COP26 is coming, with world leaders convening in Scotland to discuss the threat of the worsening climate crisis. The UN Climate Change conference is likely to bring more power to the net-zero movement, aiming for the global economy to reach net-zero greenhouse gas emissions by 2050. But what changes can sustainable technology bring to this mission?
While regulations can work, a recent GlobalData report on climate change argues that non-governmental organisations and the private sector are stepping in where Big Government is currently failing, launching decarbonisation initiatives that are “driving down GHG emissions in virtually every industry and region of the globe.”
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Hundreds of companies have already made commitments to reach net-zero by 2050, while more than a hundred have gone even further by committing to a 2040 target.
GlobalData also notes sustainable technology can play a role in effective corporate governance.
“Modern business would not survive without software … that provides visibility and control over corporate operations,” researchers state in a report on ESG governance factors. “Governance is no different. Governance software can facilitate [ESG goals].”
Verdict therefore has reached out to the technology community to find ways in which tech like blockchain, machine learning and augmented reality (AR) can help the world turn greener by 2050 or earlier. It may not be sustainable technology that is on the COP26 agenda yet, but even so it may bring about disruption in the shorter term rather than longer.
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By GlobalDataBlockchain in your beans
The technology of blockchains commonly involves the use of public key encryption and hashing, cryptographic tools which prevent third parties from viewing or tampering with private data.
Blockchain implementations such as bitcoin use a digital ledger of transactions that is decentralised. This means that no central authority or intermediary, like a government or bank, is required to validate a transaction.
One company exploring blockchain in the sustainable technology space is London creative tech studio Rehab. As its product strategist Takunda Chikuku tells Verdict, with consumers starting to care more and more about sustainable development and demanding transparency and accountability in the production of their goods, blockchain technology will “step in and really make a difference.”
“Imagine a farmer making a living producing cocoa beans, they are the first link in the global supply chain that ends in large corporations and affluent consumers but they are rarely compensated according to the value produced,” explains Chikuku.
“Usually, the end consumer has no idea where their purchased goods came from and how they were sourced beyond the Fairtrade sign, and country of origin companies are not incentivized to showcase the value produced at the beginning of the supply chain.
“The farmer must accept the first price offered by local wholesalers. With more transparency across the entire supply chain, farmers could receive fairer prices that can sustain the livelihoods of their families, creating social mobility.”
In Rehab’s vision, when a farmer goes to sell their harvest, the location, quantity and price paid can all be added into the database. This allows what Chikuku calls “an incorruptible view” into the supply chain with consumers able to see the origin and value exchange at each stage. This data can be then used to compel retailers, processors and wholesalers to compensate farmers fairly.
“Furthermore, they can specifically demand and track the environmental impact of their food supply at each stage by inputting this data on the blockchain. This level of transparency can be used to effect real change and accountability to every stakeholder in the supply chain.”
While startups like Bext360 and SkuChain are already building the technology to make this blockchain use a reality, some bigger names are already playing in this field.
“IBM is working on a similar effort,” Chikuku explains. “Founding the IBM Food Trust they entered into a partnership with Walmart to use blockchain for tracing fresh produce and other food products.
“Speaking of Walmart, they conducted a field experiment to locate the source of its mangoes. It took them a week without blockchain but with it, they found the farm in Mexico in several seconds.”
Where the customer comes in is at the end of the chain, with a surprising use of another budding technology theme: AR.
“AR unlocks a richer picture into the production of consumer packaged goods with users being able to see that data visualised beyond numbers, right down to multimedia of the exact farming region producing this batch of cocoa beans.
“This could be implemented through the retailer’s shopping app, or at a brand or industry body level with QR codes leading to progressive web app experiences.
“On a retailer or industry standard level using computer vision we could enable the shopper to scan the entire aisle using their phone’s camera and see which is the most sustainable, giving them another dimension to make purchase decisions beyond price or brand.”
Chikuku believes some “data design magic” from Rehab can put into tangible context the impact and value produced by the item customers are considering purchasing which can “drive powerful shifts in consumer choices”.
“We all know how many zeroes are in a million pounds but seeing it visually stacked quickly unlocks a whole new understanding and juxtaposing the value received and environmental impact of each stakeholder, consumers can make informed purchasing decisions on the spot not influenced by advertising but cold hard data.”
Sustainable technology such as this could make a real difference. But Chikuku is unsure how much of a talking point blockchain will be at COP26.
“Although one of the COP26 sustainability governing principles is to promote responsible use of resources throughout the supply chain, I’m not sure enough knowledge about blockchain solutions is evidenced in COP26 for them to be a talking point on the agenda.
“Perhaps blockchain solutions might get a chance to shine in the ‘Science & Innovation’ section of the programme, where the aim is to demonstrate that science and innovation can deliver climate solutions to meet, and accelerate, increased ambition.
“Regardless, with the blockchain moving to ‘proof of stake’, so drastically reducing its voracity for energy, the possibilities viable blockchain solutions unlock are undeniable and should be firmly on the radar of COP26 attendees.”
