Everledger

What does the European Union’s Carbon Border Adjustment Mechanism indicate for the future of international trade?

Nathan Bucolo — Thu, 23 Feb 2023 10:40:45 +0000

In December 2022, the European Union’s (EU’s) Carbon Border Adjustment Mechanism (CBAM) was officially approved. The tool places a price on the carbon emitted during the production of carbon-intensive goods that are entering the EU and aims to equate the carbon price of imports to the carbon price of domestic production.

Companies importing raw materials and other goods into the EU must purchase CBAM certificates corresponding to the volume of the embedded direct emissions (also known as Scope 1 emissions). Once the transition phase has been completed on January 1, 2026, importers will need to declare each year the number of goods, and the associated embedded carbon, imported into the EU from the preceding year.

The introduction of this legislation indicates a new dawn on evidencing carbon emissions and governments and global supply chains are already preparing for the broad application of similar tools and additional adjustment mechanisms. Since this particular CBAM is designed to progress the EU’s climate objectives and incentivise cleaner non-EU industrial production, there is pressure now placed on businesses outside the EU to become more sustainable to ensure they remain competitive in the EU market.

Currently, limited information is available on the reporting, calculation and certification process. However, it is clear businesses will need to adapt their reporting and measuring systems to comply with the regulations, especially as more products are included and carbon border adjustment mechanisms expand to a point where it is the norm, not the exception. Reporting may not be the only process impacted during this implementation. Businesses’ overall sourcing could be disrupted as they look for more sustainable, affordable or accessible supply chains.

For the Critical Minerals sector in particular, the carbon intensity of production will become a key performance metric for major customers, off-takers and banks in the trade of critical minerals and energy materials. Customers along supply chains will need to accurately verify and record embedded carbon per unit of production, starting with Scope 1 (direct) emissions and expanding to include Scopes 2 (grid electricity) and 3 (indirect emissions). It is expected that the CBAM will expand to include a wider range of critical raw materials and potentially include finished or semi-finished products, such as cars.

Everledger has already been working with miners and producers to provide a platform to show, tell and sell their sustainability story and evidence of GHG emissions.

The Everledger Platform can underpin CBAM compliance systems as it streamlines the industry’s ability to securely and interoperably share key information with supply chain partners. This allows organisations to report verified greenhouse gas emissions (GHG) embedded in imports and clearly break down what is included in Scope 1, 2 and 3. Furthermore, the Everledger Platform is agnostic to geographical regions or product types, which allows for complex supply chains to be tracked and grouped together. The platform is essential for trade in high-value raw materials with complex value chain risk profiles. Everledger was founded to protect and enhance the value of responsibly sourced diamonds from rough stones through a complex network of traders, cutters, wholesalers and retailers. Our platform’s immutable blockchain ledger creates and protects market and brand value, with active clients across other complex industries including high-value textile raw materials, apparel, high-end spirits, and energy.

Is your business and your supply chain prepared for the future of international trade? Contact us to find out how the Everledger Platform can help your business prepare for and comply with new Carbon Border Adjustment Mechanisms.

The post What does the European Union’s Carbon Border Adjustment Mechanism indicate for the future of international trade? appeared first on Everledger.

US Inflation Reduction Act – are battery passports the key to meet EV requirements?

Lauren Roman — Wed, 12 Oct 2022 15:33:15 +0000

The USA Inflation Reduction Act, passed into law by President Biden on August 16th, 2022, sets aside $369 billion for climate and clean energy projects and policies. One of the key provisions for speeding the transition from internal combustion engines to electric vehicles (EVs) is a tax credit up to $7500 for US consumers purchasing electric vehicles.

However, in order to stimulate domestic production of not only EVs but also their batteries, the Act requires manufacturers to provide verifiable evidence that large percentages of material sourcing and manufacturing take place within the US or in a partner country with a free trade agreement. Manufacturers must prove that battery components have not been “extracted, processed or recycled by a foreign entity of concern.” Similarly, in the European Union, the proposed Battery Regulation is expected to be passed into law by the end of this year. The regulation puts the responsibility for supply chain accountability squarely on automotive manufacturers. As such, EV manufacturers will have to require that their suppliers provide evidence of their material sources and their compliance with the regulation all the way back to the mine. Supply chains however have proven extremely difficult to track and validate.

The use of a ‘battery passport’ could hold the key to addressing these supply chain challenges. This concept, pioneered by Everledger, and the Global Battery Alliance (GBA), enables auto manufacturers to certify where the minerals going into their batteries are sourced and that those sources are adhering to globally recognised ethical practices. Created on a distributed ecosystem via the Everledger platform, this ‘passport’ allows EV manufacturers to identify, trace and report the lifetime journey of each battery – from the origin and composition of battery components, right through to use in cars, end of life and disassembly, and recycling. Indeed, over the next 15 years, the EU will use this system to increase the minimum share of recovered cobalt, lead, lithium or nickel in batteries, all of which must be recorded on the passport.

A battery passport has been defined as a digital identity for batteries and key parts ie. modules. Represented as a QR code or other identifier, it can be scanned with a cell phone or tablet to access the data. This data can include battery chemistry and even state of health.

However, while auto manufacturers in the USA have been quick to invest in EV production over the past few years and have aggressive plans to continue to do so, the critical minerals required for the batteries to power EVs are found and/or processed predominantly in countries where free trade agreements with the US do not exist. For example, the world’s largest known reserves of cobalt, currently an essential mineral for EV batteries, are found in the Democratic Republic of Congo where human rights and child labor violations and poor environmental practices have been well documented. In the last decade, China produced 80% of the world’s lithium ion batteries and now controls 80% of the world’s cobalt.

The Inflation Reduction Act (IRA) requires that EV manufacturers source 40% of critical battery minerals domestically or with free trade partners by 2024. That percentage increases to a whopping 80% in 2026. And mines and battery material processing plants don’t come on at the flip of a switch. Mines are particularly controversial in the US due to the environmental consequences.

