Blockchain technology and the circular economy: Implications for sustainability and social responsibility

Abstract

Blockchain technology is a revolutionary new protocol for sharing and updating information by linking ledgers or databases in a decentralised peer-to-peer open-access network. Blockchain is designed to ensure the data is stored and updated in a secure tamper-proof and irreversible way. Despite being in its nascent stages the blockchain research is developing rapidly in different fields making it imperative to capture the ethical and sustainability implications of blockchain development and implementation. The circular economy also focuses on enhancing sustainability and social responsibility alongside economic growth. In this article we critically review blockchain technology's current and potential contribution to the circular economy through the lens of sustainability and social responsibility. This paper contributes to the Industry 4.0 literature by identifying collating and organising the disparate research on blockchain with a critical focus on its positive impact and potential repercussions for the ethics agenda. Within this narrative review we argue and highlight the extant and potential alignment of blockchain with circular economy. Our findings show that blockchain technology can contribute to the circular economy by helping to reduce transaction costs enhance performance and communication along the supply chain ensure human rights protection enhance healthcare patient confidentiality and welfare and reduce carbon footprint. We also evaluate the challenges to blockchain implementation for circular economy in terms of trust illegal activities potential for hacking and the need to address these through suitable legislation and policy development. Furthermore we acknowledge the potential upfront costs involved in implementing blockchain technology although we observe that the benefits are likely to exceed the challenges. We conclude this article with recommendations for future research in this field. © 2021 Elsevier B.V. All rights reserved.