Blockchain and the Digitalization of the Global Circular Economy

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By Erika Rosenstein

On December 1, I was in Copenhagen at the Nordic Blockchain Conference, of which Business and Leaders was a media partner.

Many topics were discussed, including the relationship between blockchain and the circular economy. In this regard, I had the pleasure of interviewing Henrik Hvid Jensen, Chief Technology Strategist at DXC Technology – a Fortune 500 global IT services leader.

DXC Technology is known for building “better futures for customers… and the environment”. What is the role of the global circular economy in reaching environmental goals?

We will never reach the global climate and environmental goals, without adopting a global circular economy. The current one-sided focus on Co2, will bring us 50 % of the way. The remaining 50 % comes from adopting a global circular economy.

According to the newly-released Circularity Gap Report 2022, of the 100 billion tonnes of materials which enter the global economy every year, only 8.6% are cycled back into the economy. This leaves a massive circularity gap of over 91% which needs to be addressed with urgent action.

The circular economy offers new principles for doing business in a systematic, resource-preserving way that make good business sense and reduce environmental impacts substantially

Is it possible to build sustainable business models? What is the DXC Technology approach?

The circular economy must be competitive – both during transition as well as when implemented, else it will never be realized

This means that companies must adopt circular economy business models to survive

Circular inputs: In a circular economy, renewable, recycled, or highly recyclable inputs are used in production processes – enabling partial or total elimination of waste and pollution. Waste becomes an asset, not a liability that you pay to dispose of.

Sharing economy concept: Born-circulars maximise how idle assets are used across a community while providing customers with affordable and convenient access to products and services.

Product as a service: The customer purchases a service for a limited time while the provider maintains ownership of the product and remains incentivized for the product’s ongoing maintenance, durability, upgrade, and treatment at the end of its use.

Product use extension: The born-circular designs their products for repairability, upgradability, reusability, ease of disassembly, reconditioning, and recyclability of all components.

Resource recovery: Resource recovery focuses on the end stages of the usage cycle, namely the recovery of embedded materials, energy, and resources from products at the end of use that is no longer functional in their current application.

DXC also sees the opportunities that circular Economy brings in terms of improved offerings towards our customers.

DXC Circularity – We have set a target for zero e-waste to landfill.

DXC’s largest waste and resource stream from our services arise from the procurement, delivery, use and disposal of e-waste used primarily at offsite locations. While DXC is considered a technology service provider, we do acquire hardware and infrastructure products. These are mostly desktops, laptops, printers, monitors and servers.

We apply a circular economy approach to the re-use of equipment, scalability of solutions, flexibility of services and reduction of e-waste.

After our products are refurbished, they are re-used by repackaging and putting them into “customer owned” stock for call-off as required, selling them through popular auction websites or IT brokers, or donating them to charity. With this approach, DXC ensures that our IT equipment is re-used for a second life:

  • 34 percent of all materials are recycled.
  • 66 percent of materials are resold.
  • Less than 1 percent is disposed of.

 

Can blockchain play any role in the digitalization of the global circular economy? 

Collaborative digitization of the Global Circular Economy – Accelerates reaching the global climate and environmental goals

DXC understands that the increased strain on our planet’s resources can be mitigated only by adopting the principles of the circular economy, particularly if these can be aligned with digital opportunities. Digitalization will accelerate the journey to the circular economy and will be fundamental in its realization.

A shared digital infrastructure will exponentially accelerate digitalization, as such infrastructure offers far more value when shared than when used in isolation. DXC has initiated a partner-centric collaborative initiative to realize the shared digital infrastructure to become the digital backbone of the circular economy. For maximum impact, we design it to be politically, commercially and competitively neutral, while preserving the opportunity for innovation to differentiate digital solutions.

DXC is currently focusing on establishing partnerships and collaboration to accelerate the digitalization of the circular economy, and thereby accelerate the achievement of climate goals through economically viable circular business models.

Such a neutral backbone gives many opportunities for the decentralization that blockchain enables, as  blockchain enables

  • Blockchain provides “trust” between and among unknown parties to transact business and exchange information without an intermediary,
  • Collaboration without relying on a trusted intermediary
  • Transaction details are recorded in multiple places at the same time, without a central administrator.
  • The authority, risk and reward of defining and enforcing system rules and record keeping is done by a group of entities of which none has controlling power.
  • The only parties benefitting from a transaction are the producer of the value requested and the consumer that need this value, no middlemen will gain a percentage of the revenue.
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