Traceability is key to heavy industry decarbonizing
By Juan Miguel Perez, CEO and Co-Founder
Juan Miguel Perez, CEO and Co-Founder, Finboot, writes: Heavy or capital-intensive industries, like steel, cement, oil and gas, and chemical manufacturing firms, are keen to decarbonize and move to net zero in line with the rest of the economy. It is the right thing to do and customers are demanding it. The traceability of raw materials is a key challenge to this sector. Capital-intensive industries are vital to the production of new tech and renewable energy infrastructure.
When speaking to current and potential customers in this sector, Finboot, found heavy industries are facing increasing requirements to demonstrate to their customers, regulators and other stakeholders their finished products can be traced back to their constituent raw materials to show ethical and sustainable supply chains – as well as a trend to increase recycled feedstocks and circularity.
The U.S. based International Data Corporation forecasts global spending on digital solutions to increase sustainability, plus accelerate and streamline business processes, will reach USD$3.4 trillion in 2026, with around 30 percent coming from manufacturing industries.
Businesses, particularly the hard to decarbonize capital intensive industries like steel, cement, oil and gas and chemical manufacturers, tell us they are under huge pressure for new scalable, end-to-end digital solutions to trace renewable and recycled material flows, providing transparency at every stage of their long and multi-nodal value chains. We are already working with industry leaders like Repsol and SABIC, helping them substantiate their sustainability credentials on their road to net zero.
Marko Kovacevic, Managing Director, of Digital Supply Chain Institute (DSCI) stated: “Post COVID, and arguably during and before, customer behavior has shifted significantly. Business customers, end consumers and indeed investors, shareholders, regulators, and workers are demanding safe, sustainable, fast, transparent, traceable goods and services.”
“At DSCI we are seeing a requirement for business practices that align with personal values – for a more sustainable model. In many countries, reporting ESG is mandatory or likely to become mandatory soon. In the U.S., for example, the Securities and Exchange Commission is considering new rules requiring detailed disclosure of climate-related risks and greenhouse-gas emissions.”
Finboot is a member of DSCI, a non-profit organization that focuses on the exchange of knowledge and learnings with other members.
“The nimbler consumer goods manufacturers have adjusted or are adjusting quickly – but for high capital businesses like energy, steel, cement, and chemicals, it’s not so easy”, added Marko.
Don Tapscott, Executive Chairman and Co-Founder, of Blockchain Research Institute’s book Supply Chain Revolution highlights opportunities for transformation to economies that blockchain can bring. The book calls these opportunities “a USD$50 trillion supply chain industry issue.”
Padman Ramankutty, member of the Finboot board and Chair, CloudPaths commented: “Traceability is absolutely crucial in high capital industries like steel, concrete and petrochemicals that have complex cross-border supply chains.
“According to the G&A Institute in 2021, more than 90 percent of Standard & Poor 500 companies now publish Environmental, Social, and Governance reports in some form, as do around 70 percent of Russell 1,000 companies.
“Digital solutions like blockchain are a key part of the solution for greater transparency and high-quality ESG data. Blockchain platforms offer increased traceability and transparency. They provide a single source of truth.”
Dr Bettina Uhlich, member of the Finboot board and former CIO of German chemicals giant, Evonik remarked: “I know first-hand the chemicals industry wants to do the right thing. It is working hard and investing heavily in making its supply chains both more transparent and with increased traceability.
“Industrial tech, including increased digitalisation is a key answer to the challenge of increased traceability.”