Blockchain: A Catalyst for Sustainable Marketing and Decentralized Trust

Introduction: The Perceptions and Potential of Blockchain

Blockchain technology is often associated with cryptocurrencies, energy consumption concerns, privacy issues, scalability challenges, and regulatory gaps. However, from a strategic management perspective, CEOs recognize blockchain as a revolutionary trust technology that enhances the efficiency and transparency of asset transfers. This raises the question: Should we pay attention to blockchain? If so, how will it transform the way we perceive trust in the modern world? Blockchain represents more than just another technological innovation; it is an institutional technology that has the potential to reshape organizations and drive them towards decentralized management. By offering a new model of economic coordination and governance, blockchain can support stakeholder interests and foster decentralized sustainable management. Therefore, blockchain holds immense promise for integrating sustainability into a firm's strategy, evolving it from a transient competitive advantage to a sustainable competitive advantage and enabling decentralized sustainable management.

Blockchain: Redefining Trust Mechanisms

Blockchain fundamentally alters the trust mechanisms in exchange processes. It acts as a guardian of trust, redefining the way we trust in buyer-seller relationships compared to traditional exchanges. When conducting business transactions on blockchain-enabled platforms, we place our trust in blockchain itself, relying on mathematical and cryptography-driven governance, network consensus, information transparency, immutable data, and digital escrow for verifying the ownership of valuable goods.

Corporate Sustainability Strategy and Blockchain

Investor demand for sustainability reports as a means of improving transparency regarding a firm's social and environmental impacts has surpassed 50%. However, this demand primarily focuses on obtaining transparency rather than driving sustainability actions or decisions. Sustainability reports serve as legitimate tools for corporations to communicate their sustainability efforts and their impact on the environment, ethics, philanthropy, and the economy. Consequently, sustainability reporting plays a crucial role in supporting investors' risk management objectives.

Unfortunately, fraudulent practices such as greenwashing, bluewashing, social washing, and whitewashing undermine the integrity of sustainability strategies. Blockchain can partially address this challenge by providing authentication for corporate sustainability strategies. However, blockchain alone cannot build trust mechanisms for the environment, infrastructure, and behavioral layers of the economy. As blockchain infrastructures are developed by humans, there is potential for bad actors to exploit the technology for fraudulent activities and profit maximization. Therefore, decentralized trust in sustainability strategy should extend beyond the trust characteristics of blockchain-enabled exchanges to encompass impersonal trust in social movement organizations. These organizations, such as Greenpeace, Sierra Club, and Nature Conservancy, play a critical role in governing ethical marketing efforts, fostering trust, promoting cooperation, and preventing collusion and capture.

Building Decentralized Trust: Persistent Digital Relationships

To establish universal trust in corporate sustainability strategies, it is essential to build trust in persistent, non-transferable, and revocable digital relationships. Although the concept of a corporation dates back to the 17th century, each individual currently relies on different subjective factors to determine trust in a corporation's sustainability performance. Some individuals rely on online information, sustainability reports, or personal observations. To address this challenge, each corporation could possess an open-access account called TrustWallet, representing commitments and credentials that establish the provenance and reputation of its sustainability strategy. TrustWallet would accumulate trust in a decentralized and public network.

Decentralized Trust in Action: Sustainable Tokens and TrustWallet

The true potential of decentralized trust in sustainability strategy emerges when sustainable tokens (non-transferable non-fungible tokens) held by one TrustWallet can be issued or attested by other corporations and social movement organizations, including NGOs, intergovernmental organizations, and environmental scientists. For example, a social movement organization like Extinction Rebellion in Helsinki could issue sustainable tokens to an eco-friendly contract manufacturer, which, in turn, could issue sustainable tokens to various brands holding outsourced contracts. TrustWallet becomes a natural means for corporations to stake their reputation on sustainability strategy. When claiming a sustainable product, a corporation could authenticate its sustainability through its TrustWallet. The more sustainable tokens a corporation's and brand's cryptographic TrustWallet carries, the easier it becomes for business customers and consumers to identify the TrustWallet as belonging to that corporation or brand, thereby verifying the legitimacy of sustainable tokens. Through blockchain-enabled exchanges, TrustWallet establishes an auditable on-chain reputation for the provenance of sustainable actions and behaviors.

Conclusion: Decentralized Trust for Sustainable Marketing

The concept of decentralized trust in corporate sustainability strategy involves socially co-determined trust, where social movement organizations, environmentalists, corporations, and communities come together to create decentralized and persistent networks for corporate sustainability actions and behaviors. By integrating blockchain technology and decentralized trust mechanisms, organizations can enhance their sustainability efforts, improve transparency, and build trust with stakeholders. The future holds significant research opportunities to advance sustainability in the pseudonymous economy, decentralized identity, and decentralized society.