Open source blockchain protocol for Sustainable bonds will fight impact washing
The new open-source solution enables end-to-end issuance of Sustainability-linked bonds on blockchain solving the impact washing problem and democratizing impact finance. The presentation dedicated to the 5th Anniversary of the Paris agreement was made by Evercity.io at the final annual event of the Climate Chain Coalition. The event united more than 500 participants and speakers from the UN, EU government, World Bank, Yale, and others.
The market of green and sustainability bonds that are designed to finance sustainable projects is expected to reach a new record of 350 bln USD in 2020 despite the crisis. However, there are still challenges preventing the mobilization of finance needed to bridge the annual $ 2,5 trln SDG investment gap — issuance of sustainability bonds is a complicated and costly process while their real-life impact is not accountable. Blockchain technology in a combination with AI, IoT and other monitoring tools may provide a solution, which is confirmed in the latest UN and EU documents.
Evercity platform for impact measurement & investment aims to solve these problems by introducing an open-source, blockchain-based Smart Sustainable Bond (SSB) protocol. The SSB protocol is developed to support the full lifecycle of sustainability linked bonds from structuring to issuance and reporting. Within the ongoing proof of concept, the SSB protocol is used to issue a bond with floating interest rate that is linked to CO2 reductions from a 25 MW power plant of a vertically integrated solar power producer.
The project is being supported by a grant from Web3 Foundation. Web3 Foundation funds research and development teams building the technology stack of the decentralized web. It was established in Zug, Switzerland by Ethereum co-founder and former chief technology officer Dr. Gavin Wood. Evercity has chosen to build their SBB protocol using Web3 tech (Parity Substrate & Polkadot) because it has significantly lower carbon footprint than blockchain 1.0 solutions and provides for interoperability to prevent double accounting of impact results.
In 2021, the SSB protocol will have integration with IoT sensors to collect the impact data and calculate the interest rate automatically. This will significantly increase transparency and lower issuers expenses for such a complicated debt instrument opening it to small-scale projects in developing countries. The SSB protocol and pilot SDG bond issuances planned for 2021 will be presented at the global UN Climate Summit COP26 in Glasgow in partnership with the UNFCCC-backed Climate Chain Coalition.
Evercity is a blockchain, IoT and AI-powered platform for impact measurement, management & investment. We help to attain UN Agenda 2030 by enabling impact funds & banks to increase impact measurement accuracy, efficiency of portfolio management & profitability of impact investments with digital technologies.
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