Consumers want transparency. Brands want to give it them. And now the World Economic Forum is taking steps to make sustainability and ethical reporting not just the norm across business sectors but also easy for consumers to understand and access.
On Thursday in Davos, WEF unveiled a platform that will tie together companies’ fragmented efforts sharing their supply chain activities in siloed blockchain systems. Billed as the “first neutral and public traceability platform capable of visualizing blockchain-based supply chain data from multiple companies and sources,” WEF’s new offering digests data from myriad blockchains, synthesizing and sharing that information on a publicly accessible site.
“Transparent supply chains are happening,” Francisco Betti, head, platform for Shaping the Future of Advanced Manufacturing and Production, World Economic Forum, said in a statement. “To help companies respond to consumer demands and not get left behind, we have built the first platform that works across industries to interpret data from different blockchain solution providers.”
WEF intends for the blockhain initiative to “accelerate adoption” and spur businesses to “co-design the technical scope as well as how we tackle tough questions around privacy and how we connect the physical and digital worlds,” Betti added.
The system was created in collaboration with London-based blockchain startup Everledger and UN-affiliated International Trade Centre. Addition collaborators Lenzing Group, a cellulosic fiber producer, and TextileGenesis previously paired up on a source-to-store traceability venture last year.
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“As consumers are more aware than ever about the social and environmental impacts of the apparel they purchase, transparency is key to addressing their concerns,” Lenzing Group CEO Stefan Doboczky said, noting the Austrian firm’s “important contribution to green up the fashion industry.”
“A growing number of suppliers contributing to traceability platforms like the one of ITC is essential to globally supporting sustainability and fighting climate change,” he added.
Niall Murphy, CEO and co-founder of Internet of Things company Evrythng, describes supply-chain transparency as “fundamental to competitiveness.” With nearly three-quarters of Western consumers preferring brands on the sole basis of their transparency efforts and nearly one-third of “values-driven” Gen Z saying the same, “an open, trusted ecosystem for data sharing is critical to meeting the need and scaling its accessibility to all stakeholders,” Murphy said.
“Circularity in the world’s supply chains of consumer goods, the path to sustainability, cannot be achieved without new networks to exchange data,” Murphy added.
Thirteen-month-old Indonesian firm Asia Pacific Rayon, which began experimenting with blockchain last year, also joined the WEF-backed initiative. Asia’s first integrated viscose-rayon manufacturer, APR claims to source wood pulp from sustainably managed plantations, producin up to 240,000 tons of fiber each year.
“APR has started harnessing the potential of enterprise blockchain technology to enable customers to trace finished products back to the plantation forest origins on a smartphone app,” APR’s business head Ben Poon said. “To be able now to connect our data to other similar industry initiatives is a natural next step for APR, as is extending the benefits of our upstream traceability to the rest of the textile value chain. The more data is shared, the more we can join the dots to harness efficiencies as a business as well as provide sustainability assurance to consumers.”
The WEF-backed project marks a welcome development for blockchain, given that Gartner sees many distributed ledger supply chain initiatives languishing in the pilot stage without scaling up to the next level. Eighty percent of such efforts will be stuck in first gear, the research firm said Thursday, blaming supply chain companies for trying to copy successful blockchains in other areas of business without first figuring out how the technology translates to the “very complex” needs of their particular sector and operations.
Supply chains operating in today’s environment “require digital connectivity and agility across participants,” Andrew Stevens, Gartner Supply Chain practice’s senior director analyst, said. “Many organizations believed that blockchain could help navigate this complexity and pushed to create robust use cases for the supply chain. However, most of these use cases were inspired by pilots from the banking and insurance sector and didn’t work well in a supply chain environment.”
Building a blockchain often equips companies with insights into what’s actually happening across their supply chain’s myriad touch points, according to Gartner.
“Many supply chain leaders that have conducted blockchain initiatives found that they now have a more complete overview of the current health of their supply chain. Their perception on how blockchain can be used in the supply chain also has shifted,” Stevens said. “By going through the process of deploying a blockchain pilot, they discovered what needs to change in their organization before blockchain technology can be leveraged effectively.”
Gartner also sees blockchain becoming a critical element to supply chain leaders’ risk management strategies and long-term technology planning.
“We see that many leaders are adopting a broader end-to-end view across their supply chains and map all requirements—from sourcing across manufacturing to the final distribution,” Stevens said. “Having blockchain as part of an overall technology portfolio has created opportunities for internal collaboration across many areas that have a potential interest in blockchain, such as logistics and IT.”