Earlier this week, KPMG announced the launch of a blockchain Climate Accounting Infrastructure (CAI) designed to enable KPMG’s clients to more accurately measure and manage their greenhouse gas emissions. The new blockchain platform addresses the increasing demand for corporations to report sustainability practices and meet environmental, social and corporate governance (ESG) targets.
The solution enables a transparent disclosure to investors of ESG progress and helps to track greenhouse gas emissions. To support reliable and transparent reports of data emissions, “CAI will integrate an organization’s existing systems, including IoT sensors, with external data sources to establish a verifiable trail of emissions and offsets recorded on blockchain”. Other sources of data and analytical models will also be used to draw the effect of climate risks on business operations and financial performance.
KPMG collaborated with Context Labs, Prescriptive Data and Allinfra, for the project. Context Labs is a blockchain firm that provides data provenance, confirming from where the information came. Prescriptive Data has a software solution that tracks building operations, including power consumption and emissions using IoT devices. We’ve previously written about Allinfra, a blockchain firm that aims to tokenize infrastructure and environmental assets. Apart from tokenizing solar panels for a Hong Kong real estate investment trust, it participated in a use case for Singapore’s central bank digital currency trials.
KPMG is not the first to launch a solution aimed at transparently reporting greenhouse gas emissions. Earlier this year, Mercedes-Benz disclosed working with blockchain startup Circulor on a project for tracking CO2 emissions in the cobalt supply chain. Circulor is working with Volvo on similar projects. More recently, CarbonBlock won the Global Innovation Award by Plug and Play for its solution to increase the transparency of greenhouse emissions in the Porsche’s supply chain. It achieves this by providing the carbon footprints of all materials used during production. Both of these solutions could potentially complement KPMG’s work.
In terms of big names in this area, the Interwork Alliance is focusing on token standards for carbon credits. Its membership includes Accenture, Microsoft and blockchain energy firms. One of its founders is Xpansiv, a subsidiary of CBLmarkets, which might be a competitor to Allinfra.
Meanwhile, KPMG’s entrance into this market may significantly increase the reach of blockchain CO2 traceability technology due to the company’s extensive and diverse client list.