Blockchains as Enablers for Auditing Cooperative Circular Economy Networks

Abstract

Implementing a circular economy business model which is profitable for businesses operating physical assets, while at the same time does not conflict with strategic goals of environmental policies can be a complex and risky undertaking for a single entity, especially if the asset operator is a small-to-medium enterprise (SMEs). To mitigate this, a collaborative circular economy business model is proposed, where the circular economy cycle is materialized by assets transitioning between asset operators on a demanddriven approach. Demand itself is partially based on the asset’s state, which is described by its circular properties (location, condition, availability). The asset state and its transition between operators can be monitored by auditors and governmental regulators to ensure asset integrity and compliance with environmental targets. This common view of asset state between all parties can be enabled by blockchains and smart contracts, which can provide the underlying technology to share data with integrity, while simultaneously offering more efficient interoperability between participants. To demonstrate how this could be achieved, a conceptual asset record access and sharing mechanism is presented which is suitable for regulated environmental jurisdictions.