As businesses and organizations start to commit and adopt to sustainable practices into their business operations, through Environmental, Social and Governance (ESG), they face challenges in ensuring transparency and trust in their reporting and operations. This is where blockchain steps in. It offers a secure and decentralized way to track sustainability metrics and enhancing supply chain visibility, to build stakeholder confidence in ESG performance.

What is Blockchain and How Did It Evolve?

Blockchain is a type of distributed ledger technology (DLT) that securely records transactions and tracks assets across a business network. Instead of relying on a central system, it stores data in interconnected blocks, making the records transparent, tamper-proof, and immutable. Anything of value, from currency to documents, can be digitized, exchanged, and tracked on the blockchain. In simple terms, blockchain ensures that digital assets remain secure, transparent, and cannot be altered or hacked. In ESG, Blockchain brings transparency, traceability, and trust to ESG by providing secure and verifiable data for sustainability reporting and supply chain accountability.

Blockchain operate as a shared database that is spread across many computers, making it very difficult to change or tamper with the data. Every transaction is checked and approved by the network through a system of agreement called consensus.

Blockchain Technology was introduced with the emergence of Bitcoin in 2008, as its technology was designed as a decentralised digital currency to enable transactions without a trusted intermediary. From 2015, Blockchain began to support smart or digital contracts, expanding its application into various fields. Today, it continues to evolve with further advancements aimed at improving privacy, scalability and its integration with AI and IoT.

Benefits of Blockchain Technology in ESGGreater trust in ESG data:

Blockchain ensures that sustainability data is secure, accurate, and accessible only to authorized members, reducing the risk of greenwashing and building stakeholder confidence.

• Enhanced security of disclosures:All ESG transactions and records are validated by the network and stored permanently, ensuring transparency and preventing data manipulation.

• Better traceability in supply chains:Blockchain tracks materials and emissions, helping prove ethical sourcing and sustainable practices.

• Improved efficiency in reporting:Shared records and smart contracts make ESG reporting faster and reduce manual work.

• Automated sustainability actions:Smart contracts can automatically issue carbon credits or confirm compliance when conditions are met.

• Accountability:Ensures all stakeholders have access to the same secure, reliable information. Once data is entered, it cannot be altered, allowing stakeholders to independently verify sustainability goals of the company.

How ARRO facilitates Blockchain Technology?

ARRO uses blockchain to guarantee authenticity, security, and traceability of ESG data and certifications. Blockchain integration in ARRO offers the following advantages:

• Immutable Audit Trails:Every emission record is securely time-stamped and tamper-proof.

• Verified Carbon Certificates:Blockchain-validated, digitally signed, and independently verifiable certificates for voluntary and compliance markets.

• Carbon Trading Ready:Enables transparent buying, selling, and retiring of credits.

• Green Financing Support:Verified ESG data boosts access to green bonds and sustainability-linked loans.

• Stronger Stakeholder Trust:Immutable records protect against greenwashing and meet regulatory demands.

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