Words by Robbie Epsom
If a tree falls in a forest and the customer isn’t there to see it, how do we know that it’s the same timber that turns up at a factory or building site far away? Businesses pay a premium for a tonne of wood with an FSC certificate guaranteeing that it has been sourced in a sustainable manner, and consumers are increasingly prepared to pay more for sustainably sourced products. But in reality, they can’t go and watch that tree being cut down or be completely confident that fraud isn’t committed as it moves through the supply chain — that one tonne of genuinely accredited timber doesn’t become two tonnes somewhere along the line.
This is an everyday problem for transparency and sustainability throughout supply chains, and it’s just one example where blockchain technology may be the missing link. The blockchain is essentially the algorithm that underpins cryptocurrencies such as Bitcoin and Ethereum. But its applications are endless. At its core, it is a decentralized network of digital records (or “ledgers”) linked to a particular asset, whether that be a bitcoin, a tonne of timber or a tweet. Every transaction is stored within the blockchain, its accuracy guaranteed by the combined independent verification of the entire network. Information on the history of ownership, financial data and anything else that’s important is assigned to a unique signature (known as a “hash”). If someone alters that information, the unique code no longer works, and everyone knows that something is not right.
At a basic level, imagine you email a contract as a PDF containing your payment details, which the recipient then forwards to someone else. How does that third party know that the version they have is the original document? If it was sent via a blockchain-type platform, even the slightest change, to a single letter or decimal place, would change the digital signature of the document and with it the unique hash generated as part of the blockchain. The person at the end may not know what has changed, but they do know that it has been tampered with.
I believe blockchain will be particularly valuable for helping to meet sustainability goals, which require global cooperation, fast action, transparency, better management of resources, and trust — all things that blockchain can deliver. In the case of our FSC-certified timber, blockchain has the potential to ensure that the tonne of wood that was sourced sustainably is the same tonne that you ultimately purchase further down the value chain. It could underpin a tracking system that verifies a product’s source data as it moves across a supply chain, sending automated alerts about potential tampering or health and safety issues. An electronics company purchasing components from a supplier could verify that the raw materials were sourced in accordance with conflict mineral legislation, and at each step environmental data could be added to provide a transparent, accurate picture of the true impact.