United Nations Secretary-General Antonio Guterres estimates that it will take trillions of dollars a year to meet the 2030 Sustainable Development Goals. The question is: “Where did it come from?” Official development assistance, philanthropy and public finances are insufficient, which means that private capital must be targeted to finance sustainable development projects.
However, the gap between financing and environmental impact has not boosted the confidence of private investors in financing development projects. India is a hub of sustainable development risks and innovative interventions, providing an example of this gap. From 2014 to 2015 to 2018 to 2019, the average corporate social responsibility (CSR) growth rate of nearly 1,100 Indian listed companies was 16%, while India’s score in the index of UNDP’s human development has increased by nearly 1%. Annual growth rate or CAGR. The irony is that most of the corporate social responsibility spending in India is spent on education and health, which are at the center of the HDI index.
The era of blockchain technology
Can blockchain technology be a viable solution? This happens because development projects are measured, reported, verified or measured, reported and verified, and they measure the results and impact of the project. Most readers realize that distributed ledger technology stores data sets in blocks on the network and requires independent verification from network users in order to make records transparent, secure, verifiable and immutable. These functions are the same as those of the blockchain which can improve measurement, reporting and verification processes, thus improving data auditing and reducing false positives / data fraud. This may encourage your capital to consider investing in this area.
Additionally, if we need to define the exact activities of a typical development project that can use blockchain technology, it will collect project-level data and time stamp it for tracking. The challenge lies in many development projects that are under-resourced, especially in developing countries. These projects still require manual data collection in the field, which can lead to inaccuracies, errors and fraud. With the help of blockchain, this data can be collected and reported in a secure, transparent and verifiable manner.
It will also have a negative impact on the fact that national institutions in developing countries that implement such projects often do not have a system to ensure the verification of the reported data. The laws and regulations in these countries are weak and it is difficult to hold these national institutions to account. Coupled with the distance between foreign investors and these local projects, it is difficult to maintain the same level.
Blockchain can reduce the data risk of local businesses, improve the efficiency of their reporting and influence data, and inspire the confidence of foreign donors / investors to fund such development projects.
Blockchain and MRV operations
This means that more capital flows can be pledged locally. In 2017, the International Institute for Environment and Development estimated that only 10% of the $ 60 billion in public and private climate finance went directly to the local level, in part due to perceived risks associated with it. to data. Using blockchain to improve measurement, reporting, and verification can help local businesses access more funds.
With the help of blockchain, local businesses can report verifiable performance in their assessment, reporting and verification processes, allowing local development agencies to leverage more funds. The Amazon region of Brazil is one example. The Rainforest Project uses blockchain and the Internet of Things to record and transmit environmental impact data from electricity meters, robotic devices, and emission monitors. The remote sensing satellite independently inspects the status of the patch and, in accordance with the smart blockchain contract, rewards farmers who maintain their rainforest patch. Outcome data can be verified, middlemen can be excluded, and the transfer of incentives can reduce management costs and withdrawals.
The activation of the measurement, reporting and verification (MRV) process of the