These companies are using blockchain to improve ESG compliance for the mining industry
Various companies are looking to improve compliance with ESG standards for mining through blockchain technology.
Sentient Equity Partners has joined the xx network to use its blockchain ecosystem to post its ESG compliance data in a public and transparent matter.
As part of its efforts to increase transparency, Sentient will also collaborate with C02 Labs and the xx network to develop a platform for mining operations’ ESG compliance.
While neither Sentient nor xx are household names in the blockchain industry yet, their collaboration marks an essential step in integrating blockchain technology into the broader mining industry.
Blockchain and ESG are a match made in heaven
ESG reporting is the disclosure of environmental, social, and corporate governance data. As with all disclosures, its purpose is to shed a light on a company’s ESG activities, usually to appease local environmental and corporate regulations.
However, the changing landscape of the global financial market has made ESG compliance much more than just another regulatory hurdle to overcome. The global increase in environmental consciousness means that better ESG compliance has become a tool to attract investors and financing as many are now looking to support sustainable businesses.
In the past decade or so, the mining industry has found itself in the middle of a fierce battle for the environment. On one hand, it serves as the backbone of almost every other industry and is integral to the global economy. On the other hand, its environmental impacts are hard to ignore and costly to resolve, making it an easy target in the global fight against pollution.
Given its profitability and importance to global trade, the mining industry is able to respond quickly to address the pressures from funds, shareholders, and governments to comply with various sustainability and CO2 reduction targets and regulations.
And there’s no faster and more reliable way to introduce transparency into a business than through blockchain technology.
William Carter, the CTO of the xx network, told CryptoSlate that the executive order from U.S. President Biden to focus on the energy impact of blockchain technology and the current climate crisis have incentivized investing in environmental transparency.
“Blockchain and decentralization has always been about transparency. The xx network believes this ethos should extend far beyond financial systems and has already focused on applying it to communications, voting, and computing,” he said.
As a development fund manager investing in mining projects, Sentient Equity Partners quickly realized the potential blockchain technology had in helping its investments meet various global regulations.
The company has recently entered into binding agreements to sell the Rincon lithium brine project in Argentina to Rio Tinto, the global mining conglomerate. Given the significance lithium mining has in the fight for the environment, posting the mine’s ESG compliance data in a public and transparent manner using a blockchain system was Sentient’s top priority.
“Rio Tinto’s recent acquisition from Sentient of the Rincon Mine lithium project in Salta Province—Argentina’s emerging hub for greenfield projects—reflects a strong commitment to developing a low carbon footprint. Support for CO2’s blockchain ESG reporting is part of this same push for decarbonization,” Mike de Leeuw, the managing partner at Sentient, told CryptoSlate.
To that end, Sentient will collaborate with C02 Labs and the xx network to develop a platform for ESG compliance specifically tailored for mining operations. De Leeuw explained that the company has always been focused on innovation and sustainability, as well as looking to reduce and identify new opportunities.
“We believe that this project with CO2 Labs and the xx network to develop an ESG and Carbon footprint framework for miners and mining funds to comply with existing and future ESG regulations will add significant value to the mining industry. All industries, especially mineral-based businesses, have a responsibility to conserve resources and to invest in efficient low carbon technology. There is no question that ESG reporting, specifically the CO2 Labs blockchain platform, is critical to all stakeholders–employees, the general public, and shareholders.”
David Chaum, the CEO of the xx network and the inventor of digital cash, said that it was an honor to have Sentient join the xx ecosystem.
“We are happy we can contribute to the environment and hope many other players follow the effort to decarbonise their portfolio and do so in an open and transparent manner.”