Key Findings from the GBBC GSMI 5.0 Report, December 2024
The Global Blockchain Business Council (GBBC) launched the latest Global Standards Mapping Initiative (GSMI 5.0) report in December 2024.
GSMI 5.0 represents a collective effort by numerous industry players to map and analyze the blockchain and digital assets ecosystem. The report highlights the following key features:
Carbonmark’s team, with 50 years of combined experience in environmental markets, shares insights and future trends based on real client cases utilizing blockchain-enabled solutions. Carbonmark contributed to Section XI, “Advancing Blockchain Solutions for Sustainability and Sustainable Blockchains,” which details blockchain emissions analysis and its utilization in the environmental asset space.
Ready to scale up your positive impact with blockchain-enabled solutions?
Below is a summary of the key findings from this section.
Blockchain Advancing Sustainability Goals
Blockchain technology has tremendous potential to address climate change and facilitate compliance with sustainability requirements. It supports transparency, efficiency, and responsible practices, aiding efforts such as emissions reporting, circular economy initiatives, sustainable resource management, and renewable energy transitions.
Here are some areas where blockchain can be game-changing:
Circular Economy
Blockchain ensures transparent data for tracking resource sourcing, usage, recycling, and waste management. Applications include:
Sustainable Housing: Verifies material provenance.
Food Supply Chains: Enhances local food systems by tracking agricultural practices.
Waste Management: Rewards sustainable practices with tokenized assets.
Water Usage: Facilitates efficient water trading with provenance tracking.
Renewable Energy
Blockchain improves energy management and trading:
Facilitates microgrids and local energy markets.
Enables transparent pricing and efficient trading of renewable energy certificates (RECs).
Promotes smart contracts for secure transactions.
Selected Examples of Blockchain Solutions for Sustainability
Satva Trust: Tracks carbon data for global shipping, enhancing transparency.
KlimaDAO: Operates a decentralized platform for carbon credits, driving climate action by incentivizing carbon reduction and offsetting through blockchain-enabled transparency and accessibility.
Plastic Bank: Incentivizes plastic recycling in the Global South using tokenization.
Ava Labs & Hedera: Provide sustainable, energy-efficient blockchain platforms with tokenization for environmental assets.
Ripple Impact: Facilitates affordable cross-border payments, enhancing financial inclusion.
BTG Pactual: Combines reforestation efforts with carbon credit markets.
Algorand: Offers a Digital Health Passport to improve healthcare access in India.
Hyphen: Enhances carbon credit market integrity with automated monitoring tools.
Nuklai & AgroWeb3: Empower farmers with data transparency and financial inclusion, supporting the Global South's agricultural ecosystems
Net Zero Approach for Blockchain
As blockchain technology supports sustainability in other sectors, the industry must also address its own environmental impact. This includes managing energy use and carbon emissions while complying with legal and regulatory standards. Achieving net-zero emissions for blockchain requires clear methodologies for measuring, reporting, and reducing emissions. Importantly, as an infrastructure layer for the carbon market, current blockchain solutions utilized, such as the Polygon blockchain, have conducted initial analyses and see energy footprints equivalent to a few hundred laptops. As these networks help secure tens of billions of dollars of financial activity, they’re already extremely efficient – though more robust real-time data is needed to present to market stakeholders.
Emission Measurement and Reduction Strategies Available on Blockchain
Layer 1 Protocols: Must reduce emissions to limit their downstream impact on applications built on their networks. Transitioning from energy-intensive consensus mechanisms, as seen with Ethereum’s switch to proof-of-stake, is critical.
Granular Measurement: Use location-based emission factors and real estate insights for detailed Scope 2 data.
Tokenized Carbon Credits: Used to offset residual emissions and incentivize sustainable practices.
Current Challenges
It is essential to address the allocation of emissions between blockchain layers and evaluate the role of avoided emissions in net-zero strategies. Additionally, privacy concerns must be carefully explored when utilizing geographical data for emission calculations.
Defining how blockchain activities contribute to broader net-zero transitions is crucial for aligning the technology with global sustainability goals.
Next Steps
Develop standardized metrics and methodologies for emissions reporting.
Align blockchain emissions with established net-zero pathways and regulatory frameworks.
Encourage transparency in emissions reporting and disclose progress on reduction efforts.
Foster collaboration to harmonize sustainability efforts across blockchain networks.
Methodologies and Frameworks
Existing tools include:
Cambridge Center for Alternative Finance: Emissions calculations for Bitcoin and Ethereum.
Climate Action Data Trust: Tackles double-counting in carbon markets and serves as a data repository for credit issuances and retirements across various carbon registries.
