Blockchain technology is steadily gaining traction as a platform for action on global sustainability issues, and the latest case study could mark a turning point for the ocean pollution problem. The U.S. company SC Johnson partnered with Canadian startup Plastic Bank in a new blockchain-enabled pilot project aimed at collecting and recycling plastic waste in eight Indonesian communities. We take a closer look.
What is blockchain?
Blockchain is the technology that supports cryptocurrencies like Bitcoin. Unfortunately, the high-flying, speculative nature of Bitcoin and other popular cryptocurrencies has overshadowed the workaday nature of blockchain itself.
Blockchain is simply a form of digital record-keeping. Think of it like an online ledger book that is visible to both the buyer and the seller.
That's a fundamental contrast to conventional accounting, in which the buyer and seller keep their own separate books.
With access to the same information, buyers and sellers can seamlessly use digital tokens—aka cryptocurrencies—to stand in for cash transactions. In effect, blockchain brings the barter economy into the 21st century.
By pegging the value of tokens to local currency, blockchain transactions can also interact with the local cash economy.
The blockchain angle is critical to the success of the Indonesian partnership between SC Johnson and Plastic Bank, because it alleviates safety concerns in communities where residents are reluctant to carry cash. It also provides a secure alternative for participants without bank accounts.
From a bottom-line perspective, blockchain also reduces overhead, error and theft risks related to conventional cash handling.
The Plastic Bank model builds on the waste economy long practiced by local collectors in Indonesia and elsewhere. The partnership with SC Johnson involves opening eight recycling centers in Indonesia by next May. The first one is already up and running in Bali.
As SC Johnson notes, Indonesia has become the focus of global attention for its plastic pollution as well as its rich marine biodiversity. In other words, Indonesia offers a high-profile opportunity for action with a significant potential for success.
The new initiative also represents a stepping-up of SC Johnson's sustainability profile in Indonesia, where it has longstanding operations. Recent actions include using waste palm shells and rice husks as biofuel at its Medan and Surabaya facilities.
Another significant factor is the country's willingness to provide financial support. Indonesia recently pledged up to $1 billion annually for overall water pollution measures, including a target of reducing marine waste 70 percent by 2025.
For those of you keeping score at home, Plastic Bank uses IBM Blockchain through the cloud service provider Cognition Foundry, powered by IBM LinuxONE.
There's plastic, and then there's Social Plastic
In addition to tracking transactions between collectors and recycling facilities, Plastic Bank enables manufacturers to purchase and track the recycled product through their supply chains under the Social Plastic name.
Social Plastic provides a sustainability marketing angle for consumers, and it also provides a carbon offset opportunity for corporations. Royal Dutch Shell, for example, was an early adopter when Plastic Bank launched its first recycling centers in Haiti. Getting SC Johnson on board represents another big step up for Plastic Bank. Founder and CEO David Katz explains:
This partnership with SC Johnson is the first of its kind in Indonesia. It will help create more opportunities for people living in poverty and will offer waste collectors an important sense of pride. SC Johnson is the first [consumer packaged goods] company to scale a program of this kind in Indonesia that will benefit a wide range of socio-economic demographics including local residents living below the poverty level.
Other recent partnerships include Germany-based Henkel and the British retailer Marks and Spencer.
Plastic Bank has also established a nonprofit, the Social Plastic Foundation, to help accelerate the adoption of its recycling centers globally.
As Plastic Bank grows, look for more manufacturers to bring Social Plastic into their supply chains.
Image credits: 1) and 2) courtesy of SC Johnson 3) Courtesy of Marks and Spencer