Four Fundamentals to Address Sustainable Development Goals with Blockchain

Blockchain technology is being rolled out across a multitude of areas relevant to the United Nations Sustainable Development Goals (SDGs), from eradication of hunger to digital identity to climate change. It is widely recognised that there is a profound role that blockchain can play to support the SDGs in addressing social and economic challenges. However, to scale projects to a level that would progress the UN SDG’s quickly, we believe there are four fundamental issues that must be addressed.

1. Challenge First Approach

We believe that to create long-lasting impact, projects must first engage with multiple stakeholders to understand the specific issues to have ‘a challenge first approach’ rather than a technology-first approach.

State-level and international policy networks can benefit greatly from the agility of the enterprise blockchain sector. In order to spur innovation and mobilise collaboration, the current discourse must be turned on its head. Instead of asking the industry ‘tell us how blockchain could be used to help us achieve SDG’s?’, the conversation should centre around development actors sharing their specific challenges as they relate to trust, transparency, security and multiparty collaboration. This way the blockchain industry can develop solutions specifically designed to resolve such challenges.

Last week in Geneva, we witnessed constructive exchange at the Blockchain 4 Impact Event, hosted by a Geneva Macro Labs and the Joint Inspection Unit of the United Nations System, with the support of JustJobs Network and the Swiss Finance and Technology Association (SFTA) and Diginex. Issues addressed included modern slavery, financial inequality and voting to name a few.

At the same time at the 74th Session of the United Nations General Assembly in New York, we saw proposals to address specific SDGs generated via Hackathons, such as the ‘Scaling Impact for the SDGs Hackathon’ organised by the Global Blockchain Business Council, Blockchain for Social Impact, New York City Blockchain Center, and New York City Economic Development Corporation.

We are starting to see several small-scale implementations of SDGs being addressed through blockchain applications. The next step is to align the incentives of the parties involved to ensure these projects can scale

2. Incentive Alignment

When we talk about incentive alignment, this means working with partners who have a stake in the project’s key issues. We believe it is crucial to find these partners as they will help to support the project not just from pilot but right through to widescale implementation. In tackling SDG challenges, these partners could include super-governmental working groups, policymakers, private enterprise, academia, lawyers, diverse investor sets, and of course the United Nations.

CASE STUDY: Addressing Sustainable Development Goal 8.7: eMin – blockchain-enabled app to eradicate modern slavery

eMin is a blockchain-based app designed to protect migrant workers, reduce exploitation and increase supply chain transparency. It enhances trust, transparency and security in the worker recruitment process by storing an immutable copy of employment contracts on the Ethereum blockchain.

eMin was developed as part of a partnership between Diginex, and anti-slavery NGO the Mekong Club.  The app was originally inspired by the members of the Mekong Club’s working groups, which includes 38 large multi-national corporations. These companies are tasked with ensuring that there are no labour violations within their supply chains but lack the infrastructure to administer this.

The retail and garment/footwear working groups participated actively in the development of eMin, making recommendations of how the app could be designed and implemented for the best results.

3. People-Centric Solutions

As social consciousness increases in its recognition of an individual’s right to data sovereignty, projects must also consider and address issues pertaining to data access, privacy and protections.

This is particularly apt in the case of blockchain solutions for digital identity (UN SDG 16.9), as ID systems could fall prey to misuse and present a threat to privacy rights among participants, because of the high levels of personal data they handle.

In the case of eMin, we register a “hash[i]” of all the “transactions” carried out on our eMin platform. This means that personal data of workers is never stored in clear text on a blockchain.  Nevertheless, we have decided to treat the hashes produced through our eMin app as personal data once it refers to actual personal data uploaded by the workers.

Ultimately, blockchain solutions delivered to vulnerable populations should remain people-centric even as they scale, offering individuals control and ownership over their own data. We believe that continued multi-stakeholder dialogue will be central to clarifying regulatory implications regarding data security and privacy.

4. Making Solutions Sustainable

For solutions to make a long-term impact, they must be envisaged from the outset with sustainability and scalability in mind. Projects must be able to articulate what this looks like from a cost/benefit perspective in order to secure finance.

We see a rise in the popularity of blended finance in the impact investing space, which is an ideal match here. Blended finance is a structuring approach that allows organisations with different objectives to invest alongside each other while achieving their own objectives (whether financial return, social impact, or a blend of both)[ii].

In order to develop proof of concepts for SDGs-focused solutions through to full-scale implementation, public and philanthropic funding is crucial. This offers future investors both a vote of confidence in the efficacy of the solution, enticing further investment interest to scale projects and ensures the project progresses past the pilot stage.

The Way Forward

In order to accelerate progress towards the SDGs, long-term partnerships with trusted blockchain solutions providers, super-governmental working groups, policymakers, private enterprise, academia, lawyers, diverse investor sets, and the United Nations are required. Partnerships that span proof of concept to implementation, will enable the projects to scale, but also to collect and share the necessary evidence and learning with the broader ecosystem.

We have seen this fundamental approach to blockchain projects work to great effect with eMin. In early 2019, the eMin team joined forces with data analytics platform Verifik8 to pilot the app in Thailand. The pilot, which was funded in part by the British Embassy in Bangkok, took eMin into the field to be tested by agriculture workers. Subsequently, eMin is now being scaled across different industries and countries. This cooperation between a governmental body, an NGO and private sector players exemplifies how a purpose-driven blockchain project can galvanise the capabilities of multiple players, supporting a project to pilot and prime it for scalability.

When challenges are shared and incentives are aligned between public and private actors, the agility of the blockchain industry can be fully harnessed and remarkable sustainable innovations can be created.

Author:
Jessica Camus is Head of Partnerships and Impact at Diginex.

[i] consisting of generating a code of a fixed length for a given piece of digital information, regardless of its length.

[ii] Source: Convergence (link)