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International accounting firm KPMG has unveiled its blockchain-based Climate Accounting Infrastructure (CAI) solution to help organizations measure, report and offset their greenhouse gas emissions.
CAI uses blockchain to securely store environmental data in a financial system as part of organizations’ climate risk assessments and asset assessments. It aims to help companies achieve environmental, social and corporate governance (ESG) objectives.
The solution integrates an organization’s existing systems, including IoT sensors, with external data sources to establish a verifiable trace of emissions and offsets recorded on the blockchain.
The accounting giant has partnered with data sourcing and tracking providers Context Labs and Prescriptive Data and blockchain company Allinfra on the product. Context Labs enriches the emissions data provided by organizations with an environmental context, before recording and certifying environmental, operational and financial information.
According to Arun Ghosh, US blockchain leader at KPMG, the use of blockchain means that data reports will be disclosed transparently and reliably in order to “meet stakeholder expectations and comply with emerging regulations.”
“As investors broaden their focus beyond financial factors to include ESG practices, organizations are stepping up efforts to reduce their carbon footprint, along with transparent disclosure of progress.”
Organizations will also be able to model the impact of climate risks on business operations and financial performance through real-time environmental data and advanced analytics.
Earlier this year, KPMG predicted that blockchain, along with the Internet-of-Things (IoT), would drive the development of climate change solutions around the world.
Other large companies are also exploring how blockchain can improve the reporting capabilities of solutions that track greenhouse gas emissions. Earlier this year, Mercedes-Benz partnered with blockchain startup Circulor to track CO2 emissions. Volvo also partnered with the startup to develop its own project, addressing the same problem.
Carbonblock has also developed a solution to increase the transparency of climate-related factors in the Porsche supply chain.
