- Category: Blockchain Consulting
In the words of Winston Churchill “Responsibility is the Price of Greatness”
Firms and businesses have a similar responsibility, as well as commitment towards the social and economic development of their stakeholders, community and the society at large. In fact, the practice of CSR or Corporate Social Responsibility as a business model has evolved from being a slogan that was considered trendy by some firms to the current era where it has become more of a business requirement rather than just an option.
Today, businesses have realized the significance of having an appropriate CSR strategy in place to ensure better financial positioning, as well as, talent pool. However, not all businesses are transparent about their CSR initiatives, making it difficult to verify claims of social responsibility and sustainability. This aptly reflects the limitations of CSR programs and how their focus lies on improving the current capitalist system rather than transforming it.
Research conducted across the U.S reveal that 95.4 per cent of the raised charitable donations disappear into thin air before reaching their intended beneficiaries. This shocking statistic narrates a woeful tale of lost humanity in this sector and can be attributed to some key issues including lack of financial transparency, dependability, measurement & reporting, governance and more. This calls the urgent need for a robust mechanism that can address various hurdles faced by organizations during the implementation of CSR projects while ensure a more transparent system. And blockchain can exactly be the tool to achieve their objectives.
How Blockchain is Making CSR more Transparent?
The terms “transparency”, “authenticity”, and “security” are closely linked within the scope of Corporate Social Responsibility (CSR). Blockchain – A digital ledger technology can be leveraged to facilitate CSR projects while create a more transparent system out of the current capitalistic environment. Here’s how Blockchain can transform the humanitarian sector:
Provide Greater financial transparency: Given the fact that a major chunk of the charitable donations fails to reach the intended beneficiaries, organizations have failed to garner the much-required trust from the public. Blockchain – A decentralized technology has proved to be a great tool in ensuring greater financial transparency by allowing people to track where every dollar has gone. In fact, the presence of smart contracts will help people to track whether the funds are effectively spent and managed while reduce risk of mismanagement. In other words, people will be reassured that funds have reached the intended recipients.
Enable Transparent Communication: Blockchain allows all the stakeholders involved in CSR projects to access appropriate information at their own will and convenience. Smart contracts element of Blockchain enables transparent communication supported by digital contracts. By providing traceability of records all through the project life-cycle, this technology provides support in disclosures while facilitate access to philanthropists, regulatory bodies and investors.
Ensure Better Stakeholder Management: Stakeholder management is often a major challenge with organizations executing CSR projects. Often data isn’t available easily. Moreover, lack of standardized information, makes it extremely ineffective for analysis and measurement. Data management solutions powered by technologies such as blockchain and Big Data can play a significant role in reducing human errors while contribute to effective management of CSR projects.
Tracking Success of CSR Initiatives: Blockchain offers tracking and measurement solution that can hold the group responsible for their actions. With blockchain, it becomes possible to have an external verification of the internal implementation. This reliable proof or evidence of performance ensures that supervisory leaders remain accountable for everything. Since, programs and progress get verified and documented, CSR initiatives can grow way beyond potential of fake promises and ambiguous numbers.
To facilitate sustainable economic growth and build stronger communities, businesses require effective management of CSR projects. A robust system that can do away with the shortcomings of the conventional system is something what businesses require, to ensure trust and transparency in the system. By leveraging a blockchain based solution, businesses will be able to create a whole new ecosystem of smart humanitarianism. This will ensure that funds and benefits of different CSR activities reach intended recipients along with enhanced visibility for brands.
Sofocle Technologies – One of the leading players in the Blockchain space offers SofoChain Solution that can provide end-to-end traceability to monitor origin of products or record intangibles. This can provide businesses with a mechanism to provide authenticity to their social commitments. To know more about sofoChain solution, drop us an E-mail at [email protected] or Contact Us.