- 33% of stakeholders planning blockchain for ethical sourcing
- Blockchains can be expensive to deploy
Volvo Car has entered into an agreement with CATL and LG Chem to implement traceability of its cobalt after a successful blockchain pilot.
Cobalt producers Glencore and ERG have also launched a blockchain initiative with the World Economic Forum to improve cobalt traceability. In battery and vehicle production, Ford Motor, Huayou Cobalt, IBM and LG Chem have launched a pilot platform to address concerns in strategic mineral supply chains.
Some 33% of the 21 companies assessed by BloombergNEF have implemented pilot blockchain initiatives to drive transparency in ethical supply chain tracking and to complement their existing due diligence efforts.
Blockchain can improve transparency and data accessibility, whereas poor due diligence or bad data collection will lead to unreliable results. However, blockchains cost a lot to deploy and there is inadequate deployment infrastructure at a local level. Other weaknesses identified by BNEF include a disconnect between upstream and downstream incentives and poor institutional capacity.
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