Unilever teams with three banks on blockchain for supply chain

Friday 15 December 2017 10:23 CET | News

Unilever, the British supermarket chain Sainsbury and packaging company Sappi have teamed up with three global financial services companies: BNP Paribas, Barclays and Standard Chartered.

Unilever aims to moving forward with a year-long pilot project that will use blockchain to manage transactions within its tea supply chain. Together with several technology startups, the group will develop a system that will track and verify contracts for farmers in Malawi that supply tea to Unilever and Sainsbury.

According to the group, the initiative could reach up to 10,000 farmers. The idea is to provide preferential pricing for those who are focused on sustainable farming methods designed to increase harvests without using more land. Thats where the banks come in: theyre interested in helping finance farms that have committed to these practices, but it has been difficult to validate which ones truly are following through.

This technology has the potential to help banks access more detailed information about social and environmental impacts throughout the entire supply chain. This will benefit the entire supply chain ecosystem, enabling 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.

Blockchain could play an integral role as an enabler of peer-to-peer trading of electricity across microgrids, as a mechanism for managing renewable energy investments and myriad other applications that point to a decentralized power grid. Just as important, the blockchain is seen as another means of helping improve supply chain transparency.

The system relies on technology from four startups: FOCAFET Foundation, which provides open source product identifier data; Halotrade, working on ways to use blockchain to offer incentives for ethical sourcing; Landmapp, developing a mobile app for land rights documentation; and Provenance, piloting ways of using blockchain for verifying the origin of materials and products across supply chains.

One goal of the pilot project is to study ways that organisations and banks can help scale the Sustainable Development Goals more systematically by better accommodating emerging new financial models, such as mobile banking, that are bubbling up in emerging economies. The project itself had its origins in some research within the University of Cambridge Institute for Sustainability Leadership.

While tea crops are the first focus — Unilever and Sainsburys share some of the same supply chain — the hope is to expand the test into other areas during the second half of the year-long pilot.

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Keywords: Unilever, BNP Paribas, Barclays, pilot project, Standard Chartered, supply chain, emerging markets, sustainability , blockchain, environmental and social standards
Categories: Banking & Fintech | E-invoicing, SCF & E-procurement
Countries: World
This article is part of category

Banking & Fintech