We’ve previously discussed the value blockchain can have in building trust within the Circular Economy, incentivising positive behaviour while proving the origin of new or recycled products and materials immutably. This gives blockchain the potential to be a critical enabler to core aspects of the Circular Economy.
The key word at present is ‘potential’. It’s apparent that there are blockers to mainstream adoption that we need to overcome before introducing it to the Circular Economy ecosystem. While many organisations are starting to explore the value it can have, the regulatory considerations and immaturity of the technology are causing hesitancy.
There’s little doubt that blockchain will achieve mainstream adoption, eventually. And there are things organisations can do between now and then. Adopting a proactive yet considered approach will deliver the benefits of blockchain at the earliest opportunity.
How can the circular economy create value for your business?
The key principles of the Circular Economy are to design out waste and pollution, keep products and materials in use and regenerate natural systems. The strategic priorities of an organisation might place higher value on one of these principles or distribute them evenly across an operational approach. Your organisation’s specific priorities will change the way you want to introduce blockchain.
The integration of blockchain technology isn’t an all or nothing venture. Strategic priorities can govern the level of adoption by targeting where it will bring most value. You could introduce blockchain as an internal tool, maintaining the legitimacy of inventory management systems. Or you could use it as an external tool, incentivising customers to encourage a sustainable model of purchase and recycle. There’s a catalogue of opportunities to choose from.
The Forest Stewardship Council, for example, have started a blockchain pilot that looks to verify FSC materials. Bringing together industry leaders as part of this signals an intent for new ways of working that could lower administrative burdens and increase brand integrity.
It’s important to recognise that while there’s value in bolting a blockchain solution onto existing ways of working, this will create fractions of the value that revisiting the current operating model can have. Having blockchain as part of an organisational strategy can lay the foundation to scale more easily, prepare the workforce for new working styles and make blockchain less alien when mainstream adoption occurs.
While introducing blockchain can feel daunting, it’s possible to do it with minimal risk through proof of concepts. With the strategic thinking underway, an organisation can start pinpointing areas where blockchain could add value. If you prioritise the recycling aspect of the Circular Economy, for example, a proof of concept can show how blockchain would add value by incentivising and streamlining the recycling process. While the cost is minimal, the value could be high, and the potential could be even greater.
For example, launching a media campaign centred around blockchain-incentivised living might appear high risk, but a proof-of-concept delivered to a small sample of the demographic would show how it works with minimal exposure. And while revolutionising the way your organisation operates by bringing blockchain into every management system is costly and hard to create a business case for, bringing blockchain into an inventory management system where provenance and clarity is vital adds undeniable value.
DSM-Niaga, a recycled carpeting company, has partnered with blockchain start-up Provenance to develop a pilot of a blockchain-centric material authentication tool, allowing them to prove claims of sustainability. Launching under the product name “Canary”, DSM-Niaga can view and monitor the impact of the benefits blockchain bring to customers and make further decisions on wider integration as a result.
With a proof of concept in place, an organisation can scale with greater understanding of the technology, how it integrates with current ways of working and how it could integrate with the wider industry.
Considering blockchain as part of the wider organisational strategy and starting with small-scale projects are steps that every organisation can take today. And by following this ‘think big, start small’ approach, organisations will be ready to scale fast to seize big opportunities when then time is right.