Responsible and transparent supply chains, circularity and lifecycle management will be critical for long-term success and a sustainable future for the automotive industry. The use of battery passports will help future proof new batteries, however, due to the challenges outlined, if consumer uptake of EVs in the US proves largely dependent upon the tax rebates earmarked by the IRA, it seems likely that the federal government will have to extend the deadlines set for approved mining and manufacturing.

The Inflation Reduction Act is perhaps the most comprehensive climate-related legislation in US history, so far. Implementation may not be as speedy as it could be, but it does give climate policy in the US a renewed focus and help shine a spotlight on creative business models and those businesses focused not just on profit margins but on impact to people and planet.

Find out how Everledger’s platform can help effectively evidence the requirements to comply with new EV legislation across your supply chain.

The post US Inflation Reduction Act – are battery passports the key to meet EV requirements? appeared first on Everledger.

How Smart Contracts Trigger Swift Action To Take Russian Goods Off The Market

Tom Luxton — Tue, 01 Mar 2022 00:37:05 +0000

Blockchain technology and smart contracts have opened up a whole new world of digital possibilities. At their most basic, smart contracts use precoded instructions to trigger outputs given certain inputs. Sophisticated smart contracts will even automate some or all outputs once the trigger event is set in motion.

The technology can even allow notification of all parties in the contract ensuring transparent transactions in real time. And while it may seem like an effective “set and forget” solution in cumbersome contract law, setting up smart contracts requires careful analysis and coding from the start to make the contract effective.

The uses of smart contracts are plentiful but let’s consider its role in creating transparent and traceable supply chains.

Supply chain management has been in the spotlight since the global pandemic demonstrated how fragile many of our supply chains truly are. It has also demonstrated how globally reliant many industries are because various raw or elemental parts of a finished product come from different areas of the world.

With the invasion of Ukraine, supply chains are again being thought about as countries move to apply sanctions against Russia including Russian-made products. Without transparent supply chains, how do we know what we are boycotting?

The global diamond industry has well-established trade corridors including in and out of Russia where one of the largest diamond mines in the world – Alrosa – is partially owned by the Russian Government. Today’s conscious consumers are able to educate themselves on these facts and use their purchasing power to demand retailers provide options that are conflict free.

Leonard di Caprio highlighted blood diamonds in spectacular fashion. Fast forward to 2022 where social media users can now easily and directly broadcast their views, thoughts, information and misinformation about products and brands. The business imperative of transparent supply chains is evident in being able to respond to, confirm and refute false claims.

Here’s where smart contract-enabled transparent supply chains become genius. Just as Scope 3 Greenhouse Gas emissions (GHG) reporting looks at the total picture upstream and downstream for an organisation, a fully transparent supply chain from provenance to end use shows these streams as well.

To use our diamond example in this context:

Scope 1 diamonds would be directly mined in Russia.
Scope 2 diamonds would pass through Russia on their way to market – for example, cutting and polishing.
Scope 3 diamonds would be able to demonstrate the complete journey and give transparency allowing end consumers to make up their minds.

In this scenario, the supply chain would also expose the upstream and downstream supply mechanisms such as major trading centres, the diamond bourses in Belgium, India and the UAE. Here consumers would be able to make a choice not just on their specific diamond but also see if it was part of a trade that included Russian diamonds. Accountability, like blockchain technology. becomes distributed.

Some diamond retailers, notably Brilliant Earth and Taylor and Hart both of whom have blockchain enabled provenance of stock, have already shown their stance by taking all Russian-mined stones off their sales platforms perhaps signalling wider consumer sentiment, or even getting ahead of hard sanctions. Others may be left behind because they simply do not have the provenance data available.

Furthermore, “get out of jail” clauses in sanctions – like Belgium is pushing for with regards to diamonds, or workarounds – like India seeking to establish with a rupee payment system for trade with Russia rise to the surface and people can see clearly the chain of custody along the supply chain. With transparent supply chains, the world is watching.

In a digital, Web 3, MetaCommerce world, it could be as easy as toggling a filter to strain out certain elements, at certain times.

We’d all prefer to live in a world free from the spectre of war. In the meantime, when we see world events seemingly spiralling out of control, we ask ourselves: what can I do? Just as there are many ways to provide direct aid to those in Ukraine right now, there are also many ways we can be conscious – and smart – consumers.

Author – Leanne Kemp

The post How Smart Contracts Trigger Swift Action To Take Russian Goods Off The Market appeared first on Everledger.

More women in leadership shouldn’t matter – but it really does

Jill Daniels — Fri, 04 Feb 2022 04:14:22 +0000

Since 2015 the number of women in senior leadership in business has grown and diversity in leadership is good for business;

Beyond business, female leaders from across generations are working together to find new solutions to the world’s biggest problems;

The tech sector must attract more women to unlock the potential of the Fourth Industrial Revolution and ensure technology is developed from a balanced perspective.

In an ideal world, it shouldn’t matter whether there’s a woman running the IMF, Microsoft or the Democratic Party. Does an SME owner or tech start-up care that it’s a woman who makes finance more accessible? If a miner, factory worker or fisherman gets a better share of the profits and can send his or her children to school, are they bothered that a woman made it possible?

Bush fires, burst riverbanks, melting icecaps, fatbergs, plastic islands and species extinction: none of these considers the sex of the perpetrators or decision-makers. Yet, encouraging more women into leadership positions remains critical in our era and given the fast-approaching challenges of the future.

The overall number of women in top business roles is still painfully low – only 5% of CEOs of major corporations in the US are women – but there are reasons for optimism. Since 2015 the number of women in senior leadership has grown, particularly in the C-suite where the representation of women has increased from 17% to 21%. Today, 44% of companies have three or more women in their C-suite, up from 29% of companies in 2015. Corporate America scores much lower than France or Norway, where businesses average more than 40% female representation on a board of directors.

