The Blockchain Revolution

Monday, March 07, 2016

18:00 - 21:15

What is the blockchain, and what does it mean for the relationship between business and society? These are two questions we addressed on the 7th March, in probably our most mentally challenging Crowd Forum yet. It was an evening about profound change.

The blockchain has the potential to deliver new levels of trust and traceability, which is where sustainability comes in. It may shine a light on human rights and environmental abuse within supply chains, as well as providing better certification of organic and other positive standards. But, as with most disruptive tech, there is a dark side which needs to be considered.

So what is it? The blockchain began as the electronic ledger for bitcoin transactions, but it has now developed a life of its own. You can see it as a public database, where data can be chained together in a highly secure manner. For more, watch this Newsnight clip, where they ask if this is a new revolution.

We opened with Jamie Bartlett’s explanation of the journey from the internet to the blockchain, and how the blockchain can be used. Leo Johnson, who presented Radio 4’s Futureproofing programme on the blockchain, moderated a discussion on how it can impact the relationship between business and society.

This was an evening for sustainability and technology experts, and anyone who wants to be able to say “I know what the blockchain is!”. 

Speakers

Jamie Bartlett Demos

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Leanne Kemp Everledger

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Leo Johnson Broadcaster

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Sarah Meiklejohn University College London

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Simon Taylor Barclays

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Round Tables

The Blockchain Revolution

This table will digest the panel discussion, and look at the ways that the blockchain can change the way that business relates to society. What are the ways that business, and sustainability teams in particular, could embrace this technology? Do you believe that it could usher in a new era of trust and traceability?

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Table 1a
1. Block Chain Revolution:
This table will digest the panel discussion, and look at the ways that the blockchain can change the way that business relates to society. What are the ways that business, and sustainability teams in particular, could embrace this technology? Do you believe that it could usher in a new era of trust and traceability?
The notes below are a reflection of the thoughts of those who attended the 1a roundtable, the Block Chain Revolution.

General Notes on Block Chain
It was noted that there is a difference between the "blockchain" and a "Distributed ledger". For further clarity see Government Report into distributed ledgers and blockchain, (link at the end of these notes
Bitcoin can be a misleading example, it is a crypto currency which uses both the blockchain and distributed ledger (along with encryption). Previously banks would have a single ledger each and make sure they match at the end of the working day, a distributed ledger is the same but the ledger is shared not just between the two entities but across multiple individuals across a network, with any edits in one copy being automatically updated across the rest.
Block chain is a general concept but describes a chain of information which needs the previous information to be correct to make the next step. Described like building a wall out of bricks (Blocks) which need those below to be present and correct before additional blocks can be put on top. Those on the bottom can't then be changed.
The issue is that (for processes like bitcoin) to add a new layer then have to undertake and solve the crypto puzzle. This is difficult and requires extensive computing power. The crypto puzzle is difficult to solve but the checking it is correct is simple (so everyone can agree it has been solved easily). Only when the first person has solved the puzzle do they get the rewards (which in the case of bitcoins is 25 bit coins)
What did attendees think was the main use for Block Chain?
• Main area of interest for multiple attendees was regarding the supply chain certification and tracking a material/good/item through the chain to ensure correct chain of custody or original source is as claimed.
• To avoid fake or counterfeit goods, (specifically medicines)
• The integrity of the good, e.g avoiding horse meat scandal
• Passports and identification of people
• Fearful that could lead to less information being made public for the fear of negative repercussions
• How block chain will be used across technology, such as copy right licencing’s, or within agri-business
• Efficiency benefits to those areas already needing checks/chain of custody
• How could it be exported to less technologically developed regions, small famers, how do we get people to embrace it
• will another digital skills gap emerge
• how could block chain start-ups help with the finance industry, know it is coming but not how will effect
How does/will bit coin relate to society?
Can it help prevent corruption?
Money was previously set to the gold standard (i.e. only own as much currency as there is equivalent gold), bitcoin tries to replicate this with only so many solvable puzzles which equal coins; if bitcoin replaced current currency then it would not be possible to effectively print money. The ability to create money is needed for expensive things like wars, therefore if the world worked on bitcoin, nations could only go to war if could afford it (not likely)
Any new tech has a few minority responsible companies which put the effort and resources into developing it and bring it to market, e.g. for the certification of products, the challenge is how to make blockchain easy and available to everyone. Or how to get a single standard developed (globally) which can then apply blockchain to.
Currently there are too many standards, things like diamonds work as they are fixed, high value and fairly simple to track through a few key players, markets, etc. Diamonds also already had a set standard which can be applied. Not so easy with coffee!
Other things to note: block chain, and using terms wallets with bitcoin is a false analogy as only works if everyone agrees that they have a link to the digital hash linked to blockchain
Do people believe it will usher in a new era of trust?
Pharma’ industry has multiple stages and needs credibility in each and every one, blockchain gives clarity to everyone in the system, e.g. Samsung could use blockchain for material sourcing
Is block chain too new and complicated for the issues of supply chain? Is there an alternative or existing technology which could solve the issue?
Could blockchain be too specific for traceability of goods like barley for brewing, where a less detailed approach would be more fitting?

