When we act as a global community to govern and resolve, we rely on openness, transparency, trust and authenticity in tandem with other stakeholders. Technology solutions, like blockchain technology, facilitate openness, transparency and authenticity.
The world came to Davos for its 50th Annual Meeting since the World Economic Forum (WEF) has championed the Fourth Industrial revolution by recognizing the interdependence of networks and value chains with technology capabilities for solutions to global consumers’ most pressing challenges.
Inclusivity and leveraging blockchain for CSR
Considering the next set of challenges, the WEF selected three key themes that are also informed by the fifty global civil society organizations and nongovernmental organizations:
Each theme relies upon openness, transparency, trust and authenticity to speed up information exchange, and ultimately, the speed of transformation. However, inclusion underpins the likelihood of success to actualize these goals and also remains an area of improvement for those critical of the Davos Summit for its elite beginnings.
As the summit events transpired, there was one role that leaders seemed to be building towards for next year’s summit: corporate social responsibility leaders. The role of corporate social responsibility (CSR) is increasing as consumers, shareholders and employees are asking corporations for more transparency. The financial, manufacturing, energy, consumer product and retail sectors are working to provide more insights to stakeholders for both altruistic and pragmatic reasons.
Efforts so far are aligning well to consumers. IBM and NRF have published findings that 70 percent of consumers would pay 35 percent more for eco-friendly brands. Thomas M. Kostigen, Director of Sustainability at JConnelly, found that investors have been moving money into the companies perceived as socially responsible. “There is now more than $12 trillion invested in a variety of socially responsible ways. That’s one out of four of the total assets under management in the U.S. alone.” Brand identity with social good will continue to help generate higher returns and those late to adopt this cultural shift will forfeit market share and profits.
Looking back at one of the biggest corporate social responsibility controversies in the twentieth century, conflict “blood” diamonds, highlighted the role corporations play in checking dangerous supplier value chain conditions. A series of binding agreements among industry leaders promoted tracing the source of the product and challenged unethical means of procuring diamonds from war-torn Sierra Leone. As a result, the Kimberly Process Certification Scheme emerged to redefine the jewelry industry, raise its standards beyond profit-making, and has given birth to new blockchain networks like the Responsible Sourcing Business Network.
In that vein, regional business consortia, like the Business Roundtable, has updated its members’ principles to reflect values from its 140 members. Couched within the CSR space, altruistic and profit motivations converge, which result in pages of self-produced testaments of social, environmental and economic responsibility.
Leading globally, developing regionally
Accelerating systems transformations in the food and manufacturing sectors require the latest technological innovations. Davos convened a variety of corporations, leaders that make up the top quartile of the SPXESRP. The Information Technology sector represents the largest share — 24.6 percent — of the S&P 500. If technology assumes the business lead by way of the SPXESRP, then naturally, why not assume the lead in the larger space of business solutions, like blockchain, which tackles two goals:
Provide a publicly viewable medium to validate claims.
Facilitate transformation quickly through digital access.
Similarly, on a regional side note, the Middle East and North Africa (MENA) region also tracks corporate gains along environmental, social and governance metrics. The S&P collaborates with the Institute for Corporate Governance in MENA region to track the 50 highest performing stocks. In contrast to the global trend of the S&P 500, the finance sector represents the largest share for the MENA region.
The Ibtikar Fund’s COO, Ambar Amleh, notes how financial services, authentic property documentation, and the “physical stress of carrying and transferring all this cash” pose commercial and legal challenges. So, the Fund selected Omar Barkawi’s GetReceet, which allows businesses to digitally account for goods and services. Barkawi sees how tracking transactions would benefit from blockchain solutions, “tracking food purchase receipts informs health departments without household data identifiers.” Meanwhile, the United Arab Emirates recruited Barkawi for their blockchain exploratory group.
Given how blockchain technology originated in the finance sector through cryptocurrency, blockchain solutions may complement, rather than adversely disrupt, the goal to address provenance and resource planning to develop at a regional level, which has not been the focus of Davos — but could be — given the criticism that Davos tends to be Eurocentric.
Troubleshooting challenges via blockchain solutions
Blockchain solutions can facilitate corporate social responsibility claims too. Watchdog stakeholders hold companies accountable to their CSR goals. For example a social enterprise, like Plastic Bank, addresses poverty and environmental degradation by facilitating recycling entrepreneurship. Supported by IBM, Plastic Bank creates secure financial incentives. Obtaining near real-time data adds to the complexity of holding corporations accountable across horizontal and vertical supply chains.
Additionally, watchdog missions rely on information exchange and transparency, which operate as the incentive to push for blockchain solution adoption tailored for the issues they are tracking. By employing blockchain, one could argue that we increase inclusivity and allow more participation by expanding the number comprising the watchdog collective.
Watchdog stakeholders can maximize their role in holding corporations accountable. Their role in monitoring issues with digitized, near real-time data is their incentive to mainstream the blockchain solutions technology and push for adoption. Watchdogs invest the time and advocate per their focused issue while the private sector invests in the infrastructure to adopt.
Both stakeholder groups will push for accelerating systems transformation while evaluating the value chains in line with World Business Council on Sustainable Development’s Vision 2050 agenda.
Implications and future accountability
Essentially, Davos possesses the power to facilitate companies coming together to provide transparency and speak to their 2050 Vision. As in the case of the blockchain solution potential, the goal for discussion at Davos is to mainstream a transformative concept and evolve it into a solution.
Public platforms employing blockchain solutions provide authenticity and the proof that watchdog groups and global consumers expect when corporations advance CSR claims. Blockchain allows watchdog groups to hold companies accountable to their CSR claims and goals. For global consumers, blockchain solutions facilitate more information flow to inform better infrastructural development.
We look forward to seeing how Davos will incorporate blockchain solutions, which mirror 2050 Vision goals, into its 51st summit next year.