Diversity in leadership is good for business. For example, a Harvard Business School report on the male-dominated venture capital industry found that “the more similar the investment partners, the lower their investments’ performance”. In fact, firms that increased their proportion of female partner hires by 10% saw, on average, a 1.5% spike in overall fund returns each year and had 9.7% more profitable exits.

Evolving job needs are empowering women and levelling the playing field. The new service economy doesn’t rely on physical strength but skills that come easily to women, such as determination, attention to detail and measured thinking. The female brain is naturally wired for long-term strategic vision and community building.

The emergence of female leaders can become a centrifugal force for good in the world. For the first time, we’re seeing examples of female leaders emerging from across the generations to cross-weave their knowledge and drive for change. If we take the environment and climate as an example, someone as experienced and respected as Jane Goodall is standing alongside teenage activists like Greta Thunberg. Importantly, there are now ambitious and capable women running influential organizations who can activate physical change through technology and policy. The recent progress with the circular economy and blockchain is a prime example.

There’s nothing inherently masculine about blockchain, artificial intelligence (AI) or machine learning; computers are androgynous by nature. That said, the tech sector remains heavily dominated by men. According to the World Economic Forum, the greatest challenge preventing the economic gender gap from closing is women’s under-representation in emerging roles. In cloud computing, just 12% of professionals are women; in engineering and Data and AI, the numbers are 15% and 26% respectively. Unless the sector can balance the ledger by making roles attractive to women, then we risk missing out on the full potential of the Fourth Industrial Revolution.

Organizations need to ensure there are sufficient rungs on the ladder to help women climb into management positions. We need to be open-minded enough to bring in female leaders from other industries, who don’t have a tech background. We need to work closely with schools and universities to win the argument that tech isn’t just a male career path. Technology also has a role to play – and responsibility – in promoting diversity in the workplace, given its ability to change working relationships, encourage transparency and connect people around the world. In a period of constant flux, organizations that prioritize a diverse and inclusive culture will be better placed to solve the problems of the future.

Research by Deloitte suggests companies with an inclusive culture are six times more likely to be innovative. By staying ahead of changes, they are twice as likely to hit or better financial targets. This means providing female mentors and role models, demonstrating trust (rather than talking about it), creating an environment that encourages collaboration, using technology to break barriers and sourcing innovation openly.

Women can lead our sector forward too. Now that technology is all-pervasive, the traditional sector lines have become blurred. Brands that cling to the old structures will find themselves overtaken and left behind. This is when women’s ability to empathize and seek compromise becomes a powerful asset. If technology is supposed to service the whole of humanity, the big decisions need to be taken from a balanced perspective.

More women are now being elected to legislatures across the world: women hold 25.2% of parliamentary lower-house seats and 21.2% of ministerial positions, compared to 24.1% and 19% respectively last year. While there is a long way to go, improving political empowerment for women typically corresponds with increased numbers of women in senior roles in the labour market.

In my own Queensland, a women-led government is taking big steps forward on behalf of the state economy. They’ve shown a real desire to listen to experts in the wider world of business. We’re seeing women from other fields, such as ex-Olympic athletes, joining the political arena. Yet, for those countries and political parties – and corporations for that matter – which have never appointed a woman to the top position, the suspicion that the system isn’t fair and that the glass ceilings are unbreakable grows with every election.

The survival of the planet requires new thinking and strategies. We are in a pitched battle between the present array of resources and attitudes and the future struggling to be born. Women get it; young people get it. They are creating a whole different mindset.

Ultimately, the problems we face are not technological, but human – the human system is broken. People should always be appointed on merit and the electorate must decide, but more still needs to be done to give all women the best possible chance of rising to the top. If that happens, then I’ll be the first to say that who’s in charge doesn’t matter a jot.

The post More women in leadership shouldn’t matter – but it really does appeared first on Everledger.

Can the rising youth create peer pressure in the diamond industry?

Jill Daniels — Thu, 03 Feb 2022 23:38:07 +0000

Everledger talks to five members of the Young Diamantaires Club, a global network that brings together the next generation of the diamond industry. How did it start? What gets them ticking? What needs to change?

Introducing…

Rami Baron, third-generation family jeweller and President of the Diamond Dealers Club of Australia.
Prernaa Makhariaa, a graduate of the GIA and India’s first social media influencer for the diamond industry.
Ayelet Lerner, a fifth-generation family jeweller, based in the historic Antwerp diamond district.
Chris Zoettl, a family-owned jewellery retailer based in Munich, and international wholesaler.
Kevin Vantyghem, a second-generation Canadian wholesaler and active member of the Canadian Jewellers Association.

Rami: Back in 2016, I attended an executive meeting of the World Federation of Diamond Bourses and there was a bunch of old guys like me round the table. I thought we can’t just talk about diversity, then do nothing about it. I wanted to challenge our thinking as an industry, so I launched the Young Diamantaires project later that year at the World Diamond Congress in Dubai. We started as a small discussion group and held some breakfast clubs. The response was fantastic. We have over 300 diamond industry members from all around the world now. The club is run by its members, so I’m happy to take a back seat.

How does it work?

Rami: We communicate on WhatsApp on all sorts of issues, from synthetics and conflict-free to blockchain and e-commerce. There are only three rules. Firstly, members need to be under 45 years old. Next, don’t use our platform as a direct sales tool. Of course, our members can do business with each other privately, but we don’t tolerate spamming. Finally, be respectful. There are plenty of disagreements, which is great. But everybody is super friendly.

What do you like about the club?

Chris: It’s great to have the whole pipeline represented, from artisanal miners and manufacturers to designers, goldsmiths and traditional dealers. The range of views is both interesting and valuable.

Prernaa: You also hear from people from every part of the globe. No matter what the time is, we’re all up for each other. There is a close bond.

How did the club respond to the pandemic?