Table 1b
State of the art
We see several competing designs on the market – Hyperledger, Everledger, Ripple, CAP theorem, Bitcoin and others. We may look at this technology as a methodology to be used in different situations. There is an easy application for it in goods traceability market, but right now it is sometimes only used as an insurance (for instance, in the case of Everledger). However, it could be applied to the whole of supply chain. Possibly, we will be adding this tool to the others we already have – cloud, big data – to apply them in a congruent manner in the different settings. Ultimately, it should be a tool for enhancing credibility and trust.

Societal link with the blockchain
Besides being important to several particular industries already, blockchain could play an important role in copious other avenues. Some of them are identification and authentification, property rights establishment, transparency of the supply chain to customers and investors as well as risk management.

What is your role as we approach a lot of these unknowns?
Finding people who understand this – who’s talking about it within organizations? What are they talking about? Government is looking to business for the development of this technology to be taken forward while business is faced with several different types of blockchain and would possibly benefit from a set of standards. We are at the start of something big internationally – and we need to be careful how we approach it.

Bringing together implementation
It appears that the dominating blockchain will be a hybrid solution – somewhere between bitcoin and a rather loose use of it. An important task will be coming to a consensus as to who is part of it and who has a permission to participate.
Alliances and networks of firms will be an important way to mutualise the information. Global consortia will need to answer questions as to the appropriate use of blockchain because it is a truly global phenomenon. In all likelihood, working together to develop the technology could facilitate greater adoption. Some applications could be management of carbon transactions or future energy networks.
At any rate, it is likely that the technology will be developed fast and it is rather difficult to predict how exactly it is going to be used – which brings about excitement but also caution about its potential use.

Table 1c
Challenges with using the blockchain
- The mining system that is used to verify Bitcoin transactions consumes significant computational resources and therefore has a large carbon footprint. However, more modest solutions are possible that are less energy intensive.
- In a ‘permissionless’ distributed ledger system verifies are required, and their integrity is assured through a system of incentives, which are normally economic. The cost / time to audit or verify the public ledger can be significant once the ledger reaches a certain size.
- The technology works well for digital transactions, but to track physical products or to help manage supply chain certification schemes it only looks at a snapshot in time. For example, a certifier could assess a factory to ensure slavery is not occurring and findings from the inspection could be added to the blockchain, but it would only be correct at that point in time.
- There is a risk that transparency will come at the expense of personal privacy – how can you ensure the protection of identity?
- The cost of tracking individual goods or assets using blockchain technology could be prohibitive.
- If a good or asset changes (for example, a diamond being cut or polished) then it can be very difficult to prove provenance.
- There is still a question of who is responsible for managing the system. If it is distributed, then you need a system of incentives which can become costly. If it is an individual organisation then it’s not true blockchain technology and does not deal with the challenges of trust and transparency that it is trying to overcome.
- There is a risk that by improving transparency and traceability in certain areas of a supply chain it will undermine trust in other areas. If only a proportion of goods in a particular market are tracked using the blockchain, this could devalue the rest of the market.
- With any new technology there is a risk of it being ‘over hyped’, and there are many interesting ideas of how blockchain technology could be applied to business that are not workable in practice.

Solutions – how can the blockchain be applied to sustainability?
- Certification schemes: blockchain technology can be used to enable secure traceability of certifications. Users will be able to unambiguously discover the origin of a particular certificate without having to trust a single authority.
- Organic / low carbon products: tracking product authenticity and origin, creating an auditable record of the status and journey behind all physical products.
- Personal Identification: a publicly distributed ledger can help track undocumented people. Birth certificates and identities verified on the blockchain would be unforgeable, time stamped, and publicly viewed for all humans to see. This would also mean that identities are owned by individuals, rather than nation states.
- Slavery: these personal identification systems can be used to tackle human slavery.

