Jonny Fry

CEO, Team Blockchain

Oxfam claims that at least 60 million people[1] face worsening hunger and poverty because of climate change. Meanwhile, global supply chains have become longer and more sophisticated, offering the opportunity to eat almost any type of fruit or vegetable at any of the time of the year. More than 500 million smallholders produce 80% of the food in the developing world.[2] The sheer number of farmers poses a challenge around collating and storing information regarding how and where food has been produced. What’s more, food production is responsible for 25% of all greenhouse gas (GHG) emissions.[3] Incredibly, a chocolate bar from a de-forested rainforest has a larger carbon footprint than a serving of low-impact beef.

The public is increasingly asking for greater transparency from brands. Customer trust is hard earned, but achievable via the greater use of blockchain technology in supply chains. A report from the Food Marketing Institute in America found that 75% of consumers will buy brands offering more information beyond what can usually be found on labels.[4] We have already seen retailers such as JD.com in China and Carrefour in France using blockchain technology with QR codes. This enables consumers to scan foodstuffs for information on food provenance, as well as methods used in production.

Gartner predicts that 20% of top global grocers will use Blockchain for food safety and traceability by 2025.[5] According to data from Juniper Research, Blockchain technology could facilitate US$31 billion in food fraud savings by the year 2024.[6] The World Economic Forum project, Redesigning Trust: Blockchain for Supply Chains, works with partners representing 85% of the world’s cocoa supply chain.[7] This includes Hitachi executives, 60 transport ministers from across the world, and over 30 organisations from the United Arab Emirates Blockchain ecosystem. Blockchain-powered platforms using smart contracts can capture more data about supply chains using IoT and devices. It is, then, becoming easier to accurately measure carbon emissions in supply chains.

Natural Environment

You Asked Us: Food security in a warming world – part 1

Last month, we hosted a webinar on the increasingly precarious global food supply chain. Here, one of our expert panellists answers your questions.

“Gartner predicts that 20% of top global grocers will use Blockchain for food safety and traceability by 2025. According to data from Juniper Research, Blockchain technology could facilitate US$31 billion in food fraud savings by the year 2024.”

Furthermore, there is increasing evidence that institutions are responding to client demand and looking to use Blockchain technologies being developed by specialist FinTech firms. One such firm is Halotrade. Their Blockchain-powered platform is being tested by BNP Paribas SA, Barclays PLC, Rabobank, Standard Chartered PLC, J Sainsbury PLC and the Unilever Group. It is designed to gather and store the ESG data on suppliers as part of a sustainable supply chain finance program. Investors, too, are looking for funds that can demonstrate their ESG credentials. According to Accenture, ESG funds accounted for 30% (US$31 trillion) of all funds being managed globally.[8] Additionally, green bonds are being issued in the debt markets for projects promising positive environmental or social impacts. In just 10 years, the green bond market has grown to around US$500 billion in value.[9] HSBC was the world-leading green bond manager in 2019, overseeing more than US$14.8 billion in assets. They estimate that, by using blockchain technology, they have saved up to 90% on costs usually associated with bond issuance.

Without a doubt ESG is of increasing strategic and commercial importance for companies and shareholders. Google Trends shows a steady increase in people searching for information on the topic. There have also been various surveys and reports carried out confirming that consumers will pay more for ethical products. There can be no doubt that sustainability, inclusivity and other key ESG considerations are vital investment drivers.

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