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Unilever, Provenance, Barclays, others launch blockchain project on sustainable supply chains

A number of leading banks, blue chip companies and fintech startups are teaming up to explore the potential of blockchain technology for unlocking the financial incentives that reward sustainability in supply chains, IBTimes UK reported.

Fintech startups, including FOCAFET Foundation, Halotrade, Landmapp, and Provenance, will be working with other project partners, which includes DFID, Unilever, Sainsbury’s, Sappi, and global banks Barclays, BNP Paribas, and Standard Chartered.

The project has already attracted private and public funding of over £600,000. It is supported by the UK's Department for International Development (DFID), which is providing £340,000 for this programme through the Business Partnerships Fund.

The year-long project will test the concept of linking financial incentives to verifiable sustainability claims and transparent supply chains, using a shared data system for tea farmers in Malawi that supply Unilever and UK-based supermarket Sainsbury's. In addition, the same system will also be used for tracking the materials produced for the tea's packaging, provided by Sappi.

The technology has been developed by Provenance and Halotrade, while Landmapp will provide land rights documentation via mobile technology. In addition, FOCAFET Foundation will ensure open-source data standards are developed and used throughout.

The pilot aims to test whether the technologies can work together, along with the commercial viability of the application. Key to the success of the pilot will be whether the system can provide companies and banks with sustainability data that is material to their assessments of risk that they are not able to access through existing systems.

“The pilot aims to show how this application of blockchain and other technologies has the potential to be scaled up for a range of different global supply chains. If it’s successful, it could benefit the 1.5 billion families who depend on small-scale agriculture worldwide,” Provenance said in a blog post.

The system involves gathering and recording standardised information from farmers about their produce using virtual identifiers that are encoded on a blockchain. This makes second and third tier supplier information available to all parties that can access that blockchain, making the supply – and its sustainability information – traceable and transparent.

In agreement with their corporate clients, financial institutions can then offer preferential terms or access to credit based on the evidence of sustainability supported by the blockchain. Through access to cheaper levels of working capital, smallholders will be able to increase investments in their farms to become more productive without needing to convert more land.

"Building on Provenance's successful work using blockchain technology in supply chains, we aim to design and demonstrate the power of a collaborative ecosystem approach to tackling the Sustainable Development Goals, through linking preferential financing to verifiable sustainability claims and transparent supply chains," said Jessi Baker, founder of UK-based fintech firm Provenance.

According to the official release, over 10,000 Malawian tea farmers could be reached by the pilot alone, standing to make savings in accessing working capital.

The project was unveiled by the University of Cambridge Institute for Sustainability Leadership (CISL) at the One Planet Summit organised by President Emmanuel Macron, two years after the Paris Accord set the agenda for global climate action. It was developed by a new Fintech Taskforce, which was convened by CISL's Banking Environment Initiative (BEI), and is its first tangible output.

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