Examples of how the blockchain is currently being used
- DeBeers: using blockchain technology to tackle the diamond industry’s fraud and theft problems. By using a digital ledger to track over 40 data points related to each diamond, institutions across the supply chain can access and supply data to verify the status of a stone.
- Smart contracts: self-executing contractual states, stored on the blockchain. The terms of the contract will be carried out automatically, which will reduce risk and improve efficiency.
- Charity donations using smart contracts: the smart contract would detail how the donation can be spent, which prevents fraudulent activity and provides confidence to donors.
- Banking: looking at using blockchain technology to improve the way in which documents are used in transactions.

CSR meets tech

With many companies turning to tech to change the way they connect with society, we discuss the main areas of opportunity - from efficient platforms to smart meters, the blockchain and data analytics. Is the CSR community sufficiently versed on these technologies, and which organisations are leading the way?

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Table 2a
Democratising society locally is a great endeavour especially when big companies support small local charities and projects, but there is a shortage of mechanisms that could reliably put a sum of money in the hands of a small local group. If a blockchain solution could enable companies to do that it would be great but it is yet to be seen
· We may not need to understand the coding the blockchain but “what will it do for me”: for example if something can prove certainty of transaction e.g. FairTrade banana farmers in Ghana to prove provenance that they sent a shipment then they can get paid. Also, applications for national charity giving, asking communities where are funds best spent – if it can help us get investment into the local community quicker that would be great
· Today I need to understand the mechanics behind blockchain, in 5-10 years probably not; 10 years ago I needed to understand how to code a website now I can use a system. Mobile tech leapfrogged traditional methods of communication so that is entirely possible
· Concerns: If there is an error and one blockchain trusts the other blockchain there may be a problem without regulation? At the same time transparency inbuilt into the system builds an element of trust. Finally, protecting diamonds requires a level of security that’s very high but elsewhere the security doesn’t need to be so absolute.
· Other applications: It can also be applied as a local currency that can only be spent with local communities – but then if I am in Bristol will I choose the blockchain or the Bristol pound? Citizens trust intermediaries, they trust each other and to an extent they trust companies and brands; so intermediaries may still be needed
· Other applications: Those that deliver the final charity service can click somewhere to authenticate their act. If we know UK is giving million hours a year and this is invested in local community, how does government know the combined effort of charity/volunteering in a given region? If you can capture that and have trust in it, it will be a very useful log of data

Do we see Barclay’s example of changing focus to local communities happening throughout business?
· Barclays enables local communities wherever they operate. E.g. promoting financial education enabled locally
· The Co-op did some work around engagement and found that the biggest single factor around employee engagement is enabling them to feel like they impact the community. In some areas it’s about financial skills awareness, in others about social mobility. The Pioneer project allows those that work in a store or a branch to coordinate local activity- they decide what’s most important for that store. Some of the work is very powerful and engaging. The basic premise is that local projects vary according to local needs.
· Another example chain: when they take a store in a new community they embrace local stores, because they see the competition as other supermarkets not the local independents. The expected outcome is for the consumer to consider “When I choose to buy from a chain, I’ll buy from you and not another”.

Table 2b
Opportunities
• Resolving issues around supply chain compliance and supply failure risk management
• How do we define the real social benefit?
• Eradicates counterfeiting – can have profound effect – eg: rogue alcohol can kill
• Improving transparency and audit trails
• Supporting social and environmental programmes by improving traceability
• Can identify child labour issues
• The bigger it grows, the more secure it becomes
• First mover advantages to be gained by early adopters.
• Smart contracts will revolutionise the way we do business
• Economic incentives/cost reductions
• Speed of transactions becomes much more efficient

Challenges
• No one was already using Blockchain, nor knew of anyone using it.
• Availability of internet issues
• How do you create a unique thumbprint for products such as organic cotton, or bottled beer in a global context?
• Access to the technology – how can it be democratised?