Sustainable technology in 2150
If blockchain startups are to thrive they will require capital injection. Enter the London, Copenhagen and Berlin based venture capital firm 2150, seeking to invest in sustainable technology companies which can decarbonise our cities and towns.
According to founder Christian Hernandez Gallardo, 2150 looks to back technologies that solve the big problems of the urban environment, from the materials we use to how we heat and cool our buildings, to how we stay healthy and secure.
“Specifically, we want to identify sectors and technologies that can not only be commercially lucrative, but also have a measurable sustainable impact. Having launched our fund formally earlier this year, we are looking to back ‘Gigacorns’, namely companies whose technologies can impact global CO2 emissions by 1 gigaton of CO2 per year while being commercially viable.
“One of the biggest problems in the urban environment is our global addiction to cement and concrete which generate 8% of global CO2 emissions. Our analysis of the problem and technologies that could mitigate this led to our investment into CarbonCure Technologies in 2020. As part of our investment we are actively supporting CarbonCure to expand into the UK, to help reduce the CO2 footprint of many large infrastructure and construction projects across the country.”
Being based in both the EU and UK, 2150 is in a good position to compare how each is working to encourage sustainable technology. Gallardo points to the EU’s Sustainable Development Goals framework as a “powerful way” that the EU helps to drive sustainable technology activity in the EU. But that doesn’t mean the UK doesn’t have a strong showing in 2150’s portfolio.
“With half of our team based in the UK, we have connected with many great startups coming out of London and beyond. Our investment this year into London-based Nodes and Links, a company which applies machine learning to complex infrastructure projects, is a strong bellwether for our faith in the UK market for sustainable technologies.
“As part of our efforts to engage with the wider sustainability tech landscape in the UK we have also become a member of COP26’s Tech for Our Planet scheme, a collaborative initiative instigated by the Cabinet Office to explore and showcase how digital and data solutions can make a major and essential contribution to the global climate effort.
“There’s no doubt that we foresee a bright future for the UK when it comes to establishing and growing the future of sustainable technologies,” believes Gallardo.
Automation in green bonds
As consumer appetite for sustainable financing grows, so does corporate appetite. The green bond market is set to be worth more than $2 trillion by 2023, earmarking bonds specifically for projects related to clean water, clean air, renewable energy and other environmental objectives.
But the complexity that financial institutions face when embracing green bonds is often underestimated by business leaders. From a tech perspective alone, going green can require customised loan calculations, multiple funding sources, automating complex lending processes and extensive management throughout the life of the loan.
To tackle this problem, Dutch fintech Ohpen is working to enable an ecosystem of tech partners with the expertise needed to help brands navigate the green landscape.
Ohpen was recently chosen as the banking technology partner for the Netherlands’ Nationaal Warmtefonds, a government agency providing financing so that households and institutions can transition their energy sources.
The partnership will see Ohpen facilitate all sustainable products for the next 10 years and is a European first in terms of allowing consumers to simultaneously generate an estimate, apply and activate a loan 100% online with speed.
Speaking to Jan Lamber Voortman, managing director of lending at Ohpen, and Harry de Roo, board member at Nationaal Warmtefonds, Verdict learned how automation is being used to detangle complexities.
“Once a loan request is created, the origination process starts in the background to automatically enrich the dossier with relevant data from multiple trusted sources as input for the automated assessment,” they explain.
“(An) automated conditional approval will result in a loan proposal, including a list of proofing documents that applicants have to share to prove their stated information.
“From there it is up to the customers to start collecting and uploading their proofing documents… Once these proofing documents are uploaded the system will automatically start processing the final assessment based on the input from the trusted sources in combination with the data from the proofing documents.”
Compared to regular loans and mortgages, the products from Nationaal Warmtefonds in question have specific features to accommodate sustainable living, including a sustainability depot for disbursements to the constructors who implement the sustainability facilities.
Also included is a ‘Distribution Agreement Service’ which enables the energy agency to accommodate special rates and discounts on interest for specific partners and funders like municipalities and districts.
Vortman and de Roo think the automated push in making houses more sustainable could go down well at COP26, whilst believing their current work is just the tip of the iceberg.
“In the current situation the initiative to make existing houses more sustainable, especially older houses, is left to the owner and this sponsored sustainable loan is the only stimulus to consider such investments.
“There is a wide range of possible activities to make houses more sustainable and there are many different contractors (of different quality) to perform these activities, with varying results. Quality assurance and standardisation could be improved and enforced as part of the origination process of such a loan.
“The current ‘make your own house sustainable’ activities, with and without sponsored sustainability loans, are just a drop on a hot plate. To meet the global climate goals, activities must increase and accelerate.”
The same can be said about all initiatives aiming to help the world meet net-zero, but perhaps sustainable technologies might make COP26’s grand plans a reality.
By Verdict’s Giacomo Lee. Find the GlobalData Climate Change – Thematic Research report here.