Ayelet: The lockdown brought the club closer, no doubt. There was so much uncertainty. We didn’t know how or when the pandemic would ever end. Would people actually want diamonds again? Or would their priorities change, especially with the economic downturn? Couples were postponing their engagement wedding plans. It was a scary time.

Prernaa: In India, there were a lot of bad news stories: major logistical issues, rough sales stalled, factories closed, shipments delayed. Having a peer network that allowed us to sound off was really important.

Kevin: The diamond network is fairly small in Canada, so being connected worldwide was a real boost. What was everyone else going through? How were they dealing with customers and suppliers? I was grateful to have like-minded people just a few clicks away. I remember talking to Chris in Germany after lockdown ended, which was sooner than in Canada. He had some positive feedback that shoppers were coming back. That gave me a lift.

Chris: In March, when we had to close the store, I almost cried. Then, on April 28th, we opened up again and within the first half hour, a guy came in and bought an engagement ring. July ended up being our third best month of all time. In a time of crisis, people return to their values. Expensive vacations or new iPhones don’t last like a diamond. If you ask somebody about their jewellery, they will always touch it and tell you the story behind it. That tactile connection is timeless and irreplaceable.

What is the difference between old and young diamantaires?

Rami: For many decades, the industry was a closed shop. Dealers guarded their suppliers jealously and did business within limited circles. Don’t get me wrong: diamantaires are traditionally very trustworthy to one another. A handshake or a scribbled note on a piece of paper could be worth millions of dollars. But they don’t project that trust to the outside world. I think that younger diamantaires are more open with their relationships. It’s harder to turn a profit nowadays, so you need to have a wider network of suppliers.

Chris: I’d say we are quicker to refer suppliers and give recommendations than our predecessors. There is less competition in that respect, because you also get favours in return. We don’t have the same fear that somebody is trying to pinch our business.

Ayelet: The diamond industry is known for having a tremendous amount of boards and organisations and associations, which are mostly led by older men. These organisations do important work, but they are also an obstacle to change. Young people tend to bypass them, because that’s not a format that works for us. We want to collaborate to get stuff done.

Rami: This new generation is more accepting of differences, such as gender acceptance.

Kevin: There was a certain mystery about our industry for a long time. Young people want to bring those walls down. Keep the internal trust, but open ourselves up to outside scrutiny. The vast majority of businesses are medium to very small companies, and typically family run. The club helps to bring these smaller groups together. I’d say that some of the boards were created by bigger companies that were watching out for themselves.

Ayelet: As a club, we are still a long way from making any real change. At the moment, we are a support network rather than a campaign group.

Kevin: But hopefully our voice will grow in the future. At the start, people maybe thought we were a bunch of crazy kids. What do we need them for? Their turn will come in 20 years, when they replace us on these boards. But I think we are starting to attract attention. We are receiving support. It’s exciting to see the momentum gather.

Is there a generational divide on technology?

Prernaa: Most businesses in Indian still believe in the touch-and-feel method of buying jewellery, rather than becoming ecommerce savvy. In lockdown, that started to change. Everybody, even the older generation, is now communicating by Zoom. We could start to see a shift in attitudes, if the disruption continues.

Kevin: I think it’s more of a mindset than an age thing. There are some older dealers who actively embrace transparency and the technology behind it. The younger generation are more open to communication, and tech helps in that respect. So, it’s not technology for its own sake, but rather a reflection of changing priorities.

Rami: The next generation are keen to share a different message about who they are as an industry. Young people recognise that provenance is tied to consumer trust. Transparency around origin and the lifetime journey of diamonds is non-negotiable.

What are your experiences of blockchain-certified provenance?

Chris: Provenance can be an effective marketing tool. Think how luxury providers like Ferrari talk about provenance and the role of their craftsmen. They celebrate their stories. Consumers – and retailers – will be attracted to that background story, as long as the romance of the diamond is maintained. At the end of the day, the buyer will trust the retailer more than the technology. If solutions like Everledger can focus on the final 50 centimetres of the pipeline and put something useful in the hands of the salesperson, then they will get a good response.

Kevin: As a wholesaler, blockchain-certified provenance is helpful for vetting manufacturers and suppliers. I’m always looking for the provenance of a stone and I’m happy to do due diligence on behalf of retailers. I take that worry off their plate. So if Everledger can come in and connect the dots more securely with the certificates, that would help me. That would be a good resource.

Rami: But it’s not the blockchain that will secure a deal. Blockchain means nothing to me or my customers. Give me an app with a visual component, then I’m all in.

Ayelet: I agree. Blockchain has to have a nice story to it. When you see the original rough transformed into a nine carat diamond – that’s a pretty story.

Prernaa: Optics are important. People do care about sustainability and conflict-free, but it needs to be well presented. That’s what sets you apart in this industry. Unbox the provenance of the diamond, just like a retailer revealing the beauty of a ring. Build a seamless story that reaches out to the customer. Can you create a beautiful story around every piece that educates each link along the chain?

Discover the Everledger platform here.

The post Can the rising youth create peer pressure in the diamond industry? appeared first on Everledger.

Clean Technologies Have More Complicated Mineral Requirements Than Fossil Fuels: A Critical Commitment To Transition Critical Minerals

Leanne Kemp — Thu, 13 Jan 2022 02:33:02 +0000

Everledger CEO Leanne Kemp explores how critical minerals mining must evolve in line with growing investor appetite for ESG compliance. In any moment, in any circumstance, a junction appears where we must align ourselves with Trust, Transparency & Truth to prevail. Could provenance technology help tell the truthful stories that investors need to read?

The race is on to supply the critical minerals and metals that are the essential building blocks for the clean energy technologies of the future. The reality is that today’s electric vehicle batteries, electronics batteries, wind turbines, charging stations, solar panels, and transmission lines can’t be built without copper, lithium, nickel or cobalt alongside other rare earths.

