Blockchain technology may help refugees maintain legal identity and have access to relief services when they cross borders” ~ Staci Warden, Executive Director of the Center for Financial Markets at the Milken Institutehttps://www.ccn.com/blockchain-refugees-identity/
Blockchain technology solutions started in the cryto0currency energy and is spreading further into the hybrid of finance and technology #FinTech. Now, other sectors, like the social sector, could see benefits. On this positive note, the ArabNet virtual conference highlighted the possibilities for tech startups to address social and health problems aggravated by the Novel COVID-19 pandemic.
In November 2019, PITAPOLICY forecasted that the UAE would lead as the first adopter of the blockchain tech solutions in the Middle East & North Africa region and published in a joint white paper with Kurt Wedgewood. The UAE company Watania ( demonstrates this in the #fintech (financial technology) space while collaborating with tech startup Addenda–an Insurtech affiliate.
Corporate Social Responsibility: From Social Sector to Corporate
Last month, after the annual World Economic Forum (WEF), @PITAPOLICY co-wrote a piece with Kurt Wedgewood for IBM regarding the possibilities behind blockchain technology solutions for corporate social responsibility (CSR). Before WEF held its event in Davos, @PITAPOLICY spoke with the COO of the Ibtikar Fund, Ambar Amleh, and interviewed a set of Arab tech startups while in the Arab Gulf. Below is the entire discussion.
The World Economic Forum (WEF) champions the Fourth Industrial revolution by recognizing the interdependence of networks and value chains with technology capabilities for solutions to global consumers’ most pressing challenges. When we act as a global community to govern and resolve, we rely on openness, transparency, trust and authenticity in tandem with other stakeholders. Technology solutions, like blockchain technology, facilitate openneness, transparency, and authenticity. While the topics may not be directly listed on the WEF thematic panels, the hallway conversations and speakers are sure to make points on the needs and provide recommendations.
Inclusivity & Leveraging Blockchain for CSR at Davos
Considering the next set of challenges, the WEF selected three key themes that are also informed by the fifty global civil society organizations and nongovernmental organizations:
- Shaping the Future of Global Public Goods
- Shaping the Future of Technology & Governance: (Internet of Things)
- Partnership Not Ownership Will Turbo Charge Economy
Each theme relies upon openness, transparency, trust, and authenticity to speed up information exchange, and ultimately, the speed of transformation. However, inclusion underpins the likelihood of success to actualize these goals and also remains an area of improvement for those critical of the Davos Summit for its elite beginnings. In fact, WEF Founder, Klaus Schwab will focus on “pushing politicians and business chiefs towards a new ‘inclusive’ globalisation to fix the gap between the ‘precariat’ many and the privileged few.” So, what better gathering than a Davos Summit, for promoting goals and solutions, given the technology and collaborative capabilities the World Economic Forum champions.
As the summit events occur there is one role that leaders will likely be talking about: Corporate Social Responsibility Leaders (CSRs). The role of Corporate Social Responsibility is increasing as consumers, shareholders and employees are asking corporations for more transparency. The financial, manufacturing, energy, consumer product and retail sectors are working to provide more insights to stakeholders for both altruistic and pragmatic reasons. The efforts are aligning well to consumers. IBM and NRF have published findings that 70 percent of consumers would pay a premium of an estimated 35 percent. While, Thomas M. Kostigen, director of sustainability at JConnelly, declares that “investors have been moving money into the companies perceived as socially responsible. There is now more than $12 trillion invested in a variety of socially responsible ways. That’s 1 out of 4 of the total assets under management in the U.S. alone”. Brand identity with social good will continue to help generate higher returns and those late to adopt this cultural shift will forfeit marketshare and profits.
Looking back at one of the biggest corporate social responsibility controversies in the twentieth century, conflict “blood” diamonds, highlighted the role corporations play in checking dangerous supplier value chain conditions. A series of binding agreements among industry leaders promoted tracing the source of the product and challenged unethical means of procuring diamonds from war-torn Sierra Leone. As a result, the Kimberly Process Certification Scheme emerged to redefine the jewelry industry, raise its standards beyond profit-making, and has given birth to companies like Everledger and the advancement of blockchain technology.
In that vein, regional business consortia, like the Business Roundtable, has updated its members’ principles to reflect values from its 140 members to commit to:
…Dealing fairly and ethically with our suppliers. We are dedicated to serving as good partners to the other companies, large and small, that help us meet our missions. Supporting the communities in which we work. We respect the people in our communities and protect the environment by embracing sustainable practices across our businesses.
Couched within the CSR space, altruistic and profit motivations converge, which result in pages of self-produced testaments of social, environmental, and economic responsibility. To what extent are these claims true, vague, valid, or leave room for improvement or future collaboration to tackle the next level of interconnected challenges?
“Companies shouldn’t be the only arbitrator of truth”, Patricia Cartes who has led socially responsible missions at various technology companies and currently serves as the Head of Trust & Safety at the fast-growing Postmates.
Leading Globally; Developing Regionally
However, accelerating systems transformations in the food and manufacturing sectors require the latest technological innovations. Davos will convene a variety of corporations, like Amazon and Visa, Inc, that also happen to lead in the top quartile of the SPXESRP. The Information Technology sector represents the largest share–24.6 percent–of the S& P 500. If technology assumes the business lead by way of the SPXESRP, then naturally, why not assume the lead in the larger space of business solutions, like blockchain, which tackles two goals:
- Provide a publicly viewable medium to validate claims.
- Facilitate transformation quickly through digital access.
