According to new research at the School by Dr Atanu Chaudhuri and Professor Kiran Fernandes alongside colleagues from three other universities, blockchain could help improve social sustainability, increase transparency and eliminate risks, enabling companies to act more ethically.
Currently, global supply chains are subject to fraud, counterfeit products, child labour, and the risk of low quality.
The study investigated how technology can be deployed to support companies in becoming more vigilant about how their practices impact the world around them at every level. It also looked at traceability, to reduce potential risks a company might face from unethical activities in the supply chain, which they are unaware of, so they can ensure fair practices are followed and minimise risks.
To uncover their findings, interviews were conducted with the co-founders and CEOs of service providers providing blockchain solutions in diverse industries such as:
The interviews gave a first-hand perspective of how blockchain implementation was improving social sustainability and reducing risk in the supply chain. To support these perspectives, additional information and evidence was requested from the companies involved.
In identifying service providers to interview, who had successfully implemented blockchain, the study discovered most of the service providers faced multiple challenges doing so.
Dr Chaudhuri and colleagues put this down to a lack of understanding of the mechanisms needed for blockchain implementation to improve sustainability and risk management in supply chains. To tackle this, the study identifies several steps blockchain service providers can take.
Vital steps to ensure stakeholders across the supply chain can engage effectively include developing:
Applying local-level knowledge and building relationships also facilitates smoother adoption of the technology.
With companies under pressure to adapt their practices to better contribute to the UN’s Sustainable Development Goals, as well as be accountable to governments, investors and consumers alike, blockchain can be effective in highlighting problems in the supply chain. It also allows tracking of how this is being addressed, and provides the opportunity for companies to continuously learn and improve services.
“As blockchain enables businesses to track and trace the complete movement of raw materials and products throughout the supply chain, the technology can help identify any potential risks or questionable practices and reduce risk.” Dr Chaudhuri.
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