Yet, while the opportunity for mining companies and jurisdictions is clear, so too are the rising challenges around environmental, social and governmental (ESG) compliance. Consumer demand, government regulation and, perhaps most telling, investor pressure, have focused the attention on green credentials. When the largest investors such as Blackrock BLK -0.3%, with more than US$10 trillion under management (yes trillion), screen out poor ESG credentials, it becomes a necessity for industry, business, shareholders and governments to listen up.

All considerations, from now on, must be seen through a climate lens, especially as investors buy into the journey to net zero. There is no capital shortage – it’s the supply of bankable projects that is lacking. Climate risk is investment risk, and the narrowing window for governments to reach net-zero goals means that investors need to start adapting their portfolios.

“The call for zero net emissions by 2050 is a major wake-up call for the mining industry,” explained Jeff Haworth, Director of the Geological Survey for the government of Western Australia, an important territory for critical metals, minerals and rare earths in energy, automotive, aeronautic and defense markets. “How do we actually become negative in carbon emissions, and yet still supply the world’s needs for critical minerals? It’s a daunting proposition. Clean energy technologies will quadruple by 2040. Demand for batteries will accelerate nine to 10-fold over the next decade. All countries and car companies have ambitions around batteries and EVs, so we need to mine those resources responsibly. We can’t rely on carbon offsets.”

Price and provenance

Over the last five years, Jeff has seen ESG become more and more important in discussions with investors. “Jurisdictions such as the European Union are driving that change with its Battery Passport and the strengthening of certification by CERA (Certification of Raw Materials) and IRMA (Initiative for Responsible Mining Assurance). Suppliers increasingly need to prove that they are mining with environmental responsibility, fair labor costs and conditions, as well as benefits to impacted communities. The major car OEMs are coming on board with that as well, demanding evidence of ethical and green mining. It used to be all about price, not provenance. Now, buyers are increasingly willing to pay a premium price, knowing that a mineral or metal is ethically mined, sourced, or recycled.”

Tony Knight is Chief Geologist for the state of Queensland, also in Australia, helping the industry become more efficient and effective in exploration, discovery and development of new mineral supply chains or supply in general. “There’s no doubt we’re going to see a substantial change in the way we find and process minerals to minimize our carbon and water footprint,” he said. “This wholescale modernization will require a change to the economics-first approach, whereby profit is the key and only driver. We have a global problem that resources are running out, even as the population is rising dramatically. Demands will grow, while the planet cannot. That means a shift to minimize what we take, and to maximize what we can put back.”

Within the next decade, Tony believes that the provenance of a mineral will become as fundamental as its quality. “Purity of ore can’t just entail chemical composition. It needs to describe whether it was sourced from an unethical part of the world or at huge expense to the environment. That provenance story is becoming mainstream for products such as food and also clothing. The mineral sector needs to be part of the societal transition.”

Show not tell

Simply saying you’re doing the right thing is no longer sufficient with investors or regulators. Likewise, the media and consumers are developing an acute sense for greenwashing. This ability to prove ESG credentials beyond doubt is part of the challenge faced by mining companies. “For a long time, we focused on ‘what we supply’,” said Tony. “The ‘how we supply it’ piece is incredibly important these days. That’s what will differentiate suppliers into the future. We’re seeing greater urgency to trace where a product came from and then track its journey into second life within the circular economy. This will eventually become business as usual, but the early-moving jurisdictions, industries or sectors will stand to benefit from short-term price differential.”

Jeff agrees that more needs done to broadcast a truthful story that connects back to underlying data and proof. “In Western Australia, we’re stepping away from diesel towards natural gas and also renewable energy to reduce greenhouse gases, and there’s a growth in haulage trucks powered by hydrogen or ammonia to further reduce that footprint. Markets are looking at electrification of the railway lines from mine to the ports, as well as autonomous mining to reduce the impact on personal safety and performance, while further cutting emissions. We also have a lot of good stories about how the mining industry contributes to local Aboriginal and rural communities. So, we have those ESG credentials, we just don’t talk about them as well as we could.”

He welcomed the launch of a blockchain pilot programme by the Commonwealth Government that aims to create a ‘digital certification’ for critical minerals throughout the supply chain from extraction to processing and export to global markets. The pilot will help companies in the sector adhere to compliance regulations and increase the demand for Australian minerals in global markets, while also simplifying the process and lowering costs.

“This will prove helpful for us as regulators, but also help the mining companies, purchasers and OEMs that need to know where metals and minerals have come from. Western Australia is an important global supplier of both lithium and nickel, and we are looking at fingerprinting of both these critical minerals, learning from the recent progress by the gold mining industry. It’s important for governments to help companies navigate their way through these ESG and emissions requirements, because they can be quite complicated, especially for small and medium-sized companies.”

Creating new markets

The pilot shows the abundant opportunities for tech companies and entrepreneurs to accelerate the green transition, in mining and other sectors. For example, provenance technology can help strengthen domestic mineral supply chains, reduce the reliance on foreign minerals, and minimize carbon emissions, helping local industries rise to the top of an ethical, sustainable supply chain.

The flood in investment in green technologies opens the door to innovation, such as the development of substitutes for rare materials that are more plentiful, sustainably sourced or more easily recycled, recovered and reused. “We’ll see technologies introduced to make manufactured goods easier to recycle and new industries arise from the opportunity to recycle minerals. It feels inevitable that governments will demand better use of minerals, moving from a linear to circular economy,” said Tony.

However, we’re not there yet. While green technologies such as urban mining and circular economy are beginning to be better understood by industry, we’re still in the education phase. “The mineral sector will take time to let go of the economic imperative, which obviously can’t be abandoned entirely,” conceded Tony. “We have to recognise that payback periods can’t be as short as they used to be. We need more patient capital to get these cycles running properly.”

From my own perspective it’s also encouraging to see that marketplaces such as the London Metals Exchange begin to list “green” metals in a positive, experiential way with where associated carbon footprints attract a premium.