Middle East North Africa Too
Similarly, the Middle East and North Africa (MENA) region also tracks corporate gains along environmental, social, and governance metrics. The S&P collaborates with the Institute for Corporate Governance in MENA region to track the 50 highest performing stocks. In contrast to the global trend of the S&P 500, the finance sector represents the largest share for the MENA region. Given how blockchain technology originated in the finance sector through cryptocurrency, blockchain solutions may complement, rather than adversely disrupt, the goal to address provenance and resource planning to develop at a regional level, which has not been the focus of Davos.
For example, the Mideast-founded fintech startup, GetReceet, allows small businesses to digitally account for consumer goods and services. Now, GetReceet has aggregated big data regarding purchases ranging from food to professional services to facilitate more informed infrastructural planning at the state level that is more timely than census data. GetReceet’s founder, Omar Barkawi, imagines how blockchain solutions could advance “provenance” goals on a macro-level. Barkawi notes how tracking money and transactions would benefit from blockchain solutions, “tracking food purchase receipts informs health departments without household data identifiers”. Meanwhile, GetReceet’s funder, the Mideast-based Ibtikar Fund, notes how the money movement, financial services, and authentic property documentation remain a challenge, according to the Fund’s COO, Ambar Amleh, who highlighted the “physical stress of carrying and transferring all this cash” between Ramallah and Amman, for example.
GetReceet’s success resulted in an invitation to the United Arab Emirates to review blockchain solution potential. It is no surprise given that this smaller MENA country has a population of 9.68 million situated at a high intersection of trade. Smaller countries with strong infrastructure serve as the ideal testing ground to roll out technology solutions and build to scale quickly; thus, reaching critical mass is easier. As a result, such inputs could inform state investments to promote regional development. Meanwhile, forward-thinking companies also recognize that emerging markets need a network of logistics infrastructure to drive intra-continental trade to produce spill-over effects that will grow frontier markets as tracked by the MSCI Index.
Techsoup, a digital nonprofit research organization, is exploring blockchain solutions beyond the finance sector since they have been approached by philanthropic groups. According to TechSoup’s Vice President of Alliances and Program Development, Chris Worman, “TechSoup has been looking at DLTs (distributed ledger technologies) on a variety of fronts– including work on smart contracting across all of the multiple account reconciliations we have to complete each day, to DLT underpinning organizational identities in our database.” Essentially, blockchain solutions, like DLT promote self-governed and self-policed systems–as in the case of smart contracts.
Troubleshooting Challenges Via Blockchain Solutions
Blockchain solutions can facilitate corporate social responsibility (CSR) claims too. Watchdog stakeholders hold companies accountable to their CSR goals. For example, CorpsWatch serves as a multi-faceted and interconnected watchdog group tracking gender and labor rights as well as environmental concerns. Given CorpsWatch’s intersectional scope, they must track a variety of data sources. Obtaining real-time data quickly adds to the complexity of holding corporations accountable across horizontal and vertical supply chains.
Similarly, the Workers Rights Consortium serves as a global watchdog over labor rights and checking if corporations employ sweatshop labor. Manufacturing giants, like Nike, increase their transparency efforts when faced with watchdog pressure regarding global business practices. Nike publicizes the factories that produce its clothes whereas H & M and Zara draw criticism for specific claims about how their supply chains categorically meet sustainability goals. Thus, watchdog groups and investigative journalists ask for more information to validate corporate claims–but through what mechanism?
Watchdog missions rely on information exchange and transparency, which operate as the incentive to push for blockchain solution adoption tailored for the issues they are tracking. By employing blockchain solutions, one could argue that we increase inclusivity and allow more participation by expanding the number comprising the watchdog collective. As such, increased watchdog participation promotes the check and balance of the 150 leading corporations to collaborate on how to solve the world’s urgent challenges across food, energy, mobility, and production. Digitizing the collective watchdog place means that the role of watchdog is not a singular unit since they operate as members within the value chain.
The watchdog stakeholders can maximize their role in holding corporations accountable. Their role in monitoring issues with digitized, real-time data is their incentive to mainstream the blockchain solutions technology and push for adoption. Watchdogs invest the time and advocate per their focused issue while the private sector invests in the infrastructure to adopt. Both stakeholder groups will push for accelerating systems transformation while evaluating the value chains in line with World Business Council on Sustainable Development’s Vision 2050 agenda. With topics covering the food and manufacturing sectors, like “Investing in food systems transformation on the road to the 2021 Food Systems Summit”, “The Race to Zero: Eliminating Auto Industry Emissions Across the Value Chain”, and “Healthy People & Healthy Planet: the protein revolution from fork to farm” social and environmental responsibility marry corporations’ interests to their global customers’ interests.
Last month, the IBM Blockchain Pulse blog covered how blockchain solutions facilitate shipping and account for claims of fresh seafood sold at premium prices. As a digital leader in tracking the food sector, IBM complements the mission behind food sustainability watchdog groups, like the Sustainable Food Group & OSI Group.
Implications & Conclusions
Essentially, Davos possesses the power to facilitate companies coming together to provide transparency and speak to their 2050 Vision. As in the case of the blockchain solution potential, the goal for discussion at Davos is to mainstream a transformative concept and evolve it into a solution. The goal to mainstream blockchain solutions discussions increases quicker adoption. As in the UAE example above, their public-private effort to engage in discussion now frontends their agenda to explore potential infrastructural expansion. Moreover, public platforms employing blockchain solutions provide authenticity and the “proof” that watchdog groups and global consumers expect when corporations advance CSR claims. Blockchain allows watchdog groups to hold companies accountable to their CSR claims and goals. For global consumers, blockchain solutions facilitate more information flow to inform better infrastructural development.