BNP Paribas, Barclays Get Behind Blockchain Project for Supply Chains

Ten corporate entities, among them banking majors BNP Paribas and Barclays, have come together to initiate a large-scale project that will assess the potential of blockchain technology for tracking supply chains while opening the door to „financing for sustainable sourcing,” the Global Trade Review (GTR) portalwritestoday.

The group consists of three banks, three large companies, and four fintech startups. The project will seek to assess the influence of supply chains on the environment and find optimum solutions for achieving sustainability.

The start is expected in January 2018 and work will continue throughout the year. Unilever, Sappi, and Sainsbury’s along with Barclays, BNP Paribas, and Standard Chartered will carry out three blockchain-based pilots. The companies will operate with the blockchain systems provided by Provenance and Halotrade. Both startups are focused on offering blockchain solutions for supply chains.

“The trade finance is there as the fuel in the system to really turn the wheel, to incentivize suppliers and buyers to work in a way that is more ethical by giving more immediate access to lower cost financing.”

The project was initiated and promoted by the University of Cambridge Institute for Sustainability Leadership (CISL), which revealed more details at the One Planet Summit organized by French President Emmanuel Macron. The summit takes place two years after the Paris Agreement on climate action.

So far, the project has raised over $800,000 in public and private funding. It also has the support of the UK’s Department for International Development (DFID).

The first pilot test will explore how blockchain can be used to monitor tea produced in Malawi and sold to Sainsbury’s and Unilever and the tea packaging materials manufactured by Sappi. The two subsequent pilots will focus on other agricultural materials. The two experiments will be performed later in 2018 and will involve commodities from Africa.

Besides the fintech startups mentioned above, Landmapp and Focafet Foundation will also participate in the project. They will offer land rights documentation and open-source data sets.

“This technology has the real potential to help banks access more detailed and more reliable information about social and environmental impacts in a secure way, throughout the entire supply chain. This will enable financial institutions to broaden the scope of their financing offers and to propose financial incentives to their customer clients, based on their environmental and social standards,” she added.

For BNP Paribas, venturing into blockchain is not entirely new. We reported that BNP Paribas Securities Services and Tata Consultancy Services partnered to create a blockchain platform for corporate actions processing solutions.