08 Sep INATBA Publishes Report on Blockchain for Social Impact
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INATBA is the global convener of the blockchain ecosystem, with 170+ members dedicated to promoting global adoption of blockchain and DLT technologies by bridging the gap between policymakers and industry stakeholders for mutually beneficial conversations. INATBA has 15 different Working Groups and Committees, each one concentrated on a specific sector of the blockchain industry including healthcare, climate action, finance and more. One of these Working Groups is the Social Impact Working Group (SIWG), focused on leveraging member expertise to highlight the potential of blockchain/DLT to tackle social issues such as climate change, poverty, inequality, food waste, corruption and other areas covered by the UN Sustainable Development Goals (SDGs).
A core activity of the Working Group has been to map the blockchain ecosystem in the use of blockchain for social purposes. Through this mapping effort, the SIWG identified more than 300 initiatives using blockchain technologies to create social impact. These included:
- A digital economy platform enabling refugees to actively build their identity and skills
- A platform setting up local energy markets
- A solution empowering cocoa farmers to pursue entrepreneurship
- A start-up tracking responsible minerals and raw materials in order to avoid illicit practices
- A sustainable market mechanism for aquaculture based on Algae.
The far-reaching potential of blockchain technology to impact society is widely recognised. In a study published in June 2021, the European Investment Bank (EIB) pointed out that Artificial Intelligence (AI) and blockchain are technologies capable of creating “new pathways for our growth, driving technological solutions to make our societies truly digital and greener, and ultimately keep the planet habitable.” The EIB highlighted the potential of blockchain to “not only disrupt the financial system, but also help us track and report greenhouse gas emissions better, optimise commercial transport and create genuine data privacy protection.” In May 2021, The UN Commission on Science and Technology for Development concluded that “Blockchain technology is potentially a key technology in a new technological paradigm of increasing automation and integration of physical and virtual worlds, together with technologies such as artificial intelligence, robotics and gene editing”. Its report: Harnessing blockchain for sustainable development: prospects and challenges is a landmark document of the UN system.
However, as a part of a relatively new industry field, projects using blockchain/DLT face many challenges that impede the scalability and the reach of the impact.
Social Impact Working Group Co-Chair Joerg Walden noted, “For a more sustainable world for future generations we need a massive change in mindset and transparency – these changes can only be realized with strong global partnerships and cooperation and a full trust in data. The same is true for blockchain and DLT – which are clearly collaborative technologies. This report shows that we need the collaboration, full support and openness of all actors if we are to realize SDGs with the help of powerful tools and technologies such as DLT.”
The SIWG conducted a survey entitled “Blockchain for social impact” to analyse the use cases of blockchain/DLT projects tackling societal issues in order to better understand their objectives, challenges, and potential impact. Representatives from approximately 70 projects participated in the survey, demonstrating the following key findings:
- SDGs were considered during the development of several projects, and most projects measure their impact on the SDGs. Therefore, there is a high level of engagement with SDGs among blockchain projects.
- 76.79% of the respondents mentioned facing challenges regarding standardisation and interoperability. Other challenges mentioned included access to funds and the collaboration between institutions and projects.
- The respondents of the survey expressed the need for a global audit/standard for the blockchain community, as well as for more education and research on blockchain technology.
Social Impact Working Group Co-Chair Mariana de la Roche noted, “The potential impact of blockchains and other DLT’s is immense. Distributed ledger technology can help overcome some of the most pressing topics of our time, including climate change, forced labor and human trafficking, poverty, inequality, food waste, fraud, corruption, and other challenges. However, interoperability and cooperation among technologies – and their actions – will be necessary to create a real and feasible impact. Our mission in the Social Impact Working Group (SIWG) involves not only mapping the DLT ecosystem working in social impact, but also building the tools to generate alignment among the different DLT projects, in order to scale their potential in achieving the Sustainable Development Goals (SDG).”
The SIWG compiled a report with findings of the survey. These results were also discussed with expert members of INATBA in a roundtable seminar with the purpose of identifying the role that INATBA could play in addressing the challenges highlighted by the respondents of the survey. The main focus of the conversation was on the lack of standards in the blockchain community for measuring impact. As there is no unified framework among blockchain/DLT organisations and projects to measure impact, the SIWG agreed to this through an initiative that will result in developing a framework to measure the impact of blockchain/DLT projects.
“Social impact” as a value-based call for action, is meaningful and relevant when addressing prioritized social needs at global, regional or community levels. COVID-19 presents a challenge and an opportunity for blockchain solutions. The survey and the report include illuminating minimal data on this issue.
As a next step, the SIWG intends to align with relevant partners for this initiative, such as organisations engaged with social impact standards and academic institutions in order to map similar existing global standard initiatives. Upon consulting experts on specific criteria used to measure social impact, the objective is to interconnect the different criteria in order to develop a holistic way to measure social impact.
In regard to the SDGs, the SIWG has noted a lack of connection between the different SDGs in the KPIs and criteria used to measure social impact. The KPIs and criteria of the SDG framework tend to focus on one particular SDG without taking the others into account for a more comprehensive evaluation. For example, the KPIs and criteria listed under SDG 13, Climate Action, only take the impact on SDG 13 into account, with no consideration of the impact that other actions for different SDGs can have on climate change. The SIWG suggests developing a framework with KPIs and criteria that, in keeping the SDG 13 as an example, would also consider the impact of the actions regarding food security and sustainable agriculture that are part of SDG 2, Zero Poverty. Consequently, a social impact assessment that uses KPIs and criteria that focus solely on one SDG, thus disregarding others that are closely connected, fails to convey the holistic societal impact.
INATBA Executive Director Marc Taverner noted, “As the report conducted by the SIWG shows, blockchain for social impact offers numerous exciting applications that have the possibility to make a meaningful difference in society. INATBA is proud to lead the development of a framework to measure impact for these projects, helping contribute toward a more interoperable and impactful ecosystem.”
A framework that connects several aspects of social impact will not only provide a more realistic view of the impact generated and facilitate the process of determining whether a project has a desirable social impact or not, but also foster the recognition of initiatives addressing social issues through blockchain/DLT applications. Moreover, having a global standard framework and a defined mutual understanding in the blockchain community will facilitate interoperability between different projects, enhancing cooperation to jointly act on pressing societal issues.
On the other hand, the European Investment Bank recently published a study expressing concerns regarding the low European investment in AI and DLT compared to their American and Chinese counterparts. The study suggests that this shortfall largely depends on the lack of venture capitalists investing in European tech companies. On this account, a framework for social impact could make blockchain projects more attractive for investment and also address the challenge of access to funds which was another important challenge highlighted by the respondents in the survey.
Moving forward, the SIWG will be prioritising development of the framework that will be produced in collaboration with the other INATBA working groups, INATBA community and external relevant partners as their core activity.
Report co-authors: Mariana de la Roche Wills and Åsa Dahlborn (IOTA Foundation), Joerg Walden and Maroje Marinkovic (iPoint-Systems), Khalid Belghiti (Scrypt Media), Ismael Arribas (KUNFUD) and Dr. Inon Schenker (IMPACT- Jerusalem).
Access the full report here: