The growth of blockchain technology and its impact on social and financial inclusion

Social and financial inclusion isn’t just a buzzword—it’s a lifeline for over a billion people shut out of traditional systems. Blockchain and Web3 have the tools to change that. From giving the unbanked access to digital wallets, to enabling transparent aid distribution and decentralised identity, these technologies offer more than decentralisation—they offer dignity. Yet in the ESG (Environmental, Social and Governance) conversation, the ‘S’ for Social impact remains the most overlooked. It’s time to change that.

Blockchain’s Untapped Social Potential

Blockchain’s inherent attributes—transparency, immutability, and decentralisation—position it uniquely to address various social challenges. From promoting financial inclusion to ensuring fair labor practices, blockchain can be a catalyst for equitable societal transformation.​

A notable example is the Blockchain for Social Impact Coalition, which promotes the creation of blockchain solutions addressing global social and environmental issues. Their initiatives focus on mitigating the negative ESG impacts of distributed ledger technologies and engaging the blockchain community in supporting sustainable finance solutions. ​Blockchain for Social Impact

Enhancing Supply Chain Transparency

In industries plagued by opaque supply chains, blockchain offers a solution by providing verifiable and tamper-proof records. OpenSC, a platform launched in 2019, enables consumers to trace products from origin to consumption, ensuring ethical sourcing and production. By scanning a QR code, consumers can access detailed information about a product’s journey, fostering informed purchasing decisions and promoting fair labor practices. ​Wikipedia

Financial Inclusion and Empowerment

Blockchain’s decentralized nature can democratise access to financial services, especially in regions with limited banking infrastructure. Robby Greenfield, founder of Umoja Labs and former Head of Social Impact at ConsenSys, has been instrumental in leveraging blockchain for social good. His initiatives focus on providing blockchain-based financial solutions to underserved communities, exemplifying the technology’s potential to bridge economic disparities. ​Wikipedia

Addressing Environmental Concerns

While blockchain’s environmental impact, particularly concerning energy consumption, has been a topic of debate, advancements are underway to mitigate these concerns. The Cambridge Centre for Alternative Finance has developed tools like the Cambridge Blockchain Network Sustainability Index to assess and address the environmental footprint of blockchain networks, promoting more sustainable practices within the industry. ​Wikipedia

The Path Forward

For blockchain to realise its full potential in social impact, a concerted effort is required from developers, policymakers, and industry leaders. Integrating social considerations into blockchain projects can amplify positive outcomes and ensure that technological advancements contribute meaningfully to societal well-being.​

As Vanessa Santos aptly stated, “ESG integration is not optional. It’s an opportunity. We need new ideas to save the world. But we also need them to be stable, reliable, provable, and able to scale fast. And that’s only achievable with blockchain.” ​Fujitsu Global

By prioritising the ‘S’ in ESG, the blockchain community can drive innovations that not only revolutionize industries but also foster inclusive and sustainable social development.​