Few things to be aware of
• Could give competitors too much insight into what organisations are doing – gaining unfair competitive advantage?
• Is this technology overkill when a more simple (and controllable) solution might suffice?
• Who owns the data?
• Is this not just “digital certificates on steroids”?
• Embryonic and open to abuse
• How much does your access to records depend on how deep your pockets are?
• Can this technology highlight an organisation’s margins/profitability?
• How far can we control this technology?
• How far can we guarantee it can’t be hacked?
• Access to knowledge is valuable – its power depends on who is within the chain and the price we are willing to pay to have access to the information.
• Peer pressure will force organisations to adopt the technology whether they want to or not.
• Possibility for early adopters to form monopolies in the supply chain?
• This will radically change the way the internet is used and how data is stored.
• Public policy related issues are likely to ensue.
• Will this solve problems or create them; will it create barriers to sharing information or eradicate them?
• Suspicion around how the stored data can and will be used
• Issues around the security of personal identification material

Going local

A number of companies like Barclays are increasing their focus on local communities, where returns are tangible through employee and customer engagement. Do you see this as a fundamental shift in strategy, and how should organisations balance local opportunities with complex global challenges where returns may be less tangible?

Making data work

Companies are awash with data, and the challenge is to get it into a usable form where it will influence decision-making. Looking through a lens of carbon and energy data, we’ll look at the platforms and techniques that are emerging that provide the right level of insight to deliver action and momentum.

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Data and the Blockchain
• Is the application of the blockchain ready to scale yet, and how it may apply to energy and sustainability data?
• Example: Tracking of wood through the use of FSE tags; algorithms allow to track a bunch of trees using a snapshot that may be put into the blockchain. However, technology does not manage to track a single tree (nowadays only specialised website allow it).
• There is a key challenge in verifying how resources are effectively green and in measuring what is produced and saved in terms of green energy.
• Solution: As the energy market is centralised, the blockchain could potentially lead to decentralise the market making small, green transaction possible, thus extending the sense to cut waste to private households.
• How can the blockchain help companies to have an impact?
• Solution: having data shared and visible from everybody can increase the social pressure since energy has always had the problem of measuring hidden data.

Reporting
• How to efficiently and quickly use the blockchain to report data.
• Example: an outsourced blockchain platform which works properly and is able to collect data need to increase its efficiency in terms of information it gains and speed it works.
• Example: Hotels use benchmarks based on last year information to assess how much they have and how much the should have used, in order to be alerted in case their usage is not what it should have been.
• Warning: a key difficulty is having a dashboard able to measure waste, water and energy usage in a way it could adapt to different business, using a simple and beautiful platform.
• How to shift the focus to activities and outcomes (as a result of the analysis of data)?
• Example: use of a CDP reporting platform to assess carbon footprints of companies; investors usually care only about the fact that the job (i.e. the measurement) has been done, no matter how.
• Accounting for sustainability data is a complicated issue and there is the need for companies to harmonise sustainability reporting in order to have comparable figures which can lead to actions.

Millennials mean business?

Millennials are lazy, entitled, spoiled brats… workplace divas who need constant handholding and will quit a job at the drop of a hat… Or are they? We’re building a table of millennials and non-millennials to unpick some of the myths and stereotypes around the most talked about generation in the history of mankind.

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To clarify, the definition of a millennial is someone bon in the 1980s and 1990s, also known as Generation Y.
There are two prevailing narratives about millennials that we wanted to discuss:
1) They are spoiled, mollycoddled, technology-addicted lazy brats who don’t know what hard work is, need constant handholding and will quit a job at the drop of a hat.
2) They are purpose-driven, values-led, passionate individuals who seek careers with meaning and are our best hope for a sustainable future for business.
We were interested to explore what people thought about these stereotypes, and invited people to draw on their own beliefs and experiences to feed into a debate.

