As the post-coronavirus world develops a greater awareness of global supply chains, we talk to Leanne Kemp, the CEO and founder of Everledger who has made it her mission to increase transparency and trust within global markets.
Aside from Everledger, a company that uses blockchain technology to create digital records that track the supply chain of luxury goods like gemstones and fine wine, Kemp is a leader in the blockchain space in myriad other ways. She co-chairs the World Economic Forum’s Global Future Council on the Future of Manufacturing. She also was recently appointed to Global Blockchain Business Council as a Regional Ambassador of Australia, one of the most crypto-friendly countries in the world.
Kemp recently sat for a Q&A with Forkast.News to discuss the future of blockchain, the work that needs to be done to make the world a more sustainable place, and how a company’s environmental footprint goes a long way in its relationship with its customers. She also explains how blockchain not only helps guarantee product authenticity but also promotes ethical labor practices, with Everledger’s work in Tanzania to track gemstones “from mine to finger” as an example.
The following Forkast.News interview with Kemp has been edited and condensed.
With your recent appointment to the Global Blockchain Business Council, how do you feel about using the organization’s resources to further blockchain education, innovation and development in Australia?
Despite its modest population, Australia is home to a number of world-first blockchain applications, and the country has huge potential to benefit from innovations in the blockchain space. Combining blockchain technology with other technologies can add economic value to a range of business sectors. Australia can contribute to an estimated global annual business value of over US$175 billion by 2025 generated by blockchain as it has a real treasure trove of natural resources that need to be tracked, protected, and harvested sustainably.
Unlocking Australia’s potential and implementing practical applications of blockchain requires buy-in from multiple stakeholders all working together across the globe. It is not something that can happen in a vacuum. Large and small private sector corporations at all the different points of the supply chain, and a plethora of different public sector bodies including regulators, international organisations like the WEF (World Economic Forum) or the OECD, and NGOs will require coordination and involvement. The Global Blockchain Business Council has a unique position of being able to galvanise co-operation between stakeholders of all these bodies globally.
In what ways do you think greater investment by developing countries in blockchain can be helpful to their export markets?
Today’s brands are faced with unprecedented pressure from consumers to be perceived as more ethical and responsible, and to show the provenance of products from production to consumer. And as today’s socially conscious and progressive millennial audiences are particularly interested in ensuring they purchase from brands with ethical supply chains — there is more of a commercial incentive to do so than ever before. The environmental footprint of brands has quickly become a source of competitive advantage. Therefore, companies operating in developing countries can provide verifiable tracking data that they’re manufacturing products or mining goods in an ethical way, by monitoring raw materials usage, waste and water management and proper use of chemicals. It will be more likely for them to see greater investment and business as result of their commitment to sustainability.
How can large multinational corporations tackle issues like waste and accountability among small producers in their supply chain? Can blockchain help bring production and efficiency to developing countries?
Multinationals need to establish several key elements if they want to be able to tackle the mounting issues of accountability in supply chains: a version of the truth that everyone can agree on, the ability to bring together a consensus between different stakeholders, and the security only an unalterable record can provide. Blockchain technology, when coupled with other technologies, provides all of these things, which is why it will be a key factor in allowing multinational corporations to effectively clean up their supply chains.
Is it possible to achieve supply-chain transparency on an international scale? What are the obstacles to this, and what can be done to resolve them?
Continued investment on an international scale in technologies such as blockchain will be essential for their potential to be fully realized. One of the challenges will be bringing on board governments, regulators, enterprises, lawmakers, academia and not-for-profits.
For example, national states can integrate these technologies into their economic framework to develop new business models that address waste, as we have been piloting with the U.S. Department of Energy, around the life cycle of lithium-on batteries for electric cars and portable electronics. Similarly, regulators can stop treating waste as an environmental safety hazard and instead see it as a source of valuable materials and products. That’s what I call “urban mining” — basically, the transformation of industries that traditionally relied on natural mining with extreme consequences for the land and populations, to a new circular economy mindset that is focused on re-commerce.
Administrative and legal barriers to redesign, recover, reuse and trading can be eased, meaning components can be upcycled or remanufactured. All of which won’t be possible unless we have transparency across supply chains, thus more importance will be placed on technologies such as blockchain and IoT (internet of things).
