Resolving the Core Tension of Impact-Focused Fintech

[mouakter13]

The emergence of decentralized autonomous organizations (DAOs) focused on merging technology with ESG and impact investing offers one way to maximize the potential of these new technologies. A DAO is essentially a group of people who agree to follow certain rules for a common purpose, which are encoded as smart contracts – i.e., programs on a blockchain that run when specific conditions are met, or when decisions are made through voting processes that expand on the previously established rules. Individual holders of a specific blockchain project’s token can vote to encode new processes as smart contracts, while managing technical development decisions, as well as participating in decisions involving the group’s collective assets. These assets can include deployable grant funding made available as cryptocurrencies managed by the DAO’s treasury, including stablecoins (a class of cryptocurrencies that attempt to offer price stability and are backed by a reserve asset). Impact-driven DAOs can design their own incentive structures to ensure the transparency, authenticity and credibility of data that treasury asset deployment decisions are based on.

If we utilize blockchain technology to track who is involved in realizing positive impact, while recording data on when, with whom and what they are contributing to this impact, we can facilitate an entirely different approach to ESG data management. But how can we accomplish this while simultaneously leaving the choice of how much personal data to contribute to a project up to the individual? What happens if a company’s ESG data, or impact claims, contradict what is observed by employees, customers, suppliers and other stakeholders? And how can those affected by the decisions and practices of a company, organization or group of individuals cambodia whatsapp number data share their observations and feedback without concern for the personal and professional repercussions of such disclosures?

One blockchain initiative attempting to answer these questions is taking place in Nepal, through Shah Hemp Inno-Ventures (SHIV), a Certified B Corporation prioritizing workers’ rights. In partnership with the Impact | Finance | Evolved (IFE) community, SHIV is utilizing blockchain-driven tools to protect the privacy of their workers while conducting surveys related to positive impact, and ensuring individuals own their own data. Meanwhile, IFE is developing a community that utilizes Non-Fungible Tokens (NFTs) and Self-Sovereign Identity (SSI) to facilitate contributions of data and feedback on impact-focused projects. Projects engaged with the community are supported in implementing tools that protect individual data ownership rights and privacy across the landscape of employee, advisor, customer and stakeholder engagement, alongside external advisors, verifiers and support providers. The data origin trail, and an unalterable timeline of work being conducted, is tracked by recording document hashes (calculated by a cryptographic algorithm that establishes the uniqueness of a file) on various blockchains, enabling projects to choose to create smart contracts and build decentralized applications that cannot be censored or shut down by third parties.