Nature positive

One of the big discussions at COP26 was around carbon tax. Some countries are introducing it, or have already introduced it, and others are sitting on the fence. We are at a crossroads. Do we accept that the price the planet is paying is simply a cost externality that’s simply too expensive to deal with? Or could provenance technology play a role in helping to establish where taxes should be introduced, and identifying where companies are doing the right for rebate or showing best practice?

I was also interested to hear the growing buzz in Glasgow around climate financial disclosures and how they are edging closer to government policy. In recent years, we have seen a fundamental shift in responsibility through, first, the climate-related financial disclosures and now the nature-related financial disclosures. The slogan “no carbon negative without being nature positive” was voiced in many conversations.

“We can’t just see nature as a commodity, but a finite resource,” said Tony. “The question we need to ask is: How can we adopt the economics of nature, giving the natural environment a value that we haven’t done in the past? Surely, we can avoid situations where it’s cheaper to pump methane into the environment than it is to manage it. Does that change come from government regulation, market forces or is it voluntary? Either way, there seems an inherent logic in preventing pollution. We need to think of commerce beyond just price. It’s got to be price and provenance in the same realm.”

Investors increasingly want to see a better balance between people, planet, profit and prosperity. That will require trade-offs. There needs to be an awakening around the externality of costs to the planet that we ignore. In effect, the environment is subsidizing our economic activities. Eventually, it will run out of patience.

The post Clean Technologies Have More Complicated Mineral Requirements Than Fossil Fuels: A Critical Commitment To Transition Critical Minerals appeared first on Everledger.

How Blockchain Will Bridge Consumption To Consciousness In The Jewelry Industry

Eve Ledger — Wed, 12 Jan 2022 23:56:19 +0000

As the diamond industry re-emerges from the Covid-19 shutdown, Everledger CEO Leanne Kemp urges business leaders to widen their perspective on what really matters to consumers.

The diamond industry was reeling, even before Covid-19 hit it with an uppercut. In India, for example, where the vast majority of stones are cut and polished, many manufacturers were already operating under an impossible margin band, ranging between -7% to -1%, meaning they lost money on every diamond sold. In 2019, global diamond jewelry sales had already dropped by up to 5%, according to Bain’s, while mining and midstream revenues had shrunk by 25% and 10%, respectively. For some smaller operators, this sudden recession could prove a knock-out blow.

The old-fashioned hand-shake culture in the diamond industry arguably left it more vulnerable to a global pandemic than others. For example, International diamond shows – a crucial networking and sales window in the calendar – were heavily disrupted by the grounding of air travel. Diamond jewelry is traditionally a bricks-and-mortar marketplace, so those without a scalable e-commerce offer and well-established digital customer engagement systems were caught cold. Restrictions on the supply chain, and faltering consumer demand, will result in a drop in rough-diamond sales of 30% to 40% this year ($7 billion to $8 billion) as predicted by Moody’s MCO +1.4%.

All eyes are now trained on the peak season of Thanksgiving, Christmas and Lunar New Year, as retailers and manufacturers attempt to regain lost ground from the first financial quarters of 2020. There are some grounds for optimism. The same Moody’s forecast expects a market pick up in the second half as social distancing eases, with revenues rising 20% to 25% in 2021, barring another virus wave. The world’s largest diamond mining company Alrosa predicts a rise in demand by July or August, buoyed by the fact that sales are already bouncing back in China and other Asian markets.

A problem shared…

While conversations will center on the pandemic recovery, the industry must also address the underlying issues that have hampered its progress in recent years. For too long, the focus has rested on efficiency: how to make supply chains bigger, better, faster and cheaper. Diamantaires have lost sight of the collective benefits of value chains, not least in reducing risk. As business author Michael Porter first described it, the “value chain” is the set of processes that add value to a finished product as it moves through a supply chain. Diamond manufacturers add a significant value to a diamond, despite the low aggregated cost it brings to the chain.

Nonetheless, the fact that mid-tier manufacturers are operating with negative margins is everybody’s challenge to solve. The fact that retailers must convince consumers about the provenance of their jewelry is everybody’s challenge to solve. Might the impact of the pandemic have been mitigated by a more united front?

Covid-19 has created an excess supply of diamonds and lower demand from customers, suggesting price drops all along the pipeline. Yet, prices are already rock bottom. In this buyer’s market, is it possible that a new value system could emerge, based on more than simply dollars and yuan? A values system, perhaps?

Notably, people who love diamond jewelry also want to know their purchase has been sustainably and ethically sourced. In the post-pandemic market, these conscious consumers will increasingly call the shots. With prices so low, auditability is becoming a source of added value – and a bargaining chip. Those businesses with the desire and ability to meet the provenance challenge will be better placed to shake off the rigours of the pandemic, and then prosper in the long-term.

Indian diamond cutters who process the lion’s share of low-grade stones have been forced to close because the flow of raw material has dried up, forcing the mass exodus of an estimated 200,000 workers from the key diamond processing center of Surat.

Retailers are already responding to their demands by passing the need for transparency, accountability and truth down the chain to manufacturers and miners alike. Market leaders like Alrosa are investing heavily in sustainability reports to demonstrate their green and ethical credentials. A good backstory is now a business asset. Take the Dimexon Group, for example. A diamond manufacturer and jeweler based in India and China, the company has been empowering its 75% women workforce for 40 years. Today, half of the group’s management team are also women – a rare occurrence in what remains a male-dominated industry.

The industry has entered an evolutionary period, from which only the fittest will survive. With provenance changing from a nice-to-have to a business imperative, the definition of ‘fittest’ may start to change too. The most conscious of the planet and people, perhaps? The most accountable and transparent. The most willing to celebrate truth. Imagine if fittest meant: the greatest contributors to a value chain in which stakeholders matter just as much as shareholders.

