A recent report was published by the Governmental Accountability Office in July 2020 stating that ESG reports are not always clear or resourceful for decision making. The issues with ESG reporting is that the arguments that emissions reporting creates, in an attempt to establish frameworks and guidelines are met with debates and arguments most often than not. Hence Blockchain comes into the equation.
Blockchain is a method by which information is stored and shared between more than one parties. Blockchain can be described as a ledger that lists collections of transactions or information. The ledger is distributed or shared between a network of peers rather than a stored location and monitored by a single authority.
For supply chain traceability, data is an important factor and understanding where that data is being stored and the process is important. There could be some issues regarding the data such as hacks and data breaches, potential abuses and misuse of the data information. To reduce the risk of conflict and human rights abuses, blockchain helps in securing the information and keep them safe.
Another big issue with ESG reporting is that there are no global enforced reporting and compliance standards for it. For financial reporting and fully acknowledging the inconsistencies, there are some GAAP and IFRS standards. With blockchain, transparency and consistency can be increased to enhance the usefulness of the information.
An increase in digitization and the interconnectedness of infrastructure will be an undeniable aspect for the global economy and to ensure that the development of infrastructure create opportunities for the society is very important. To gain benefits from these developments both confidence and insights are need from the technologies. In a statement, The Organisation for Economic Co-operation and Development (OECD) said that blockchain integration with sustainable infrastructure can be beneficial. Blockchain can decentralize the financing of infrastructure, emission certification and make better use of the infrastructure assets.
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