November 4, 2021
The global finance industry is moving to invest in climate change.
A coalition of the world’s largest banks and insurers that collectively control $130 trillion in assets announced yesterday they were committing that capital to hit net zero emissions targets by 2050.
“We now have the essential plumbing in place to move climate change from the fringes to the forefront of finance so that every financial decision takes climate change into account,” Mark Carney, the former head of the Bank of England, who is leading the alliance, said in a statement.
Do we really have the essential *plumbing* in place, though?
How are we going to track the data to determine which companies are reducing emissions?
How are we going to know the truth??
We need trusted, validated, transparent data to do this.
This is what blockchain technology enables.
If you’re in the Commercial Real Estate business and want to prove to the market that your buildings are ESG friendly, how do you do it?
You need trusted, validated, indexed data.
And the powers that be need to be able to see the provenance of that data.
The way to do this is to anchor that building efficiency data to a blockchain.
This is one of the most important use cases (among many) for blockchain technology.
Companies that move to integrate their data systems with blockchain will be able to move on ESG first.
And the carrot dangling on the other side could be a lower cost of capital.
Does this ultimately mean the global finance industry will need to integrate with blockchains in the not too distant future?
Show me the incentives and I’ll show you the outcome.