OPINIONS/COMMENTS
- Much of the narrative is attributed to millennials e.g. a desire for flexible working, but is not always a solely millennial issue. These are improvements to a way of working that benefit everyone.
- Much of the larger companies e.g. financial and professional services have always relied on recruiting fiercely competitive ‘Type A’ people who will go to any lengths to get ahead. They are now having to adapt to millennials who are now pushing back and calling for better work-life balance.
- To what extent is the millennial definition even a ‘thing’? Is there any reason to believe that it’s not a continuum, that there are always differences between the various generations, why must it be so clearly defined and labelled?
- Perhaps the difference is that now for the first time companies are actually doing something about what people want.
- For people graduating in the 1980s, there were only a few professions to choose from (doctor, lawyer, accountant etc.) There were established career paths that people could follow. There are jobs now that didn’t exist then – and these are due to technology, internet, social media. There is a lot more opportunity, but also potentially too much choice.
- Whenever you are born in time you are reacting to the culture around you, it also depends to what degree you keep up with these technological advances as you get older, as these things are constantly changing.
- Progress is continuous, but the pace of change has changed since the internet. The future generations will be different but we now have a base level of understanding with the internet.
- What to millennials bring to an organisation? They bring a different perspective – a bigger perspective. Many grads that come to the graduate scheme are more than just engineers, they are able to think outside the box and see things in a global context.
- Particularly in institutions or industries that have not been ‘milleniallised’- i.e. traditional corporate industries - there are still people there who are predominantly motivated by money, whereas now, many millennials seek purpose rather than money in their career.
- 25 years ago, you had to join a corporation to make money. But now there are many more opportunities in small and independently owned businesses which are breaking down traditional ways of working.
- Good advice to young people today is to do what you love, and do it well, and someone will pay you for it.
- Maybe now young people have more access to knowledge – they are aware that the world is doomed (environmentally/socially) and they want to do something valuable to contribute.
- It’s true that the sustainability movement has more energy than ever, but consumerism is also alive and well, it’s just a different type of consumerism. People are buying local, and buying independent brands. Millennials are keen to show their individualism through the brands they buy. Compared to previous generations, millennials spend less on ‘stuff’ and more on experiences.

IS IT FAIR TO SAY THAT MILLIENNALS ARE ENTITLED AND SPOILED?
- Many millennials in the western world are born into a reality of comfort and wealth, and so it’s possible to reach the self-actualisation phase of Maslow’s hierarchy of needs – and therefore perhaps pursuing values-based careers is more of a priority than it has been for previous generations.
- Due to being born in to a world where labour saving gadgets are the norm, millennials aren’t used to drudge work. They are often looking for a quick fix or a ‘hack’ to help them achieve their end goal. Maybe this explains why people say that millennials don’t like hard work!
- Technology has a huge impact on culture. Close proximity to the adjacent generation has always been expected, but now there is such a huge cultural chasm created by technology and the new way of working created by the internet, which is perhaps why millennials seem so different to previous generations.

Revolution or evolution?

Will the caricature of business maximizing shareholder value, whilst government and charities take care of society, give way to a different model where business is the solution? What might the different roles look like? Are there examples of new structures, such as B Corp, or corporate / charity partnerships that hint at that future?

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Currently, consumers and stakeholders have to trust a company’s green claims with little ability to verify those. Corporates are increasingly engaging with society (30% of corporate value is in engaging with society) – however there is no accomplished system to check it. Consumers are left confused.

Could the block chain be a potential game changer?
Despite several standards having been established over the years, measurements are still not consistently standardized and hence a global consistent standardisation of impact measurement is not possible. This is particularly true for social impact assessment (scope 1 and 2 GHG emissions are fairly standardised). Different tools are required to measure the social impact and hence the development of standards focusses on standardising the level of quality of evidence provided.

Increasingly, corporates are understanding the value of “doing good”. For example John Lewis makes its employees to owners, creating a community. However, this is still an exception and on a broader spectrum, shareholders come first. Companies are advancing at measuring environmental impacts and monitoring the progress but are not addressing the total impact. The example was given that a watch manufacturer may measure the impacts associated with the manufacture but not the impact to society of people being more on time.
Overall, more work is required to incentivise corporates to measure negative and positive environmental and social impacts. More demand may come from new generations for transparency and accountability.
Millennials already care for the sustainability credentials of future employers. Generation Z is being brought up as a global citizen. The internet and social media allow access to instant global/local information. Taking the financial crisis, the instant access to information during the last financial crisis re-initiated a conversation about business and their purpose as the increased access to information meant more transparency and involvement of greater society.

In order to attract talent to organisation, corporates need to prove their credentials. The current generation grows up with the internet – could the block chain be the next internet? Would we have been able to predict the power of the internet when it was first introduced? This roundtable could definitely see the exponential growth and usage of the block chain.
Caution needs to be applied however, as consumers may demand more transparency from consumers but what would be block chain mean for consumers’ privacy. There may be consideration to be made consumers are currently not aware of. Furthermore, it was questioned at the roundtable to what extend we get a broader worldview, when the internet feeds us customised information based on previous searches and views. How would the block chain concept be customised?

