Blockchain-based supply chain sustainability model hailed a success

A blockchain model has been shown to improve supply chain transparency and deliver earlier financing without increasing production costs.

The Trado blockchain model was piloted with tea farmers in Malawi last year. Workers were paid to feed social and ecological data into the system in a ‘data-for-benefits’ swap between buyer and seller, using banks’ supply chain financing.This gave buyers access to information about the production process, improving traceability and rewarding producers who carry out sustainability practices. Data on land management, deforestation, biodiversity and socio-economic development can all be incorporated. 

The University of Cambridge Institute for Sustainability Leadership (CISL) said it had been shown to have a ‘net zero’ impact on production costs and could be replicated in other contexts.

Around 500 million smallholder farmers produce 80% of the food consumed in developing countries, where the cost of borrowing is high, so the model’s incentives could boost sustainability practices.

“This is a significant step towards the further development and understanding of how technology-driven innovation can support the UN’s Sustainable Development Goals,” said CISL senior programme manager Thomas Verhagen.

 

Photo Credit | iStock

 

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