By Sofia-Marie Mascia
In continuing with my exploration of how impact investing can curb human rights abuses, I will look at a case study regarding supply chain transparency using Blockchain.
Humanity United is a foundation dedicated to solving problems long considered to be intractable. Launched in 2008, HU is part of The Omidyar Group - a philanthropy established by Pierre Omidyar, founder of eBay.
HU goes beyond traditional financial support and includes network development, advocacy, strategic communications, and HU-led initiatives. One of these HU-led initiatives is their newly founded impact investment sector. According to their mission statement, “Impact investing, and other financial interventions are of growing importance as we seek to scale innovative solutions that address key supply chain challenges, including worker empowerment, product traceability, and ethical recruitment.”
Their first impact investment was in Provenance, a digital platform that uses Blockchain technology to increase supply chain transparency. They use their technology to track the journey of products from their origin to purchase, allowing users to have a single data source from which to assess which products they purchase or which firms they invest in.
The long-term focus of Blockchain was to create an immutable digital ledger where companies could track payments and securities.
However, “If you talk to supply chain experts, their three primary areas of pain are visibility, process optimization, and demand management. Blockchain provides a system of trusted records that addresses all three," argues Brigid McDermott, vice president, Blockchain Business Development & Ecosystem, at IBM.
Investing in Provenance means investing in a long-term solution for widespread supply chain transparency problems. For example, factories that employ child laborers are only kept in business because companies demand their services.
If socially irresponsible actors in supply chains are identified with Provenance’s technology, the hope is that companies will consciously choose to employ other factories. The same technology that will identify the weakest links in responsible supply chains will also identify those factories that do employ children but do not receive business or foreign investment. If socially responsible actors are identified on every level of the supply chain, we have a hope of establishing a market economy devoid of human rights abuses.