How Blockchain Can Power the Circular Economy

The convergence of consumer and industry concerns about the sustainability in the manufacturing and re-use of materials is spurring industries such as textiles, jewelry, and automotive to trace every step in the supply chain.

With consumers increasingly asking for products that are produced ethically and sustainably, it’s a unique opportunity for blockchain firms to respond to this market dynamic.

How blockchain underpins transparency and traceability

There are already many technologies that are well-advanced and available in the market today—and have been available since the mid-90s—that play a role, for example, the ability to put a nano-tracer inside textiles. However, with IoT and AI, blockchain can drive more powerful applications to develop sustainable practices in the industry.

Blockchain is powering battery industry sustainability practices

One example is the battery industry, where Everledger is one of 42 global organizations that have agreed on guiding principles to ensure sustainable practices. These companies make up what is known as the Global Battery Alliance. Ensuring the sustainability of batteries is key since they are used in the transportation and power industries and makeup 40% of global carbon emissions annually.

This is all part of a transformation to sourcing materials and leaping into the circular economy—an ecosystem that reduces waste and promotes re-use and recycling.

While in the past industries have naturally relied upon natural resources, which are all finite, they now focusing on how to re-use and repurpose parts. Lithium and cobalt in batteries are a prime example. 

What does the future hold for supply chains?

A combination of technologies will be adopted at scale across supply chains that will enable transparency and sustainability.

Brands and consumers together will cause a shift in what’s traced, what materials are used, and what’s reported. This will create an entirely new industry based on re-commerce (re-using and re-purposing materials). Government policy will also play an important role. 

Blockchain will be one of the key technologies behind the change, powering a new way of thinking about sustainability—and what really matters—in the not-so-distant circular economy of tomorrow.

We hope you have found this article informative and interesting. For more information or queries contact us to know more about this technology.