Now, consumers are speaking directly to the diamond industry. They want to know for sure that a natural diamond reflects their own principles around authenticity, ethics and sustainability. Saying it’s so, doesn’t make it so. Gone are the days when even a reputable supplier could sell to Gucci without a high level of auditability. And transparency isn’t the preserve of top luxury brands. Low price leaders such as Costco won’t accept face value either. Pop-up retailers must demonstrate a pedigree of legitimate sourcing to sell their affordable jewelry.

Tech propulsion

Digitized information and communication are vital for achieving a transparency revolution. However, technology for technology’s sake interests nobody. Any new solution must have a human dimension to attract end consumers and move goods throughout the whole pipeline.

Technology can help to propel the mindset of the industry from consumption and efficiency to consciousness and contribution. For example, as new diamond categories emerge – such as green, carbon-neutral and conflict-free – secure blockchain solutions can help retailers, manufacturers and mining companies to communicate the sustainability and ethical credentials of each stone. Rather than pushing in isolation, the whole value chain unites around a collective consensus, creating a single version of the truth and a more secure distributed tech stack. Consumers, buyers and suppliers can now search for the diamonds that best meet their priorities. Transparency and trust emerge as a powerful market force.

Now or never?

Like their post-war predecessors, today’s diamantaires face an existential crisis, caused by the emergence of synthetic stones and the changing retail habits of consumers. Jewelers find themselves in a far bigger luxury arena than ever before, competing with other sectors for wallet share. Instead of new earrings or a necklace, for example, a millennial or newlywed may choose to splash out on a trip of a lifetime or designer mobile phone.

The longer that diamond businesses sit within their echo chambers, making deals with the same old people through the same old channels, the further they risk falling behind. Conversely, there is an opportunity for companies that widen their perspective. If CEOs can tune into the wavelengths of systems leadership and technological innovation, then the future of precious stones may become more secure.

The cut of a diamond is vitally important for releasing the full brilliance of the stone. Moving forward, the diamond industry needs to shape its message to the world in a way that shows every facet of a diamond’s provenance in the best possible light. The beauty and financial worth of a diamond remains a major part of the story – but not the whole story.

All this upheaval provides an opportune hiatus to rethink the storytelling behind diamonds. Coordinated marketing, once the industry’s go-to solution, will need to make a comeback as consumers emerge from the wreckage of coronavirus. Post-pandemic values may change broadly.

It’s time to look beyond the diamond ring to the finger that wears it. The industry must again speak directly to the consumer’s heart and mind. Businesses must listen to consumers like never before, then show their truth with actions and transparent evidence. Without this consciousness, the future of diamonds could remain insecure.

The post How Blockchain Will Bridge Consumption To Consciousness In The Jewelry Industry appeared first on Everledger.

How the European Commission plans to close the battery loop

Eve Ledger — Tue, 19 Oct 2021 03:17:21 +0000

04 May 2021

Lauren Roman, Everledger’s Business Development Director for Metals & Minerals, discusses the implications of the European Commission’s new regulations for electric vehicle batteries. Everledger battery passports offer a ready solution to help the industry align.

While COVID-19 caused a global slump in the automotive market last year, electric vehicle (EV) sales actually increased 45% year-on-year in Europe, passing 15% of total market share. This rapid growth in the EV industry is pushing battery repurposing, recycling and disposal up the agenda. The European Commission has taken proactive measures to regulate the expected 14-fold growth in EV and portable batteries over the next decade, as part of its European Green Deal to achieve climate neutrality and zero pollution targets by 2050.

The Circular Economy Action Plan will standardise the battery industry to ensure that all products placed on the EU market become sustainable, high-performing and safe along their entire life cycle. According to the directive, all batteries should be repurposed, remanufactured or properly disposed of, feeding valuable materials back into the economy.

The law will come into force on 1 January 2022. From 1 July 2024, only rechargeable industrial and electric vehicle batteries (EVBs) for which a carbon footprint declaration has been established, can be placed on the market. The legislation aims to foster the production of high-quality and high-performing batteries that enter the EU market, starting with efficient and sustainable production of raw materials for both primary and secondary use.

To help combat the risk of EVBs becoming a source of ecological damage – rather than a long-term ally in the fight against climate change – the regulation seeks to ensure functioning markets for secondary raw materials and related industrial processes. Appropriate collection and recycling of all waste batteries will help the EU to reduce its dependence on imports of materials of strategic importance.

Unique identifier

Safe data sharing will prove critical for tracking the flow of materials from extraction through to manufacture, primary and secondary use, and then end of life. Without this transparency, the EU’s regulation will be hard to enforce and fall short of its massive potential to positively impact the EVB ecosystem.

This year, the EU will launch a feasibility study for an electronic exchange system that collects, stores and processes battery information. The goal is to mandate a ‘battery passport’ – a unique electronic record – for each individual battery placed on the market that provides information on composition, provenance, use etc in a machine-readable format. Over the next 15 years, the EU will use this system to increase the minimum share of recovered cobalt, lead, lithium or nickel in batteries, all of which must be recorded on the passport.

Growth propulsion

Through the use of smart technologies, primarily blockchain and Internet of Things (IoT), the Everledger Platform is building serialised digital assets that can be transferred peer-to-peer on a permissioned basis. The battery and its critical parts are connected to the internet with IoT technologies such as NFC, RFID or QR, creating a digital twin of the battery on a distributed ecosystem that allows EV manufacturers and owners to track and report the lifetime journey of each battery.

In real time, EV manufacturers and other interested parties will know if a battery has been properly serviced and repaired. What is the chemistry and state of health? Has the battery been in an accident? How much and what type of materials have been recovered and what is the carbon offset of those recovered metals?

The Everledger Platform is designed to be interoperable with other industry platforms, with an emphasis on API development for data interactions. Eventually the platform will be plug and play in terms of how users consume and provide data. By knowing the current condition of each battery type, asset owners can increase the value of used EVs and their batteries, as well as screen out batteries unsuitable for repurposing.

