Blockchain promises to boost sustainability in mining & metals
Increasing transparency demands from regulators and consumers are steering mining & metals companies to blockchain for an answer
Facing a rising tide of regulatory requirements, benchmarking pressures, and climate- and human rights-related litigation, mining & metals companies are beginning to see the profit and brand potential in emphasizing the environmental and social attributes of their goods and services.
Because of its ability to improve transparency, traceability, accountability, integrity and efficiency through open, incorruptible data sharing, blockchain is being discussed as the cornerstone technology for delivering the transparency that regulators, business partners and consumers are demanding.
The potential benefits of blockchain solutions in mining & metals are many and varied: data consistency, documentation and traceability from provenance to producer, manufacturer, logistics and packaging providers; automated due diligence and reporting exported from the mine site; the monitoring of evolving customer and legal requirements; and environmental impact reports, recorded on the blockchain, enabling sustainable behavior to win rewards through incentives, such as tax rebates.
By 2020, countries implementing the Extractive Industries Transparency Initiative (EITI) standard must ensure that all mining and oil & gas companies publish the names of the "real owners," including owners' identities and those of any politically exposed persons. Blockchain technology could provide a holistic platform to address ownership transparency on a transaction-by-transaction basis.
The European Partnership for Responsible Minerals, a public-private partnership comprising governments and large industry players, is currently funding SustainBlock, a plan to use blockchain technology for minerals and metals traceability from conflict-affected and high-risk areas.
We are approaching an era when blockchain technology can enable end-users to have a true 360-degree view of mining & metals products throughout their life cycle, a view that demonstrates not only that products are conflict-free, but also that a company is faithful to the attendant health, safety and social issues associated with their operations.
There remains a stumbling block: Research in the food, fashion and other sectors piloting blockchain shows companies capturing a premium on sustainably branded products, helping to offset blockchain and sustainability costs. In some parts of the mining & metals sector, producers are skeptical as to whether sustainability attributes will generate a premium on their products.
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