Sainsbury's and Unilever sign up to blockchain trials for supply chain practices

Global brands Unilever and Sainsbury's have partnered with leading investors to trial how blockchain technology can financially reward sustainable farming practices for Malawian tea makers.

The trial could reach more than 10,000 Malawian tea farmers and if successful, could benefit 1.5 billion families that depend on small-scale farming across the globe

The trial could reach more than 10,000 Malawian tea farmers and if successful, could benefit 1.5 billion families that depend on small-scale farming across the globe

Sainsbury’s and Unilever have partnered with banking firms Barclays, BNP Paribas and Standard Chartered to trial a blockchain system that records price, produce and production information on tea farmers in Malawi. It is hoped the technology can be used reward and incentivise farmers, by offering preferential terms or access to credit to farmers that are implementing sustainable practices.

“This technology has the real potential to help banks access more detailed and more reliable information about social and environmental impacts in a secure way, throughout the entire supply chain,” BNP Paribas’ head of trade finance competence Marguerite Burghardt said.

“This will enable financial institutions to broaden the scope of their financing offers and to propose financial incentives to their customer clients, based on their environmental and social standards.”

The banks and companies have provided more than £600,000 alongside support from the Department for International Development (DFID) to test the blockchain technology, which has been developed by Provenance and Halotrade. Two other start-ups, Landmapp and FOCEFET Foundation, will ensure that land rights documentation and open-source data standards are included in the trials.

Chain reaction

Blockchain technology acts as a digital ledger, creating a verifiable and transparent audit trail that can be used for any transaction. The three banks involved in the project will examine what sustainability data - that they can’t access through existing systems - can be captured through the technology.

The banks will use this information, alongside transactions on packaging and wood fibre sourcing, to offer preferential terms to well-performing farmers in agreement with Sainsbury’s, Unilever and wood fibre products company Sappi.

The trial could reach more than 10,000 Malawian tea farmers and if successful, could benefit 1.5 billion families that depend on small-scale farming across the globe.

It is hoped the trials, which will test the commercial viability of the platform, will also create better banking oversight on issues such as compliance with the Modern Slavery Act.

The project was unveiled this week at the One Planet Summit by the University of Cambridge Institute for Sustainability Leadership (CISL).

“The majority of global efforts to align the financial system with the delivery of the Paris Agreement are blind to one of the most far-reaching trends in finance today, namely how technology-driven innovations are fundamentally changing the provision of financial services,” CISL’s director of sustainable finance Andrew Voysey said.

“If we’re not careful, we will produce new policies and practices fit only for the ‘old’ financial system. But by designing innovative collaboration between multi-nationals, financial institutions and fintech firms, we can harness fintech to deliver valuable new data about sustainability performance to financial institutions, which is key to greening financial flows.”

Blockchain uses

Earlier this year, major firms including Nestlé, Unilever and Walmart established a collaboration with tech giant IBM to explore how the global food supply chain can benefit from blockchain technology.

IBM claims the new joint programme could enable all participants in the supply chain, including growers, suppliers, retailers and consumers, to quickly trace a contaminated product to its source and stem the spread of illnesses. It is estimated that 400,000 people die each year due to contaminated food.

Elsewhere, a blockchain technology start-up launched an initiative for companies and families to calculate and offset annual "plastic footprints" by purchasing credits that support global projects that tackle plastic pollution.

Matt Mace


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| Data | investors | supply chain | technology | unilever | sainsburys

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