Social Impact in ESG framework and Blockchain tech
In business processes, sustainability has received global attention. Environmental, social, and governance (ESG) reporting is widely used to assess the level of sustainability, particularly for publicly traded companies. However, the ESG-based sustainability evaluation is still insufficient due to a lack of data authentication, consistency, and transparency.
Different people define social impact differently, but it generally refers to how actions and activities affect individuals, families, and communities. Often, social impact is defined as meeting a social challenge or having a positive effect on people.
Blockchain can not only track but also shape social impact. There is much discussion about public and private bodies announcing their intentions, but it is difficult to prove whether or not this occurs.
Different people define social impact differently, but it generally refers to how actions and activities affect individuals, families, and communities. Often, social impact is defined as meeting a social challenge or having a positive effect on people.
Blockchain can not only track but also shape social impact. There is much discussion about public and private bodies announcing their intentions, but it is difficult to prove whether or not this occurs.
The use of blockchain technology has far-reaching implications for social impact, including
- Transparency
- Management of the supply chain
- Digital identification
- Personal data security
- Legitimacy
- Trust in Compliance
Big tech firms keep their algorithms hidden, whereas blockchain’s selling point is transparency and irrefutable record keeping. Because of blockchain’s alternative trust-based, peer-to-peer systems, some technologists believe blockchain and cryptocurrencies can realign capitalism.
Consider how blockchain is already reducing costs, realigning the concept of borders, and disrupting the world as we know it.
How blockchain is creating Social Impact: Use Cases
Big food industry players have adopted blockchain tech to build a transparent supply chain for their produce. This activity helps them in building their brand trust. Their customers can check whether the packing and labeling are trustworthy. They can check every step in the supply chain, like the names of pesticides used, whether the food product is locally grown or the region in which it is grown, etc. Farmers and traders can get real-time information on payments and delivery. Shopkeepers can also check product claims of sustainability and product origin.
Charity and NGO sectors can adopt Blockchain tech and save on bank fees. They can easily unlock the financial aid distribution to people in disaster areas. Blockchain can develop a cost-efficient finance system that can benefit shopkeepers, aid recipients, and ecosystem participants.
Government can create a trackable and transparent blockchain ecosystem for a wide range of financial transactions, including tax payments.
In the healthcare industry, blockchain-based systems can maintain healthcare records. The patients can store their medical data in the system, which can be accessible to medical practitioners in an emergency.
With the help of decentralized finance (defi), the global unbanked population could be given financial aid in the banking sector. As per estimates, more than 1 billion people worldwide do not have banking facilities due to a centralized financial system. Using the defi system and cryptocurrencies as a medium of exchange, an unbanked population can connect with society.
The energy sector can utilize a blockchain platform with greater data control and micro-optimizations of energy. It is possible to foster the creation of microgrids in deregulated markets and facilitate peer-to-peer energy and payment transactions while improving the efficiency of existing grids.
Blockchain has helped SMEs (small and medium enterprises) to grow their business beyond the local limits due to a decentralized system. This facility is boosting the finance sector.
According to the preceding discussion, blockchain closely relates to social impact projects, solving the world’s most pressing issues. From fraud and risk reduction to lower administrative costs and faster border settlements, blockchain can be viewed as a one-stop solution for every domain.