Crypto Carbon Ratings Institute: Provides emissions analysis aligned with MiCA standards.
Path Forward
A sector-wide commitment to sustainability involves defining net-zero-aligned activities, addressing greenwashing, and creating granular data collection systems. Blockchain must balance its environmental footprint with its potential to drive sustainability globally.
Framework for a Sustainability-Proof Blockchain Ecosystem
The development of blockchain-enabled sustainability applications requires a robust framework to address historical challenges, such as inaccurate emissions accounting and reporting.
Key Components of the Framework
Transparency:
Blockchain systems should ensure tamper-proof operations while addressing challenges arising from manual data entry or the inappropriate use of AI. To achieve this, it is essential to introduce clear mechanisms for data collection, synthesis, reporting, and dissemination. Additionally, applications should align with global sustainability standards while remaining adaptable to local contexts, particularly in regions with weak communication infrastructure.
Trust:
Blockchain infrastructure should showcase the entire emissions and decarbonization process. Transparent data fosters stakeholder confidence and is reinforced by the establishment of unambiguous metrics that serve as benchmarks for assessing progress towards long-term sustainability goals.
Accountability:
Clear assignment of roles and responsibilities to teams managing emissions tracking and reporting is essential. Streamlined accountability processes help identify and address issues, uncover opportunities for improvement, and effectively incentivize sustainability efforts.
Verifiability:
The integrity of data must be ensured by implementing robust governance measures as well as maintaining data authenticity and provenance. The verification of emissions tracking and decarbonization activities can be facilitated by open-source systems, or those accessible to regulators and qualified assurance providers.
Global South Focus:
Blockchain technology has transformative potential for developing economies, with particularly positive impacts on the Global South. It promotes economic development, sustainable practices, and inclusion in carbon credit markets and decentralized finance.
Addressing challenges such as infrastructure erosion, deforestation, and resource depletion caused by climate change or other adverse events, blockchain applications empower vulnerable populations. These solutions enable equitable access to technology-driven sustainability tools, fostering growth, resilience, and economic inclusion.
By integrating transparency, trust, accountability, and verifiability, the framework supports the creation of a reliable and effective blockchain ecosystem that drives global sustainability progress.
Carbonmark contributes to this progress by delivering critical financing to environmental projects through the voluntary carbon market. Here’s how it works:
Our peer-to-peer (P2P) Marketplace lists only verified projects with real, measured, and documented positive environmental impacts. Featured initiatives include the Reforestation and Restoration of Degraded Mangrove Lands in Myanmar and the AgroEcology Project in Italy, which empowers farmers to adopt regenerative agricultural practices.
Companies can purchase carbon credits from these projects using credit cards, bank transfers, or by integrating carbon offsetting directly into their operations via the Carbonmark API.
We now also offer direct carbon credit issuance onto our blockchain-enabled platform, allowing Carbonmark’s secure infrastructure to serve as a registry for verified carbon projects. We welcome projects developing novel carbon removal methodologies, such as ocean fertilization, enhanced rock weathering, or direct air carbon capture and storage (DACCS). With Carbonmark, these projects can reduce their time to market, and issue credits on a publicly verifiable system for methodologies that may not be supported by traditional registry platforms. Our secure, traceable, and transparent blockchain-based infrastructure enables project developers to manage issued credits, retire them on behalf of unique beneficiaries, and transfer credits to other partners and clients.
About GBBC
Global Blockchain Business Council (GBBC) is the largest leading industry association for the blockchain technology and digital assets community. Launched in Davos in 2017, GBBC is a Swiss-based non-profit, with more than 500 institutional members, and 301 Ambassadors across 117 jurisdictions and disciplines. The organization is dedicated to furthering adoption of blockchain technology by convening regulators, business leaders, and global changemakers to foster collaboration and advance dialogue to create more secure, equitable, and functional societies.
GBBC includes several initiatives: GBBC Financial Services (including Post Trade Distributed Ledger (PTDL) Group), InterWork Alliance (IWA), Global Standards Mapping Initiative (GSMI), International Journal of Blockchain Law (IJBL), BITA Standards Council (BITA), GBBC Labs Inc, GBBC Giving (c3), and recently, U.S. Blockchain Coalition (USBC).
Download the full GSMI 5.0 report here, the executive summary here, and learn more about the GSMI initiative here.
About Carbonmark
Carbonmark is a digital platform that simplifies and democratizes climate action for organizations and environmentally conscious individuals. By leveraging blockchain infrastructure, Carbonmark provides instant access to carbon credits and other environmental assets, ensuring traceability, transparent pricing, efficient settlements, and enhanced market confidence. Carbonmark is committed to scaling environmental markets and supporting climate action globally.
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