November 24th –

A Review on ‘Digitalization as a Key to Decarbonization – What role can blockchain play?’

Blockchain is not the solution to a sustainable future. It is a tool. Like any other technology, old or new. What we make of tools, and how we use the ones available to us, is what defines their purpose regarding sustainability.

The speakers of the GreenBuzz Zurich event hosted at EY Zurich on the October 6th all agreed on the general misconception of emerging technologies like blockchain, artificial intelligence (AI), the Internet of Things (IoT), the metaverse, and many more, being our saviors when it comes to the environmental, social and governance (ESG) challenges the global society has run into in the past decades. The presentations have also highlighted the fact that, although newer technologies are being successfully deployed to reach sustainability goals, many applications factually add to the globally growing carbon footprint. That the internet is contributing more to the global greenhouse gas (GHG) emissions with 3.8% against 2.5% by international air traffic is just one striking example Attila Steinegger (Digital Transformation WWF Switzerland) brought, quoting the UN Environment Programme (2021).

When facing clients who seek new technologies to tackle current and future increasingly policy-driven ESG challenges, blockchain specialist Donya Hardan (IBM) likes to take a step back with them to put things into perspective by posing the question sometimes paradoxically forgotten: What is sustainability?

Each of the 17 Sustainable Development Goals (SDGs) defined by the UN Member States has in itself multiple demanding targets which easily overwhelm businesses when laying out their long-term sustainability strategy. And for many, blockchain is a mystery box in its own right. But besides misconceptions and complexity, the much-discussed technology actually does have great potential to enable sustainability goals and be a powerful ally in SDG related monitoring and tracking. What blockchain is not able to do is change the physical and social reality which in the first place is the source of sustainability issues.

Digitalization is an inevitable result of our technological evolution, and not intrinsically bad or good. And like many other innovations, blockchain finds itself in both corners. Although it has undoubtedly increased global energy consumption, it has also enabled energy usage efficiency as well as delivered higher transparency in tracking for example the carbon footprint chain. So before applying blockchain as a solution, the overall goal at hand has to be defined first to avoid ‘putting the cart before the horse’ as Dr. Liudmila Zavolokina, (Digital Society Initiative at University of Zurich), eloquently put.

In the end, technology, and therefore blockchain, is human-made and does not disrupt or transcend anything but rather acts as a reflection of what we are and want to be, as Sanjin Ploskić (Technology Sustainability Lead EY Switzerland) concludes. Attia Steinegger also emphasizes that this and the future society needs to understand the status quo and challenge the consumption of technology. To do this, we need to know what and how we want to do it with technology. Like Donya Hardan, we need to ask the right questions. We need to ask better questions. And finally, we will have better solutions.

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This article was written by Irene Ma.

Read more about this event, including pictures and presentations, here.