Allinfra Climate is our sustainability data management software. But why choose blockchain to build a climate tech product?
Prior to founding Allinfra, we identified a number of areas of improvement in the creation and use of environmental financial products (e.g. renewable energy certificates, emission reductions):
A blockchain is essentially a digital ledger – each block of transaction data on this decentralised growing list of records contains information about the block previous to it, thus forming a chain that is resistant to modification. It is secure by design.
This technology is most well-known for cryptocurrencies like Ether or Bitcoin, but this same distributed ledger technology can be used for a host of other applications, particularly where transparent and traceable information is important.
We saw a blockchain-based system as a way of ensuring that data captured from devices and other carbon-relevant sources retained a high degree of provenance. A verifiable and direct methodology for extracting and recording data directly can materially accelerate processes that are often entirely manual and open to human error, only requiring manual inspection where and when necessary. This results in greater predictability, reduced time and cost, and vastly improved verifiability and auditability.
Blockchain technology allows us to construct a cost-efficient scheme able to easily, reliably and permanently link underlying data to a digital environmental financial product, a carbon accounting exercise, a green rating or other products and services. By permanently tying underlying data to environmental claims, you move closer to a more versatile system that doesn’t require trust of third parties, providing far greater optionality to project owners but still allowing for third party collection, reporting and verification where it is necessary or value-added.
A blockchain-based solution encompassing source data and digital products tied to that data makes it easier to track the provenance of a product – where and how it originated, where it was traded and who retired it, thus reducing the chance of multiple claims over the same underlying source data and allowing for easy and efficient audit.
From a product perspective we saw the technology as enabling:
While potentially not the only solution available, we believe that a blockchain-based platform currently provides all stakeholders in the environmental financial product market with greater trust in underlying products, vastly reduced and more predictable time and costs, increased efficiency in allocating value to participating parties, and greater optionality and reporting – ultimately contributing to the acceleration of positive climate action.
Allinfra is building technology solutions to help your organisation achieve ESG goals. Learn more about our sustainability data management software, Allinfra Climate.