International accounting firm KPMG unveiled a blockchain-based Climate Accounting Infrastructure (CAI) solution that helps organizations measure, report, and offset greenhouse gas emissions.
CAI uses the blockchain to securely store environmental data in the financial system as part of assessing a company’s climate and asset risk. The goal is to help companies achieve their environmental, social, and corporate governance (ESG) goals.
The solution combines existing systems of the enterprise, including Internet of Things sensors, and external data sources to create a verifiable pathway for the deviations and movements recorded on the blockchain.
The accounting giant has teamed up with data source suppliers and tracks Context Lab, Prescriptive Data, and blockchain product, Allinfra. The context parameter enriches the emissions data provided by organizations with an environmental context for recording and approving environmental, operational and financial information.
According to US blockchain leader Arun Ghosh of KPMG, the use of the blockchain means that data reports will be disclosed in a transparent and reliable way “to meet stakeholder expectations and comply with new regulations.”
“As investors expand their focus not only on economic factors but also on ESG practices, institutions will intensify their efforts to reduce their carbon footprint along with transparent progress reports.”
Organizations will also be able to model the impact of climate risk on business operations and financial outcomes using real-time environmental data and advanced analysis.
Earlier this year, KPMG predicted that blockchain technology combined with the Internet of Things (IoT) will lead to the development of climate change solutions around the world.
Other large companies are also exploring how the blockchain can improve the reporting functionality of solutions that track greenhouse gas emissions. Earlier this year, Mercedes-Benz entered into a partnership with Startup Circulor to track carbon dioxide emissions. Volvo has also partnered with a startup to develop its own project and solve the same problem.
Carbonblock has also developed a solution to improve the transparency of climate-related factors in the Porsche supply chain.