The sustainability dashboard

Whilst the Blockchain offers a transparent future, there are many ways of accessing decision-making data today. We discuss what data should be on a sustainability experts dashboard, and how this might change in the future. What kind of data is most useful, and how do you make a business case for investing in data analytics?

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What should be on a sustainability expert dash board
- Corporate dash boards are no longer hard copy. Its far more integrated. And can be merged into CSR plans.
- We see more Tableau based systems, interactive systems on websites. Real time data is the emphasis now, annual reports are becoming out of date because they are out of date by the time they are published.
- Being able to control data in real time makes people more than just compliant, you need to be able to manipulate data to make complex data into a simple visual
- Reactive data. How do decisions we make effect the numbers. So instead of looking at reports of what they’ve done in the past, interactive dashboards enable you to predict into the future.
- Does an interactive approach enable us to look longer term?
- The data we have can now form a pathway to where you are going rather than just reporting.
- Dashboards can tell a story and can help plan where to go. They have a predictive nature.
What is the most useful data we need?
- Different companies use different data obviously. But everyone wants to come back to finance. so most companies will want to do show profits/ make things have a monetary value.
- But can this information be monetized? It goes back to seeing if you can monetize the environment
- So really data just has to be accurate. But we need to make sure we don’t just record what is easy to measure but what is useful.
- The dashboards need to be useful for stakeholders and investors
- It needs to be useful data which can help future decisions. Don’t just use the data you have, stretch yourself to find more data.
- The dashboards need to be reactive and speedy, so that you can quickly use the data
- Making the data updated as you go along is also important, otherwise it ends up being an annual report. Focusing your data is important, the less you show the more it means
- New technology could affect the data, so you have to keep on top of it.
Dashboard critique
- Who decides what data you have to show? Stakeholders/investors?
- How do you transform this data to become predictive? We are still quite early days in this direction.
- Are we challenging norms enough? Why don’t we spend some time working out what data we actually need? Ask your board members, how does it fit with your strategy?
- Using fresh eyes to look at a problem and THEN looking at which data we need.
- Some data though, isn’t able to be put on a system. Like if you are counting the amount of small holder farmers you have reached, it’s still hard to find this basic data, some companies are not at the stage that they can use data to predict where they are going.
- BUT most of the dashboards that are created NEVER get looked at. Especially if there is too much information. You end up devaluing all the different metrics. You have to boil it down to a simple metric.
- Its better to do three things really well than have too much information.
- Give people what they need to make a decision. Not what they want to see, as this may be crowded and too much info.
- REMEMBER THAT YOU NEED COMPARITABILITY BETWEEN COMPANIES. Benchmarking is between companies so you have to do an element of compliance and you can’t just go away too much and choose your own data and metrics completely.
- But then you end up creating perverse incentives with benchmarking. People end up driving the right story forward rather than the actual story. People can make data look like anything.
- Maturity of a business will also determine the maturity of the dashboard at the end of the day.

Tomorrow’s sustainability leader

As a growing chorus proclaims the death of a “sticking plaster” CSR, we explore what the team entrusted with the relationship with society should be doing. Do we need to broaden the remit to cover issues such as tax strategy? Do we need a new type of tech-savvy leader with a broad skill set? Who are the role models, and why?

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• Not health and safety/changing legislation, but rather what the next generation will want for a company that concerns them

What should a team entrusted with CSR be doing?
• Sustainability should be interrelated into business. It shouldn’t just be a separate team/term (CSR)
• Has to be business relevant and integrated into business and tax
• Materiality is key to sustainability in business i.e. making sustainability relevant to your business and the impacts created by your business, and your clients’ businesses.
o Businesses are getting better at this: they’re starting to look at short term finance and reputation
o They now need to balance this with considerations of wider strategy and market issues
• Debates should be had over tax to explore what they should be incentivising/disincentivising
• Sustainability should be a transformation as much as an improvement
• Businesses should consider how sustainability can be used as a lever to gain competitive advantage
• Different clients and different countries require sustainability to be implemented differently
• Sustainability as a risk management tool should be a new lens for innovation, not just damage limitation