The benefits of the Everledger Platform for the auto industry are wide-ranging, including regulatory compliance, improved safety, responsible end-of-life recovery and extended longevity of critical metals. Battery passports will help future-proof new batteries and help salvage any that are lost in the system. At Everledger, we share the EU’s vision to transform EVBs from a by-product of the e-automotive revolution into a valuable asset that propels its growth

The post How the European Commission plans to close the battery loop appeared first on Everledger.

Press Release: Provenance Proof Blockchain

Eve Ledger — Thu, 22 Jul 2021 09:22:30 +0000

PROVENANCE PROOF EVOLVES PLATFORM TO FACILITATE TRACKING OF COLOURED GEMSTONES ALONG THE SUPPLY CHAIN

Blockchain platform that provides transparency on a gemstone’s journey from mine to consumer has now more than 500,000 coloured gemstones tracked across more than 50 countries.

London and Lucerne, 22 July 2021

The platform of the Provenance Proof Blockchain, the world’s first digital ledger for tracking coloured gemstones created by the Swiss family-owned House of Gübelin, is pleased to announce a new, streamlined user interface and functionality. The goal is to enable both retailers and end consumers to trace the lifetime history of individual gemstones.

The Provenance Proof Blockchain records the journey of rubies, emeralds, sapphires and the full spectrum of coloured gemstones as they progress along the supply chain, from mine to shop. Every transaction and hand-over adds another entry to the immutable blockchain created by UK-based tech company Everledger.

Growing in popularity since its launch in 2019, the Provenance Proof Blockchain platform has now processed over 500,000 coloured gemstones from over 50 different types of gemstones found all around the world. With over 500 organisations now registered on the platform, regular users include artisanal miners, cutters, jewellery brands, gemological testing laboratories, and retailers.

New features

The complete redesign has put the platform in an easy-view modular layout, allowing rapid access to a stone’s provenance story. This provides evidence to consumers and other stakeholders about non-conflict and sustainably mined gemstones, in line with consumers’ own values. Platform features include the option for the current owner of a gemstone to print out a document that can be physically placed with their asset to provide proof of origin and supply chain transparency. With the growth of e-commerce in the jewellery industry due to the COVID-19 pandemic, the platform is now even more suitable for online sales applications.

The data that is captured on the platform of Provenance Proof Blockchain includes the characteristics of every gemstone that makes it unique, details of its origin, as well as under which circumstances the gem was mined, treated, cut, and set. When a gemstone’s data is submitted to the blockchain, it cannot be altered. Still, more data can be added, capturing the transformation process from gemstone rough to faceted material through to an item of jewellery. This secure approach helps to mitigate fraud and make sure the details are saved in their entirety, directly from the participants in the supply chain.

Industry adoption

Environmental and social sustainability-minded retailers have driven the bulk of Provenance Proof’s industry adoption.

Allison Charalambous, Head of Responsible Sourcing and Sustainability at US-based Brilliant Earth, said: “This generation of consumers want full transparency into their jewelry pieces and purchasing journeys. We continue to deliver on that promise with our partnership with Everledger.”

Josef Gad of Assay Jewelers commented: “Provenance Proof enables us to provide a level of transparency that had not previously been available in our industry. Their platform dispenses a friendly graphical user interface that effectively communicates each stone’s unique origin story. This partnership has not only added value on the consumer front but has also increased our B2B network of other retailers in search of stones with provenance. We are thrilled to become a part of this mission to cultivate a more ethical and transparent gemstone industry.”

Designer Bliss Lau commented: “From miners to artisans and designers, I believe the ability to document every stage of the creation process permanently promotes conscious, intentional choices along the way. The Provenance Proof Platform inherently humanizes each stage of the making process by connecting the global jewelry community to our end consumer. This is the future of how, as designers, we will protect our intellectual property, support our communities and our planet.”

Enhanced transparency and sustainability

Klemens Link, Head of Provenance Proof, commented: “Retailers and customers demand information that goes beyond the scientific data that can be provided in the gemological laboratory. They want to know the working conditions of the miners. For example, if they were receiving a fair price. Digital technology has bridged the gap. We are delighted to extend our partnership with Everledger. Without traceability and transparency, there is no trust in the gemstones market.”

Raphael Gübelin, President of the House of Gübelin, complemented: “Transparent information about the value chain is key when it comes to sustainability.”

Everledger CEO Leanne Kemp added: “Globally, there are approximately 50 million artisanal miners, responsible for 80% of the world’s coloured gemstone mining. As a matter of human decency, they must work in safe conditions and receive a fair price for their hard work. Piloted efforts to model clean supply chains, or fair trade gemstones, are re-emerging as a means to diffuse the principle of responsibility across the supply chain – whether companies, manufacturers, cutters, buyers and traders, and national governments. No jewellery is worth the degradation of communities or the environment.”

She concluded: “The Provenance Proof Platform uses blockchain to create a line of sight to where a gemstone came from as the steps it’s taken through the gemstones transformation. This transparency helps the entire industry to ensure that retailers and consumers prioritise sustainably sourced stones. Everledger is proud to contribute to such a worthwhile initiative, alongside our partners at Gübelin.”

The post Press Release: Provenance Proof Blockchain appeared first on Everledger.

Synthetic Biology Can Meet Decarbonization Challenges – But At Scale?

Leanne Kemp — Tue, 20 Jul 2021 03:51:14 +0000

Yet, while the opportunity for mining companies and jurisdictions is clear, so too are the rising challenges around environmental, social and governmental (ESG) compliance. Consumer demand, government regulation and, perhaps most telling, investor pressure, have focused the attention on green credentials. When the largest investors such as Blackrock BLK -0.3%, with more than US$10 trillion under management (yes trillion), screen out poorESG credentials, it becomes a necessity for industry, business, shareholders and governments to listen up.

Price and provenance

Show not tell

Creating new markets

Nature positive

The post Synthetic Biology Can Meet Decarbonization Challenges – But At Scale? appeared first on Everledger.