New technologies, new opportunities
EnviroSense is exploring how new technologies can be applied to the resource industry and the opportunities they offer our clients. From supporting chain of custody systems, easing due diligence on resources and providing efficiency and assurance gains when authenticating sustainability or provenance, technology should be working for you.
Responsible management and chain of custody certification schemes in the natural resources sector, such as PEFC (Programme of the Endorsement of Forestry Certification), FSC® (Forest Stewardship Council), RSPO (Roundtable on Sustainable Palm Oil), Bonsucro (global sugar network) and the MSC (Marine Stewardship Council), are established and respected.
Compliance with schemes is usually verified by auditing each company that has custody of the resource in the supply chain. This is either onsite at production sites and business premises or in the field (forest, plantation or fisheries). The certification decision is based predominately on a sample of information obtained by the auditor. The human limitations of auditing – competencies, skills, knowledge of the industry and a preoccupation with compiling information for the audit report, or if there is too much information to audit – can fail to address the original concept of chain of custody compliance verification ie are the materials being sold definitely and unequivocally certified?
New technologies can avoid some human audit limitations and support claims made by companies of certified and non-certified material based on transparent, verifiable, accurate and complete information.
EnviroSense is collaborating with several organisations/official bodies/companies to apply new technologies into existing supply chains. These technologies include:
- Blockchain and distributed ledgers
- Forensic asset marking systems
- Radio frequency identification (RFID)
- Satellite imagery
What is blockchain?
Blockchain technology is “an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value”.
Blockchain does not mean crypto-currency (Bitcoin, Altcoin etc.) and the principles can be applied without crypto-currency.
The ‘block’ is the piece of immutable or unchangeable information associated with a transaction. The information in the block is encrypted and ‘private keys’ can unencrypt the data.
The information could be the country of origin (harvest or extraction), region, sub-region or even the geo-coordinates; the actual resource (species, compound or element); quantity; what chain of custody scheme the resource is certified under and of course the companies in transactions.
The ‘chain’ is the permanent attachment of that specific transaction information to any subsequent transaction and forms an immutable record. As further transactions continue, the information included increases. This diagram represents the principle.
Distributed ledger technology (DLT)
Distributed ledgers are part of blockchain technology. A distributed ledger is essentially a database that is shared amongst users in a network on the internet with each company having an identical copy of the ledger. Each copy is linked to the others. The ‘sharing’ could be amongst a small supply chain consortium network, or extended to multiple companies and organisations.
Each unique transaction on the ledger requires validation from at least 70% of the network that the goods/information involved have not been used before. Consensus validation prevents double-selling as the network validates the authenticity of the transaction. The valid transaction is permanently recorded in the ledger as a ‘block’ of information.
Unencrypting the code enables access to all blocks of information right back to the first block and start of the supply chain.
Incorporating the principles of blockchain and distributed ledger technology provides a powerful tool to support authenticity claims when selling products, or to check the authenticity of claims and information on the products purchased or intended to be purchased. It can be used to record anything that is agreed as information to be shared.
Forensic asset marking systems and radio frequency identification (RFID)
Bulk products or processed resources and materials do not carry unique identification like logs with specific log numbers. In many cases, the physical product needs linking to its digital identity on the distributed ledger. Forensic asset marking and RFID enable bulk quantities to provide that important link and facilitate traceability.
High-resolution low-cost satellite mapping for use in due diligence
Auditing vast swathes of forests, plantations, mining concessions or large tracts of land is not practical or viable. Conclusions are made on a samples and an inference. High-resolution and low-cost maps of specific areas recently reported to be harvested , clear cuts harvested areas, incorporated and layered into ArcGIS base maps
Supporting chain of custody and due diligence systems
New technologies are an opportunity to support chain of custody and due diligence systems. Ultimately, when conducting due diligence and receiving chain of custody certified products, or products with a suppliers claim even if it is only being asserted as legal, there is an element of trust. Few scenarios exist where the physical product a company is intending to purchase can be conclusively matched to the supply chain documentation without additional assurance measures, either verification by an auditor or supporting technologies.
We have more than 20 years of specialist chain of custody and assurance verification experience and remain at the leading edge of technological developments.
EnviroSense and our technology partners can design, develop and implement an assurance solution for business that is practical, effective and efficient. Contact us now to talk through how your business could benefits from the latest advances.
 Don and Alex Tapscott (Blockchain Revolution, 2016)