How close is the integration of CSR into strategy a reality?
• General group consensus that it’s not overly common, but is becoming increasingly so, and is highly dependent on the attitude of the management and leadership
• Also depends on the purpose of the business/organisation – one with a natural focus on sustainability for example is more likely to practice what they preach
• Many companies know they need to report on CSR metrics, but it’s debateable how integrated such ideas are into company strategy
• It’s the work of intermediary organisations, companies, and consultancies to encourage the integration of CSR into strategy through materiality – translating sustainability into the language of a business
• Standalone sustainability report encourages a separation of sustainability and strategy – not considered a positive approach

Sustainability leadership
• Should leaders become interested in sustainability or should companies have dedicated sustainability leaders?
• Only way to get the former is for sustainability to speak the language of the business
• Circle of influence in changing: sustainability becoming more influential over time with leadership
• Not just leadership – has to be a consensus in the organisation to create a shift towards sustainability
• The most difficult level to imbue with sustainability change is the middle level of the company – grassroots and strategy-level have an easier task, as the former don’t have to make as many difficult day-to-day decisions concerning the business, while the latter are in charge of strategy
• Assessment of long-term risk is a key part of sustainability, which is a key concern for stakeholders. Consequently they can push sustainability into a company’s strategy
Do we need a new type of tech savvy leader with a broad skills set?
• One alternative for the integration of sustainability with company strategy is having a good leader at the top of the business that allows workers below them to express sustainability in their operations
• This would depend on the level of centralisation of the company: a decentralised company would complement the freedoms offered by such a leader
• New, younger generation coming in to business who are typically more tech savvy and replacing older generation who are typically less tech savvy. The new generation need to communicate technological competencies within their companies through reverse mentoring
• Democratic company structures allow freer flow of ideas around the company, allowing easier reverse mentoring
• Older leaders can be the ones to initiate reverse mentoring, either formally or informally

Transparent supply chains

Nestle’s recent decision to go public on human slavery in its Thai supply chain was well received, but it hints at the size of the hidden environmental and social risks that companies are carrying. Are there cost-effective ways of identifying and internalising these supply chain risks today, or should we pin our hopes on the blockchain?

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The automotive industry has been “tagging” parts and elements for years, making the manufacturing process easily “traceable”.
But finding an appropriate tag for all materials is tricky – how do you tag a liquid?
Once the “hard handshake” is secured, human involvement can be lessened and errors eliminated.
Block chain is just part of the evolution of business, but it might be revolutionary for cost. The systems in place at the moment are expensive, in both time and money.
For now, Block Chain is mainly B2B, although it has the potential to reach the consumer – in theory a consumer should be able to check a product’s validity right back to source.

o But how can something be tagged throughout processing and manufacturing?
o Consumers are the last element in the chain and, for now, eliminating the problems at source is a more efficient way of improving the whole system (consumers see the benefit of legitimacy regardless).
The diamond industry does not use Block Chain for financial gain
o It is a self-regulated industry.
o This structure eliminates the “black-boxing” of data – no one organisation holds the monopoly in data.
Block Chain relies on valid data being input – it only safeguards the process from thereon in.
• Until now checks and forgeries so far have generally only affected the reputation of the company and not the products itself – Block Chain has the potential to safeguard the company’s processes and profile.
• Can Block Chain be applied to all materials?

o Is an “organic” or Fairtrade currency a possibility?
o Ensuring that all transactions and materials traded are certified organic
o No ambiguity as it can only be used in organic of fairtrade supply chains
o This would link the physical product and the financial transaction
o Already happening in the form of systems of warranties in the diamond industry
• So where could the Block Chain really add value?
o Matching and mapping different sources in an integrated database
o The efficiency gained over the settlement of financial transactions
Faster and without changes
Other than that…why would manufacturers want to invest?
Consumer confidence?
At the moment manufacturers rely on demonstrations of authenticity (and auditors) and at the moment, it appears to be enough.

Venue Detail

Bank of America Merrill Lynch: King Edward Hall

King Edward Hall | 2 King Edward Street | London | EC1A 1HQ

Directions

Bank of America's offices are a very short walk from St Paul's tube station (Central Line). Exit the station at Cheapside/Newgate Street. Go past the BT centre, with it on your right-hand side and take the first available right down Edward Street. Continue down this road for 80m and the entrance to the venue is on your left-hand side.

Do not go to the main reception desk at their offices when you arrive. You are looking for an entrance that leads you directly into the King Edward Hall.
Who's Attending