How can blockchain promote sustainability and ethical labor practices?
One example we can give you is our work with Moyo Gemstones. The coloured gemstones industry is overwhelmingly dominated by small, artisanal producers, often using limited technology. Though their work represents an integral part of the economic footprint of many developing nations across the world, it can be challenging tracking the ethics and sustainability of the production of these stones effectively.
Tanzania is blessed with significant reserves of diamonds and colored gemstones, making Arusha a vital trading hub in the region. However, the spoils of these rich natural reserves have not been shared equally. Inhospitable working conditions, sustainability issues, and unfair prices still abound. The female population is at particular disadvantage there, with limited access to other employment or economic security.
In an attempt to remedy these issues, Everledger forms part of Moyo Gemstones, an ethical gemstone collaboration born in Tanzania, in collaboration with Pact (Pact Mines to Markets program, or PactM2M), as well as ANZA Gems and Nineteen48.
Under the banner of Moyo Gemstones, our partner PactM2M works closely with the Tanzanian Women Miners Association (TAWOMA), to confirm that only responsible, sustainable and legal mining practices are being utilized. Moyo Gemstones employs our blockchain solution for coloured gemstones to record the footsteps of gemstones sourced by mainly female miners in TAWOMA.
By enabling gemstones sourced in TAWOMA to be tracked all the way from mine to finger, our solution provides an unalterable record of the gemstones journey, how it has been processed, and the legacy it leaves behind. It increases transparency throughout the supply chain, limiting negative environmental impact and empowering the female miners in TAWOMA to work safely, mine better and improve financial security.
Could you elaborate on the “Blockchain Bill of Rights” that you helped create with WEF’s Global Future Council on Blockchain and what challenges remain in seeing this come to fruition?
We felt that strong ethical principles need to be incorporated from the ground up on any blockchain infrastructure that might arise, rather than simply incorporated later as an afterthought. We knew that some of the problems of blockchain implementation which we had seen in the past could have been prevented by introducing a “bill of rights” style document. The founding members felt very strongly that inconsequential decisions could have resounding effects later, such as what can be seen in terms of the effects of social media data harvesting by big tech organizations.
Named the Presidio Principles, they are divided into four groups:
1. Transparency and Accessibility: the right to information about the system
2. Agency and Interoperability: The right for participants to own and manage their data
3. Privacy and Security: The right to data protection
4. Accountability and Governance: The right for participants to understand available recourse.
Everledger is not the only major player to get involved, with Accenture, Deloitte, Hyperledger, ConsenSys also having thrown their hats into the ring.
What industries do you think blockchain technology could be most useful in? Are there industries that you believe may be ripe for blockchain-fueled growth?
We at Everledger look to actively select important, difficult, emerging problems where establishing provenance can prove useful. We started with diamonds, and made an obvious transition into gemstones. Both industries have historically been plagued with unethical and unsustainable practices that have serious consequences for stakeholders throughout the supply chain. Wine and spirits, insurance and luxury and apparel followed on quite naturally.
We believe that the next most potentially conflicted supply chain will be rare earths and electric vehicle batteries, so that’s where we’re moving into now. Electric vehicle (EV) batteries rely on minerals such as cobalt and lithium. The mining of both is plagued with environmental problems and health risks to workers.
Currently, there simply isn’t the scaled infrastructure in place to deal with the 11 million tons of spent lithium-ion batteries that will be in the ecosystem by 2030, so we’re helping organizations such as Ford and the U.S. Department of Energy to trace and maximize the life cycle value of products such EV batteries. Using our symphony of technologies, organizations can monitor the journey of these products and their component minerals throughout their entire life cycle in real time. This represents an important part of a move towards a circular economy, which represents an alternative to the old take, make and dispose model that is reliant on the constant, ongoing extraction of finite virgin raw materials.
We strongly believe that if batteries are sourced, manufactured and recycled responsibly, electric vehicle batteries can fuel sustainable development.
Could blockchain information be misused by governments or third parties? How does Everledger ensure privacy and security of the information gathered?
All our technology meets the certification to the ISO 27001 standard, which defines the most secure approaches for managing and protecting sensitive data. Everledger is part of an elite group, less than 2% of all registered companies worldwide, who can say their practices, policies and procedures are all compliant with this global benchmark for information security.