
• Certifying entities streamline do more by streamlining the process for high quality analysis and verificationverifying corporate climate action.  
• General public and consumers by providing trust corporate climate action with open and transparent view of corporate climate actionanalysis.
• Investment community trust corporate sustainability claims with high quality tools to verify corporate sustainability claims.

We will work closely with the Standards - WG as part of understanding the standards and implementing the technologies for climate accounting. 

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• Identifying standards for corporate climate accounting and certifications
• Provide recommendations on how DLT's could complement or improve current industry processes 
• Implementing open source DLT software for climate accounting and certifications
• Promoting awareness and positive action in the larger Hyperledger and DLT community
• Educating other stakeholders on the value of DLT's and Hyperledger in climate change.

Ongoing Work

Many companies today are starting to account for and limit their climate impact, going as far as trying to achieve carbon or climate neutrality. These corporate These initiatives often involve several steps, including:

1. Audit of Auditing their greenhouse gas (GHG) emissions following the established Greenhouse Gas Protocol
2. Establishing a A plan for reducing the company's own emissions over time
3. Purchasing carbon offsets to offset current emissions to achieve carbon neutrality.  The offsets are often themselves certified by standards bodies such as the Gold Standard or Verified Carbon Standard.  
4. Obtaining a carbon neutrality certification from a certifying entity.  There are many different certifications today, including BSI PAS-2060, Carbon Neutral by Natural Capital Partners, Climate Neutral, Zerofootprint to name a few.

Related to this is the Environmental Product Declaration (EPD), which is a document which describes the environmental impact of a product, including its carbon emissions footprint.  For examples, click here and here.  The EPD is the result of a Lifecycle Analysis (LCA) based on standard Product Category Rules (PCR.)  See this brief explanation of the relationship of LCA, PCR, and EPD.

Yet these steps are difficult for the companies themselves and met with skepticism from the general public.  Fundamentally, companies are running into challenges of While these initiatives represent a significant step forward on climate change, there are many challenges for companies which embark on such paths.  Most of these challenges center around the issues of data and trust.  Fortunately, distributed ledger technology or blockchainDLT's, especially an open source platform like Hyperledger, are naturally designed to solve the these problems of data and trust. 

The Challenge of Data

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A company looking to become Carbon Neutral must first perform an audit to determine its emissionsGHG emissions audit requires data from a lot of different sources, many outside of the company.  The Greenhouse Gas Protocol specifies three levels of emissions: Scope 1, 2, and 3 emissions from , covering direct energy use (fuel burned on site), indirect energy use (energy purchased from utilities), and all other significant activities of the business, including raw materials purchased, transportation of goods, travel and commuting of employees, and leased assets such as office space.  .

The problem is that while most companies' emissions come from Scope 3 activities, data for such activities are also the hardest to come by.  It would Such an audit would require getting data from every part of the business, from purchasing to manufacturing to facilities management to human resources.  This often involves manually gathering data and entering them into spreadsheets.  The data is then used to calculate emissions as part of lifecycle analysis, with software such as OpenLCA.  More importantly, it also involves data from a company's supply chain partners, such as the manufacturers of its products or components.  Those manufacturers, in turn, may not have this data or may not wish to publish it for competitive reasons.

The In reality, much of this data may either be difficult to get or simply not available.  Sometimes data is simply not available, and generic model values from either free LCA repositories or proprietary ones have to be used.  At other times, the high cost or complexity of obtaining the data would require a judgement call about whether the activity is "significant" to the company's overall emissions or not, or whether generic or model data would be sufficient.  

The Questions of Trust

Knowing this, it's not hard to see why the general public could be skeptical of a company's climate action claims.  After all,

• Can we trust the data that the company has provided? 
• Can we trust judgement calls, made by either the company or a certifying entity, about which activities are relevant and which activities do not require data and auditing?
• How do we know if the company is in fact working on its emissions reduction plan?
• Can consumers and investors trust that the certifying entity is objective?

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Why DLT's

DLT's are designed to address precisely this issue because they are "trustless" and do not require trust in a single organization, whether it's the company making a climate action claim or an entity certifying it.  Instead, the architecture of DLT's allows multiple parties to come together and verify all claims independently with code.

In this case, a

On the flipside, how much data can the company share before it's giving away proprietary competitive information?

Trust in the Blockchain

A permissioned blockchain such as Hyperledger Fabric could be used to address issues like this:allows a company to share its data for independent verification by trusted parties.  Thus, it could provide transparency and protect privacy at the same time.  For example,

• A private channel could be set up for a company, its trusted data sources, and certifying entities. 
• The data sources could include utilities, suppliers, shippers, and other sources that could supply data automatically about a company's activities.   When the data is pulled from their data sources, they would be digitally signed to certify their sources.  A hash of the data could also be stored for later verifying that the data has not been altered.
• One or more certifying entities could have access to the data and use smart contracts to calculate the company's emissions based on the data on the private channel.
• The result could then be signed and published to a more public blockchain, for example as a token.

Hyperledger Fabric channels and chain code allow additional parties to audit a company's emissions without revealing any proprietary data to the company.  For example, if an environmentalist group has questions about a company's reported emissions, it could develop its own smart contract for auditing emissions.  It could then ask that they be deployed, possibly by a neutral third party service provider, to the company's private channel.  The smart contract could audit the data and report its results without sharing the company's data with the environmentalist group.

Once the climate action claim has been verified, it could be tokenized on a public blockchain or passed along in another permissioned chain as an asset.  This allows the climate action claim, whether it's the GHG emissions of a product or a company's certified carbon neutrality, to be passed down the supply chain to its customers and made visible to the general public.

Why Open Source

Today, there are a lot of different environmental certifications, and the general public often doesn't know which one they could trust.  Thus, some consumers feel that any business which makes a pro-environment claim is "greenwashing," while many businesses feel that no matter what they do, it's not good enough.

This is a problem of transparency, not of data but of methodologies.  Today's certifications are either opaque, proprietary, or at least highly complex.  The solution is to turn Very few people have had a chance to study and compare the certifications. 

But what if we turned the certifications into software code and make made them open source, so anybody could study a certification and understand how it works?  We could run several certifications on the same company, or even conduct studies comparing the certifications on a range of companies.

what it does.  Furthermore, if the code for the certifications are open source, then anybody could extend an existing certification.  So if you feel that a certification process is too lax, you can modify it and create : Create your own certification, write it as smart code, and share it with the world.  If enough people believe that your certification process is better, then you could get companies to adopt it. 

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As open source developers, this is an easy and direct way for us to do something about climate change.

Meetings

We will be part of the Hyperledger Climate Action and Accounting SIG Meetings – See you there!

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