Trust and transparency in the net zero economy
28 Apr 2023
Mads Stolberg-Larsen, CEO
By Mads Stolberg-Larsen, co-founder and CEO, ZTLment
Introduction - the need for trust and transparency in the net zero economy
As the world races towards a net zero economy, the importance of trust and transparency cannot be overstated. Yet, despite the many benefits of transitioning to a more sustainable future, the journey towards net zero poses significant challenges when it comes to ensuring that all stakeholders are acting in good faith.
One of the key challenges facing the net zero economy is the risk of fraud. As the transition to a more sustainable future accelerates, there is a growing incentive for businesses to engage in greenwashing, or the practice of making false or misleading claims about their sustainability efforts. This can include everything from exaggerating and double counting the impact of sustainability efforts to outright lying about emissions reduction targets and the amount and quality of carbon credits purchased.
The cost of protecting against fraud and ensuring trust
One of the key costs of ensuring trust is the need for increased transparency and reporting, which can then be verified by others. This can require significant investments in data collection, analysis, and reporting, as well as an often costly need for auditors and accountants to verify the accuracy of this data. These costs can be particularly challenging for smaller businesses and organizations, which may lack the resources and expertise needed to comply with reporting and auditing requirements, but the complexity of large enterprises may also cause significant overheads.
Another cost of ensuring trust is the potential for increased bureaucracy and red tape. As regulations and reporting requirements increase, businesses may find themselves bogged down in paperwork and compliance obligations, which can divert resources and attention away from more strategic activities like talking to customers and building out products and features. Additionally, increased bureaucracy and red tape can be a barrier to entry that stifles innovation and keep small- as well as larger businesses from taking net zero action.
The shortcut to increasing trust - moving real money and real value on blockchain in full regulatory compliance
At ZTLment, we have worked with trust in value chains for years. For example, Harry (our COO) and Jason (CTO) took a supply chain transparency project from idea to production for a large Danish Deloitte before starting on the journey with ZTLment - and I myself led the project, which saw the world’s first euro transactions being settled on permissionless blockchain while working at the procure-to-pay platform, Tradeshift.
This work led us to an insight: there is a trust and transparency shortcut, which can be unlocked by moving both real money and real (tokenized) assets on blockchain. Basically, a verifiable immutable record is established, which allows businesses in net-zero value chains to verifiably prove the transaction history of for example carbon credits or the guarantees of origin. As a customer put it:
“It is the benefits of blockchain without the crypto risk”
Interested in learning more? Check out how we helped Agreena connect real money to tokenized carbon credits.
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