Mission
In recent years, businesses and investors have become increasingly aware of climate change and are now taking positive action to stop it. A great example is Microsoft's initiative to become carbon neutral and eventually carbon negative. For these initiatives to succeed, multiple parties including institutional investors, major corporations, supply chain partners, environmentalist groups, government regulators, and the general public must now work together, sometimes for the first time. This new collaboration in turn requires exchanging data and building trust across traditional boundaries.
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Ongoing Work
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- Auditing their greenhouse gas (GHG) emissions.
- Establishing a plan for reducing the company's own emissions over time.
- Purchasing carbon offsets to offset current emissions to achieve carbon neutrality.
- Obtaining a carbon neutrality certification from a certifying entity.
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Why DLT's
Fortunately, DLT's are by design suited for solving precisely these issues. They are "trustless" networks 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 permissioned blockchain such as Hyperledger Fabric 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 compromising any proprietary data. 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.
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. Very few people have had a chance to study and compare the certifications.
But what if we turned the certifications into software code and 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.
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, make a better one yourself: Take an existing certification, add your enhancements, and publish it. If people believe that your certification is better, then they could ask companies to run your code on their climate data channel.
Thus, open source not only helps reduce the cost of certifications but also make it possible for them to become open and transparent, so that investors, consumers, and the general public could finally trust in the climate actions that businesse are taking.
How to Get Started
While carbon audits and certifications are complex, a lot of data could be obtained automatically now. For example, utility bills, corporate travel, server usage, and shipping data could all be obtained by API calls. This means that if you work for a professional services such as software or IT consulting, an automated system using the blockchain could audit your company's emissions and certify your company as carbon neutral.
As an initial proof of concept or Minimum Viable Product (MVP), we could
- Create a Hyperledger permissioned chain
- Set up separate channels for different organizations
- Allow data to be published to the channels and signed. The data would include basic information about the organization and digitally obtained energy usage data, for example from utility bills.
- Deploy chain code to calculate the organizations' GHG emissions
- Publish the GHG emissions as a token or asset.
Meetings
We will be part of the Hyperledger Climate Action and Accounting SIG Meetings – See you there!
Active Members
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